Journal of Microfinance / ESR Review


Can scoring models help microlenders in poor countries as much as they have helped credit-card lenders in rich countries? This paper presents a scorecard that predicts the probability that loans from a microlender in Bolivia will have arrears of 15 days or more. Although arrears in microfinance depend on many factors difficult to include in scorecards, the paper shows that inexpensive, simple-to-collect data does have some predictive power. In micro-finance, scoring will not replace loan officers, but it can flag high-risk cases and act as a cross-check on loan officers' judgment.


Mark Schreiner is a Senior Scholar in the Center for Social Development at Washington University in Saint Louis and a consultant with Microfinance Risk Management. He works to help the poor build assets via improved financial services. Website: http://www.microfinance.com



Journal Title

Journal of Microfinance

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