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Formal and Informal Household Credit in Colombia

In: Financial Decisions of Households and Financial Inclusion: Evidence for Latin America and the Caribbean

Author

Listed:
  • Ana María Iregui-Bohórquez

    (Banco de la República de Colombia)

  • Ligia Alba Melo-Becerra

    (Banco de la República de Colombia)

  • María Teresa Ramírez-Giraldo

    (Banco de la República de Colombia)

  • Ana María Tribín-Uribe

    (Banco de la República de Colombia)

Abstract

This paper provides evidence on the determinants of household credit, formal and informal, in both urban and rural areas in Colombia. We also study the factors that affect the likelihood that a household is in arrears. Results show that the probability that a household has credit is positively related to marital status (married), education, income, household size, home ownership, and labor market participation. Estimates indicate that income and education are positively correlated with the probability of having a formal loan, and negatively related to the likelihood of having informal credit. Finally, household income, credit usage, and unexpected events increase the probability of credit default.

Suggested Citation

  • Ana María Iregui-Bohórquez & Ligia Alba Melo-Becerra & María Teresa Ramírez-Giraldo & Ana María Tribín-Uribe, 2018. "Formal and Informal Household Credit in Colombia," Investigación Conjunta-Joint Research, in: María José Roa García & Diana Mejía (ed.), Financial Decisions of Households and Financial Inclusion: Evidence for Latin America and the Caribbean, edition 1, volume 1, chapter 5, pages 125-156, Centro de Estudios Monetarios Latinoamericanos, CEMLA.
    • Handle: RePEc:cml:incocp:7en-05
    Note: Joint Research Program of the Central Bank Researchers Network
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    References listed on IDEAS

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    More about this item

    Keywords

    household debt; formal credit; informal credit; credit default; Colombia.;
    All these keywords.

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • R22 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Other Demand

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