Does leverage predict delinquency in consumer lending? Evidence from Peru

Arbeitspapier

This paper examines to what extent household leverage - as measured by the debt-to-income (DTI) ratio - predicts delinquency in Peru's consumer credit market. A model is estimated to assess the relation between delinquency and the DTI ratio. The initial and current DTI ratios are assessed as delinquency predictors. The results confirm that the current DTI ratio is effective for predicting delinquency. This evidence supports its use in financial regulation to improve household credit risk assessment and control.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Graduate Institute of International and Development Studies Working Paper ; No. HEIDWP05-2020

Classification and Topics

• Classification: Wirtschaft ; Financial Institutions and Services: General ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages ; Consumer Economics: Empirical Analysis
• Subject: Household finance ; credit risk ; consumer delinquency

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Cuba, Walter
• Event: Veröffentlichung
• (who): Graduate Institute of International and Development Studies
• (where): Geneva
• (when): 2020

Further information

• Handle: http://hdl.handle.net/10419/230330
• Last update: 10.03.2025, 11:42 AM CET