IIIT-Bangalore

To determine formal financial products that are appropriate to low-income households (HHs) remains a crucial question. As part of answering this question, using the KGFS Administrative Dataset (2018), this study aims to find patterns in borrowing in households with similar demographics. The patterns of interest are type of loan; loan amount; time of borrowing and evidence of cyclic borrowing; and success in repayment or default.

To analyse these patterns, techniques offered by Event History Analysis (EHA) will be used. EHA considers HH parameters, such as occupation and income, and their variations in time.

A concept that particularly distinguishes EHA is its ability to handle missing or incomplete data. Discovering such patterns will help in understanding loan distress or over-indebtedness and the factors that determine the choice of formal financial products and services by low-income HHs. These results can provide insights into how financial products can be tailored to specific HHs.