The role of cognitive and personality characteristics in timely microcredit repayment: Evidence from a survey conducted by Provident, Mexico
Sustainability of microfinance institutions depends, among other factors, on having appropriate repayment levels. This article's contribution to the existing literature is the analysis of the role of a personality trait named "grit" in individual microcredit repayment decisions, a...
| Main Authors: | , , , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Universidad Autónoma de Nuevo León, Facultad de Economía
2020-05-01
|
| Series: | Ensayos Revista de Economía |
| Subjects: | |
| Online Access: | https://ensayos.uanl.mx/index.php/ensayos/article/view/147 |
| _version_ | 1818029030455115776 |
|---|---|
| author | Sonia Di Giannatale Daniel Ventosa-Santaulària Maria José Roa Alexander Elbittar Darío Trujano |
| author_facet | Sonia Di Giannatale Daniel Ventosa-Santaulària Maria José Roa Alexander Elbittar Darío Trujano |
| author_sort | Sonia Di Giannatale |
| collection | DOAJ |
| description |
Sustainability of microfinance institutions depends, among other factors, on having appropriate repayment levels. This article's contribution to the existing literature is the analysis of the role of a personality trait named "grit" in individual microcredit repayment decisions, alongside cognitive characteristics and time and risk preferences. This study is based on a survey of a sample of clients at 'Provident México', a formal microfinance institution that provides personal loans in vulnerable communities in Puebla, Mexico. We find evidence that, generally, older individuals possessing higher levels of grit and a tendency toward short term present bias are more likely to show no delays in loan repayments. Cognitive characteristics are inversely related to paying microcredits on time. Refinancing incentives does not play a key role in timely microcredit repayment, a result that is contrary to related literature but consistent with our finding that individuals in this sample that do not have delays in repayments are characterized by showing a short term present bias.
El papel de las características cognitivas y de personalidad en el pago oportuno de microcréditos: Evidencia de una encuesta realizada por Provident, México.
RESUMEN
La sostenibilidad de las instituciones microfinancieras depende, entre otros factores, de tener niveles apropiados de repago. Este trabajo contribuye a la literatura existente al analizar el papel de un rasgo de personalidad denominado "diligencia" ("grit" en inglés) en las decisiones de repago de microcréditos individuales, junto con las habilidades cognitivas y las preferencias de tiempo y riesgo. Este estudio se basa en una encuesta aplicada a una muestra de clientes en 'Provident México', una institución formal de microfinanzas que ofrece préstamos personales en comunidades vulnerables en Puebla, México. Los resultados obtenidos indican que, en general, las personas mayores que poseen niveles más altos de diligencia, y que tienden a tener un sesgo por el corto plazo, tienen más probabilidades de no mostrar retrasos en el repago de los préstamos. Las características cognitivas están inversamente relacionadas con el pago de las deudas a tiempo. Los incentivos de refinanciamiento no desempeñan un papel clave en el repago a tiempo del microcrédito, contrario a la literatura. Sin embargo, en nuestra muestra, los resultados concuerdan con el sesgo por el corto plazo de los individuos que no tienen retrasos en sus pagos.
|
| first_indexed | 2024-12-10T05:13:12Z |
| format | Article |
| id | doaj.art-e619b7c14eb04a81b9df768335a5e83c |
| institution | Directory Open Access Journal |
| issn | 1870-221X 2448-8402 |
| language | English |
| last_indexed | 2024-12-10T05:13:12Z |
| publishDate | 2020-05-01 |
| publisher | Universidad Autónoma de Nuevo León, Facultad de Economía |
| record_format | Article |
| series | Ensayos Revista de Economía |
| spelling | doaj.art-e619b7c14eb04a81b9df768335a5e83c2022-12-22T02:01:02ZengUniversidad Autónoma de Nuevo León, Facultad de EconomíaEnsayos Revista de Economía1870-221X2448-84022020-05-0139110.29105/ensayos39.1-1112The role of cognitive and personality characteristics in timely microcredit repayment: Evidence from a survey conducted by Provident, MexicoSonia Di Giannatale0Daniel Ventosa-Santaulària1Maria José Roa2Alexander Elbittar3Darío Trujano4CIDECIDECEMLACIDEIFT Sustainability of microfinance institutions depends, among other factors, on having appropriate repayment levels. This article's contribution to the existing literature is the analysis of the role of a personality trait named "grit" in individual microcredit repayment decisions, alongside cognitive characteristics and time and risk preferences. This study is based on a survey of a sample of clients at 'Provident México', a formal microfinance institution that provides personal loans in vulnerable communities in Puebla, Mexico. We find evidence