What Triggers Loan Repayment Failure of Consumer Loans – Evidence from Bosnia and Herzegovina

Sanela Pasic () and Adisa Omerbegovic Arapovic ()
Additional contact information
Sanela Pasic: Sarajevo School of Science and Technology, Bosnia and Herzegovina
Adisa Omerbegovic Arapovic: Sarajevo School of Science and Technology, Bosnia and Herzegovina

Eurasian Journal of Business and Management, 2016, vol. 4, issue 1, 11-22

Abstract: This research explores most dominant lending product to population of Bosnia and Herzegovina, a consumer loan, with aim to answer the question of what factors trigger loan repayment failure. It explores relation of borrower characteristics such as gender, age, level of indebtness to likeliness of loan repayment by use of probit on banking data sample representing 39% of the market share in the country. It identifies factors which lead to loan repayment failure and also provides exact empirical model for default prediction at loan approval stage. Main audience of this research should be banks, which could use the finding of the study to adjust their credit policies and risk appetite to ensure that lending losses from this strongly present product are minimized, thus leading to stable and financially sound banking sector.

Keywords: Consumer Loans; Default Prediction; Probit Regression; Credit Risk (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://eurasianpublications.com/wp-content/upload ... ol.4-No.1-2016-2.pdf (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ejn:ejbmjr:v:4:y:2016:i:1:p:11-22

Access Statistics for this article

Eurasian Journal of Business and Management is currently edited by Nidžara Osmanagić-Bedenik

More articles in Eurasian Journal of Business and Management from Eurasian Publications
Bibliographic data for series maintained by Esra Barakli ().