Feasibility of Consumer Credit Based on Income Levels of People in Aksum Town

Any good facility gives the bad experience if we utilize more than sufficient. But people never enjoyed the sweetness of consumer credit until now in some countries. The use of consumer credit is related to the eagerness of consumers to sacrifice future consumption in order to obtain greater satisfaction from current consumption. Low-income people wants to live in a society lavish with houses, cars, bikes, furniture and stuff lining the shelves in retail malls. The problem is money. Most low-wage workers and employees do not have enough to buy what they need, much less what their heart desires. The facility of Consumer credit brought glaring change in the people middle class life. All over the world, People slowly adopted the sweetness of consumer credit facility. Later on consumer credit became driving force behind the economies of most of the leading industrial countries. In 2007, the total debt owed by consumers only in the USA was $13 trillion ($13, 009, 000, 000, 000), of which $9.8 trillion was on mortgages and $2.4 trillion on consumer credit (personal bank loans, credit cards, overdrafts, and motor and retail loans). Consumer credit reaches to dominate the financial conditions of the nations. But still some under developed and developing countries are hesitating to introduce consumer credit through financial institutions. May be, Lack of awareness, Lack of strong legal frame work, week industrial policies, poor financial rotations etc., are causes behind this. Ethiopia is also not exceptional from this case. It is fastest growing country in African continent, people have good economic growth since 10 years. Still commercial banks and other financial institutions are not encouraging consumer credit in the nation. In this paper, the basic objective is identifying the healthy environment to introduce consumer credit in Axum town by the income levels of people.

And we collected primary data source from 160 respondents by conducting oral, face to face interviews and group discussions. Secondary data information collected form books, journals and internet etc.