The proposed theoretical framework of consumer financial market efficiency and the exploration of key consumer credit behaviour factors in a developing economy

The literature identifies a myriad of environmental factors that influence the optimality of consumer financial decisions/choices. Understanding the influence that these factors play in different financial environments and their impact on market efficiency remains an empirical question. First, the paper proposes a consolidated approach that considers relationships and interrelations among various market factors as a measure towards the development of a higher order theory of the efficiency of consumer financial markets. Second, the paper takes the first step towards exploring the mechanics of consumer financial markets in the context of a developing African economy by investigating factors that determine consumer credit behaviour. In particular, the paper explores the key factors related to consumer credit decisions by Botswana consumers using exploratory factor analysis. The implications of the research findings to policy point to a need for a paradigm shift in regulation through 'truth-in-lending' laws for the developing economy.