Modeling Money Attitudes to Predict Loan Default

The IUP Journal of Bank Management, Vol. 9, Nos. 1 & 2, pp. 12-20, February & May 2010

Posted: 17 May 2010

See all articles by Sunil Bhardwaj

Sunil Bhardwaj

The Icfai Business School

Kaushik Bhattacharjee

Institute of Chartered Financial Analysts of India (ICFAI) - The Icfai Institute for Management Teachers (IIMT)

Date Written: May 14, 2010

Abstract

The primary objective of the study is to classify the defaulters and non-defaulters of auto loans based on their specific personality traits, viz., ‘money attitude’ and ‘income dimensions’. However, the aim is not only to classify, but also to understand the root of the defaulter behavior. Therefore, the study probes deeper into the attitude and perception variables of the consumers who avail loan facilities. The study, based on the customers of an MNC bank1, using a survey in two metropolitan cities in India, suggests that the constructs of personality traits, such as money attitudes, power-prestige and anxiety, actually enhance the intention and actual usage of loan facility, and that the same can be the predictors of default behavior at a significant level. The results and the model developed can be used as the basis for decision making while processing loans.

Suggested Citation

Bhardwaj, Sunil and Bhattacharjee, Kaushik, Modeling Money Attitudes to Predict Loan Default (May 14, 2010). The IUP Journal of Bank Management, Vol. 9, Nos. 1 & 2, pp. 12-20, February & May 2010. Available at SSRN: https://ssrn.com/abstract=1607643

Sunil Bhardwaj (Contact Author)

The Icfai Business School ( email )

Donthanapally Shankarapalli Road
RAJAWALA ROAD
Hyderabad, RI Andhra Pradesh 501203
India

Kaushik Bhattacharjee

Institute of Chartered Financial Analysts of India (ICFAI) - The Icfai Institute for Management Teachers (IIMT) ( email )

3rd Floor, Astral Heights
Road No. 1, Banjara Hills
Hyderabad, 500 034
India

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