that, generally, older individuals possessing higher levels of grit and a tendency toward short term present bias are more likely to show no delays in loan repayments. Cognitive characteristics are inversely related to paying microcredits on time. Refinancing incentives does not play a key role in timely microcredit repayment, a result that is contrary to related literature but consistent with our finding that individuals in this sample that do not have delays in repayments are characterized by showing a short term present bias. El papel de las características cognitivas y de personalidad en el pago oportuno de microcréditos: Evidencia de una encuesta realizada por Provident, México. RESUMEN La sostenibilidad de las instituciones microfinancieras depende, entre otros factores, de tener niveles apropiados de repago. Este trabajo contribuye a la literatura existente al analizar el papel de un rasgo de personalidad denominado "diligencia" ("grit" en inglés) en las decisiones de repago de microcréditos individuales, junto con las habilidades cognitivas y las preferencias de tiempo y riesgo. Este estudio se basa en una encuesta aplicada a una muestra de clientes en 'Provident México', una institución formal de microfinanzas que ofrece préstamos personales en comunidades vulnerables en Puebla, México. Los resultados obtenidos indican que, en general, las personas mayores que poseen niveles más altos de diligencia, y que tienden a tener un sesgo por el corto plazo, tienen más probabilidades de no mostrar retrasos en el repago de los préstamos. Las características cognitivas están inversamente relacionadas con el pago de las deudas a tiempo. Los incentivos de refinanciamiento no desempeñan un papel clave en el repago a tiempo del microcrédito, contrario a la literatura. Sin embargo, en nuestra muestra, los resultados concuerdan con el sesgo por el corto plazo de los individuos que no tienen retrasos en sus pagos. https://ensayos.uanl.mx/index.php/ensayos/article/view/147credit repaymentpersonality traitsgritcognitive characteristicstime and risk preferences |
| spellingShingle | Sonia Di Giannatale Daniel Ventosa-Santaulària Maria José Roa Alexander Elbittar Darío Trujano The role of cognitive and personality characteristics in timely microcredit repayment: Evidence from a survey conducted by Provident, Mexico Ensayos Revista de Economía credit repayment personality traits grit cognitive characteristics time and risk preferences |
| title | The role of cognitive and personality characteristics in timely microcredit repayment: Evidence from a survey conducted by Provident, Mexico |
| title_full | The role of cognitive and personality characteristics in timely microcredit repayment: Evidence from a survey conducted by Provident, Mexico |
| title_fullStr | The role of cognitive and personality characteristics in timely microcredit repayment: Evidence from a survey conducted by Provident, Mexico |
| title_full_unstemmed | The role of cognitive and personality characteristics in timely microcredit repayment: Evidence from a survey conducted by Provident, Mexico |
| title_short | The role of cognitive and personality characteristics in timely microcredit repayment: Evidence from a survey conducted by Provident, Mexico |
| title_sort | role of cognitive and personality characteristics in timely microcredit repayment evidence from a survey conducted by provident mexico |
| topic | credit repayment personality traits grit cognitive characteristics time and risk preferences |
| url | https://ensayos.uanl.mx/index.php/ensayos/article/view/147 |
| work_keys_str_mv | AT soniadigiannatale theroleofcognitiveandpersonalitycharacteristicsintimelymicrocreditrepaymentevidencefromasurveyconductedbyprovidentmexico AT danielventosasantaularia theroleofcognitiveandpersonalitycharacteristicsintimelymicrocreditrepaymentevidencefromasurveyconductedbyprovidentmexico AT mariajoseroa theroleofcognitiveandpersonalitycharacteristicsintimelymicrocreditrepaymentevidencefromasurveyconductedbyprovidentmexico AT alexanderelbittar theroleofcognitiveandpersonalitycharacteristicsintimelymicrocreditrepaymentevidencefromasurveyconductedbyprovidentmexico AT dariotrujano theroleofcognitiveandpersonalitycharacteristicsintimelymicrocreditrepaymentevidencefromasurveyconductedbyprovidentmexico AT soniadigiannatale roleofcognitiveandpersonalitycharacteristicsintimelymicrocreditrepaymentevidencefromasurveyconductedbyprovidentmexico AT danielventosasantaularia roleofcognitiveandpersonalitycharacteristicsintimelymicrocreditrepaymentevidencefromasurveyconductedbyprovidentmexico AT mariajoseroa roleofcognitiveandpersonalitycharacteristicsintimelymicrocreditrepaymentevidencefromasurveyconductedbyprovidentmexico AT alexanderelbittar roleofcognitiveandpersonalitycharacteristicsintimelymicrocreditrepaymentevidencefromasurveyconductedbyprovidentmexico AT dariotrujano roleofcognitiveandpersonalitycharacteristicsintimelymicrocreditrepaymentevidencefromasurveyconductedbyprovidentmexico |