Consumer credit default in Bolivian Financial Institutions has become a frequent problem, and it directly influences the quality of credit portfolios and the sustainability of financial firms. While in many countries, researchers found clear evidence of the individual-level determinants of credit default, in Bolivia such information does not exist. Thus, based on financial consumer surveys in Bolivia, this article explores the mechanism linking sociodemographic characteristics, institutional characteristics, psychological characteristics, and social norms. Using consumer survey data and logistic regression, the results suggest that consumer credit default is determined by age, the number of dependents, bad economic conditions, financial literacy, immorality, and uncertainty avoidance. Finally, we discuss some strategies to improve consumer credit default risk tools.
Analysis of the Determinants of Consumer Credit Default Risk in Bolivian Financial Institutions
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