Can a mobile credit-scoring model provide better accessibility to South African citizens requiring micro-lending

Hendricks, Matthew Kenneth; Budree, Adheesh

doi:10.1504/ijef.2019.099001

Cited by 4 publications

(2 citation statements)

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“…The accessibility created by mobile technology is said to improve market efficiency both in trade and financial (Akar & Mbiti, 2010). Mobile money score can help increase accessibility of finance to underprivileged micro business borrowers (Hendricks & Budree, 2019). Mobile credit has opened remote villages and far flung entrepreneurs to accessing finance for the businesses which enables equitable growth in a country.…”

Section: 2mentioning

confidence: 99%

Mobile Credit and Performance: Experience and Lessons from Micro and Small Enterprises in Kenya

Alumasa¹,

Muathe²

2021

Journal of Applied Finance &Amp; Banking

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Micro and small enterprises sector is considered as very important in growing the economies of many countries, especially the developing nations. In Kenya, the Micro and small enterprises sector is an important contributor to the growth of the economy through facilitation of trade and creation of employment. While various interventions have been made to grow this sector, the enterprises have continued to perform poorly, struggle to survive and a large number die off. This study sought to investigate the effect of mobile credit on performance of micro and small enterprises. The study was to determine the effect of accessibility, the effect of the cost, the effect of mobile credit loan amount and the effect of regulation on performance of micro and small enterprises. The study was anchored on various theories of Resource based view, Dynamic capabilities, Diffusion of technology, Credit rationing, and the asymmetry of information. The study found out that the accessibility of mobile credit, the Loan amount and the regulation have significant positive effect on performance, while the cost of mobile credit has a significate negative effect on the performance of micro and small enterprises. The study concluded that mobile credit is an essential source of credit to micro and small enterprises. Keywords: Mobile credit, Micro and small enterprises, Performance, Resource based view, Dynamic capabilities theory.

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Section: 2mentioning

confidence: 99%

Mobile Credit and Performance: Experience and Lessons from Micro and Small Enterprises in Kenya

Alumasa¹,

Muathe²

2021

Journal of Applied Finance &Amp; Banking

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“…The lending industry has significantly transformed by adopting certain “alternative variables” in the credit scoring models. Such alternative variables include social media data of the borrowers (Hendricks and Budree, 2019; De Cnudde et al , 2019), utility data (Djeundje et al , 2021), mobile phone data (Agarwal et al , 2020), psychological data (Azma et al , 2019) and so on. The idea behind using such non-traditional data sets is to serve those unbanked populations who face financial constraints due to the unavailability of financial data.…”

Section: Introductionmentioning

confidence: 99%

Understanding the impact of borrowers' behavioural and psychological traits on credit default: review and conceptual model

Goel

Rastogi

2021

RBF

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PurposeThe purpose of the study is to identify certain behavioural and psychological traits of the borrowers which have the tendency to predict the credit risk of the borrowers. And the second objective is to draw a conceptual model that reveals the impact of those traits on credit default.Design/methodology/approachThe study has adopted a systematic Literature Review approach to identify those behavioural and psychological traits of borrowers that reflect on the tendency to predict the credit default of borrowers.FindingsThe findings of this study have revealed that there are some non-financial factors, which can be looked into while granting a loan to a borrower. The identified factors can be used to develop a subjective credit scoring model that can quantify and verify the soft information (character and reliability) of debtors. Further, a behavioural credit scoring model will help in easing the assessment of those borrowers, who do not have an appropriate credit history and reliable financial statements.Practical implicationsThe proposed model would help banks and financial institutions to evaluate those borrowers who lack substantial financial information. Further, a subjective credit scoring model would help to evaluate the credit worthiness of such borrowers who do not have any credit history. The model would also reduce the biasness of subjective scoring and would reduce the financial constraints of borrowers.Originality/valueBy reviewing the literature, it has been observed that there are very few studies that have exclusively considered the behavioural and psychological factors in credit scoring. Several studies have linked the psychological constructs with debts, but very few researchers have considered it while constructing a behavioural scoring model. Thus, it can be inferred that this area of behavioural finance is still unexplored and needs attention of researchers worldwide. In addition, most of the studies are carried out in European, African and American regions but are almost non-existent in the Asian markets.

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Responsible access to credit for sole-traders and micro-organizations under unstable market conditions with psychometrics

van Thiel,

Elliott,

Goedee

et al. 2024

The European Journal of Finance

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Can a mobile credit-scoring model provide better accessibility to South African citizens requiring micro-lending

Cited by 4 publications

References 0 publications

Mobile Credit and Performance: Experience and Lessons from Micro and Small Enterprises in Kenya

Mobile Credit and Performance: Experience and Lessons from Micro and Small Enterprises in Kenya

Understanding the impact of borrowers' behavioural and psychological traits on credit default: review and conceptual model

Responsible access to credit for sole-traders and micro-organizations under unstable market conditions with psychometrics

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