The role of cognitive and personality characteristics in timely microcredit repayment: Evidence from a survey conducted by Provident, Mexico

Sonia Di Giannatale, Daniel Ventosa-Santaulària, Maria José Roa, Alexander Elbittar, Darío Trujano




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.



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.


credit repayment; personality traits; grit; cognitive characteristics; time and risk preferences


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