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A Social Approach to Microfinance Credit Scoring


  • Carlos Serrano-Cinca
  • Begoña Gutiérrez-Nieto
  • Nydia M. Reyes


Microfinance Institutions (MFIs) provide loans to low income individuals. The credit scoring systems of MFIs, if they exist, are strictly financial. Although many MFIs consider the social impact of their loans, they do not incorporate formal systems to estimate this social impact. This paper proposes that their creditworthiness evaluations should be coherent with their social mission and should, accordingly, estimate the social impact of microcredit. Thus, a decision support system to facilitate microcredit granting is proposed, and multicriteria evaluation is used to translate MFI’s social mission into numbers. The assessment of social impact is performed by calculating the Social Net Present Value (SNPV). The system captures credit officers’ experience and addresses incomplete and intangible information. The model has been tested in a microfinance institution. The paper illustrates an example of its use in practice.

Suggested Citation

  • Carlos Serrano-Cinca & Begoña Gutiérrez-Nieto & Nydia M. Reyes, 2013. "A Social Approach to Microfinance Credit Scoring," Working Papers CEB 13-013, ULB -- Universite Libre de Bruxelles.
  • Handle: RePEc:sol:wpaper:2013/140913

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    References listed on IDEAS

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    Cited by:

    1. Hernandez, Manuel A. & Torero, Maximo, 2018. "A poverty-sensitive scorecard to prioritize lending and grant allocation: Evidence from Central America," Food Policy, Elsevier, vol. 77(C), pages 81-90.

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    More about this item


    microfinance; credit scoring; decision support system; social impact; multicriteria; social finance;
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