Various Aspects of Poverty and Financial Management among the Haredi Public
Nitsa (Kaliner) Kasir
According to the official index compiled by the Israeli National Insurance Institute, the poverty rate in Haredi society is high and stands at over fifty percent. Most Haredim, even those who are not defined as poor, belong to a low economic cluster.
People who live in poverty are the population most likely to be in debt. Even so, despite the high poverty rate in Haredi society, the ratio of Haredim who are in debt or who use their savings to cover their monthly expenses is lower than expected, considering their income levels. The ratio of savers is also higher than anticipated. In addition, whereas in general society there is a high negative correlation between socioeconomic status and the ratio of debtors and those whose debts are being handled by the Enforcement and Collection Authority, in Haredi society this correlation does not exist. Furthermore, in Haredi communities, which belong to the lowest socioeconomic cluster, the ratio of persons aged 20 and over who have files opened against them at the Enforcement and Collection Authority is particularly low.
For the most part, the poverty in Haredi society stems from a conscious choice of lifestyle (studying Torah rather than going to work), which, although it results in a low income level and poverty, there is a higher sense of personal purpose due to the different societal priorities and unique goals. Since this poverty is not the result of failures, it is not surprising that most Haredim practice responsible financial management and adjust their expenses to their income. This management is supported by mechanisms provided by the Haredi community, such as volume purchases that take advantage of the community purchasing power and lower the retail profit margin on basic consumer products. In addition, the community structure of Haredi society supports and assists the needy – via donations and volunteer help. The ratio of debtors among the Haredi public is therefore lower than expected, considering their income levels. Most people who need loans can obtain them interest free and with manageable repayment schedules.
Since most of the loans are given within Haredi society itself, the repayment rate is also particularly high, such that Haredim have less need for the services of the Enforcement and Collection Authority for recouping the loans. In addition, Haredi society conducts itself as a closed society with its own rules, and tends less to turn to the authorities for settling internal disputes, and this includes the enforcement and collection authorities.
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