Granting and Managing Loans for Micro-Entrepreneurs: New Developments and Practical Experiences
European Journal of Operational Research - Cristián Bravo, Sebastián Maldonado y Richard Weber

(Research In Press, Accepted Manuscript).

 

Abstract

We present a methodology to grant and follow-up credits for micro-entre-preneurs. This segment of grantees is very relevant for many economies, especially in developing countries, but shows a behavior different to that of classical consumers where established credit scoring systems exist. Parts of our methodology follow a proven procedure we have applied successfully in several credit scoring projects. Other parts, such as cut-off point construction and model follow-up, however, had to be developed and constitute original contributions of the present paper. The results from two credit scoring projects we developed in Chile, one for a private bank and one for a governmental credit granting institution, provide interesting insights into micro-entrepreneurs’ repayment behavior which could also be interesting for the respective segment in countries with similar characteristics.

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