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Beyond Income: The Complexities of Credit Risk in Developing Countries

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Listed:
  • Nartey Menzo, Benjamin Prince
  • Mogre, Diana
  • Asuamah Yeboah, Samuel

Abstract

This paper investigates the complex interplay of factors contributing to credit risk in developing countries. Focusing on borrower characteristics, we examine the interconnected roles of income levels, employment stability, and credit history. The analysis reveals how lower income, volatile employment, and limited credit access can significantly amplify credit risk. The paper explores the challenges posed by these factors in developing economies and proposes strategies to mitigate credit risk and foster financial inclusion. By understanding these dynamics, policymakers and financial institutions can implement targeted interventions to enhance economic resilience and promote sustainable development.

Suggested Citation

  • Nartey Menzo, Benjamin Prince & Mogre, Diana & Asuamah Yeboah, Samuel, 2024. "Beyond Income: The Complexities of Credit Risk in Developing Countries," MPRA Paper 122364, University Library of Munich, Germany, revised 20 Sep 2024.
    • Handle: RePEc:pra:mprapa:122364
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    More about this item

    Keywords

    Credit risk; Developing countries; Income levels; Employment stability; Credit history; Financial inclusion; Economic resilience; Policy interventions Credit risk; Developing countries; Income levels; Employment stability; Credit history; Financial inclusion; Economic resilience; Policy interventions Credit risk; Developing countries; Income levels; Employment stability; Credit history; Financial inclusion; Economic resilience; Policy interventions;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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