Effect of Psychological Factors on Credit Risk: A Case Study of the Microlending Service in Mongolia
| Autor: | Enkhjargalan Gantumur, Mandakhbayar Nemekh, Erdenebaatar Dashdondog, Ganzul Bazarragchaa, Togtuunaa Ider, Mandukhai Ganbat, Khosgarig Altantsatsralt, Oyun-Erdene Namsrai, Lkhamsuren Dashkhorol, Erdenebileg Batbaatar |
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| Rok vydání: | 2021 |
| Předmět: |
Psychometrics
credit risk media_common.quotation_subject lcsh:BF1-990 Development psychological factors Logistic regression Article indebtedness borrower Behavioral Neuroscience Cronbach's alpha Debt 0502 economics and business Genetics the psychology of personality 050207 economics psychometric analysis health care economics and organizations General Psychology Ecology Evolution Behavior and Systematics media_common Actuarial science economic factors 05 social sciences determinants Conscientiousness loan repayment Confirmatory factor analysis lcsh:Psychology behavior economics personality trait Default the responsible borrower Psychology 050203 business & management Credit risk |
| Zdroj: | Behavioral Sciences, Vol 11, Iss 47, p 47 (2021) Behavioral Sciences Volume 11 Issue 4 |
| ISSN: | 2076-328X |
| DOI: | 10.3390/bs11040047 |
| Popis: | This paper determined the predefining factors of loan repayment behavior based on psychological and behavioral economics theories. The purpose of this research is to identify whether an individual’s credit risk can be predicted based on psychometric tests measuring areas of psychological factors such as effective economic decision-making, self-control, conscientiousness, selflessness and a giving attitude, neuroticism, and attitude toward money. In addition, we compared the psychological indicators to the financial indicators, and different age and gender groups, to assess whether the former can predict loan default prospects. This research covered the psychometric test results, financial information, and loan default information of 1118 borrowers from loan-issuing applications on mobile phones. We validated the questionnaire using confirmatory factor analysis (CFA) and achieved an overall Cronbach’s alpha reliability coefficient greater than 0.90 (α = 0.937). We applied the empirical data to construct prediction models using logistic regression. Logistic regression was employed to estimate the parameters of a logistic model. The outcome indicates that positive results from the psychometric testing of effective financial decision-making, self-control, conscientiousness, selflessness and a giving attitude, and attitude toward money enable individuals’ debt access possibilities. On the other hand, one of the variables—neuroticism—was determined to be insignificant. Finally, the model only used psychological variables proven to have significant default predictability, and psychological variables and psychometric credit scoring offer the best prediction capacities. |
| Databáze: | OpenAIRE |
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