A Scoring Model of the Risk of Costly Arrears at a Microfinance Lender in Bolivia

Development and Comp Systems from EconWPA

Abstract: Can scoring models help microfinance lenders in poor countries as much as they have helped credit-card lenders in rich countries? I model the probability that loans from a microlender in Bolivia had arrears of 15 days or more. Although arrears in microfinance depend on many factors difficult to include in statistical models, I find that inexpensive data does indeed have some predictive power. In microfinance, computer models will not replace loan officers, but they can flag the highest risks and act as a cross-check on human judgement.

Keywords: Scoring; risk management; credit risk; Bolivia; microfinance (search for similar items in EconPapers)
JEL-codes: O57 O54 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-lam and nep-mfd
Date: 2001-09-05
Note: Type of Document - Adobe Acrobat 3.0; prepared on Windows 98; to print on Adobe Acrobat 3.0; pages: ; figures: Included in pdf file
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