[jessriedel]

Your distinction between consumer credit and business credit is not as clean as you make it seem. Your example of consumer credit (toasters) is most clearly exemplified in a home loan. In this case, the point of the loan is to allow someone to own an item and draw utility from it over a long period of time; they could not afford the purchase at the beginning of the time period, but their income over that period can cover the cost. To a good approximation, the income of that person would be independent of whether they were given the loan (i.e. if they had to rent a smaller place).

But there are lots of personal purchases financed by consumer loans that increase one's income just like a business loan. The most notable is a student loan, but especially in poor countries (and poor people in rich countries) there are lots of other examples: Buying a vehicle to allow one to work at a higher paying job outside of walking distance, buying a tin roof that doesn't need to be replaced every year,

http://www.givedirectly.org/blog_post.php?id=284534178491025...

buying basic health care allowing one to stay healthy to work, etc.