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The main purpose of this study is to experiment with interest-free microfinance (IFMF) products and investigate the factors affecting IFMF institutions.

This study uses both quantitative and qualitative data types that will be collected through questionnaires, secondary data, interviews and experimental tests to answer key questions. The collected data were analyzed using repeated-measures analysis ANOVA. This study determines the factors affecting the default rate of Islamic microfinance (MF) products, and evaluates the repayment performance of IFMF products using field experiments.

The participants found that the repayment performance level is higher than that of Qard Al-Hassan, which shows that it is one of the best mechanisms to reduce the default rate among borrowers. It has been observed that women have higher repayment performance than men, and those with different income sources have higher repayment performance levels than those who do not. This study showed that the effects of age, marital status and educational status on the repayment performance level of the participants were not statistically significant. In addition, it was shown that the participants’ status of having or not having children did not have a significant effect on the level of repayment performance.

This study differs from other studies in two ways. First, in terms of field experimentation, this study focuses on the practical impact of IFMF products on customer reimbursement performance. Second, this study tested different demographic variables that could affect the reimbursement performance.

In this paper, the authors investigate whether coronavirus disease 2019 (COVID-19) impacts household finances, like household debt repayments in the UK.

This paper employs a vector autoregressive (VAR) model that nests neural networks and uses Mixed Data Sampling (MIDAS) techniques. The authors use data information related to COVID-19, financial markets and household finances.

The authors' results show that household debt repayments' response to the first principal component of COVID-19 shocks is negative, albeit of low magnitude. However, when the authors employ specific COVID-19-related data like vaccines and tests the responses are positive, insinuating the underlying dynamic complexities. Overall, confirmed deaths and hospitalisations negatively affect household debt repayments. The authors also report low persistence in household debt repayments. Generalised impulse response functions (IRFs) confirm the main results. As draconian measures, the lockdowns are eased and the COVID-19 shocks are diminishing, and household financial data converge to the levels prior to the pandemic albeit with some lags.

To the best of the authors' knowledge, this is the first study that examines the impact of the pandemic on household debt repayments. The authors' findings show that policy response in the future should prioritise innovation of new vaccines and testing.

The purpose of this paper is to measure the antecedents of students' attitude and the impact of students' attitude on the intention to repay study loans.

Primary data from 428 students in universities in Malaysia are collected and six constructs from theory are identified: perceptions that loan repayment will affect the quality of life after graduation; awareness of loan repayment issues created by media; perceptions towards loan agreement; parental influence; students' attitude towards loan repayment; and intention to repay loan. Structural equation modelling approach is adopted to analyze the data.

Constructs of parental influence and perceptions that loan repayment will affect the quality of life after graduation are found to have a direct relationship with students' attitude towards loan repayment; perceptions towards loan agreement is found to influence belief that loan repayment will affect the quality of life after graduation; and awareness of loan repayment issues created by media is found to affect parental influence. The relationship between students' attitude and intention is found to be statistically positive and significant.

The study has been conducted in aggregate form. Future studies could account for ethnic, gender, and regional differences.

The primary users of the results of this study would be the countries that provide education loans, and keen to cut down on student loan defaults.

The study is first of its kind to approach the issue of student loan defaults in a multi‐method manner and develop a comprehensive theoretical model that can be put to empirical test by future researchers.

To enhance the loan repayment performance of microfinance institutions (MFIs) in Pakistan, this study aims to analyze the direct impact of social capital and loan credit terms on loan repayment performance and microenterprises’ business performance while considering the mediating role of microenterprises’ business performance on the relationship between social capital, loan credit terms and loan repayment performance.

The analysis was conducted based on the data gathered via a questionnaire distributed to 316 microenterprises owners. The respondents were selected using the stratified sampling technique by dividing the target population into three influential groups of manufacturing, trading and services microenterprises. The reliability and validity of the constructs were established using (1) factor loading, (2) Cronbach’s alpha, (3) composite reliability, (4) average variance extracted, (5) the variance inflation factor, (6) the Fornell–Larcker criterion and (7) the heterotrait–monotrait ratio. The structural equation modeling technique was then applied, and the hypotheses were tested based on the structure model generated through bootstrapping by using partial least squares structural equation modeling.

The results confirm the direct impact of social capital and loan credit terms on microenterprises’ business performance and loan repayment performance. It also supports the mediating role of microenterprises’ business performance toward the relationship between social capital, loan credit terms and loan repayment performance while considering the direct impact of microenterprises’ business performance on loan repayment performance.

To date, the direct impact of social capital and loan credit terms on microenterprises’ business performance and loan repayment performance has been hardly investigated in the context of Pakistan. This study also examines the mediating role of microenterprises’ business performance toward social capital, loan credit terms and loan repayment performance. The findings will enable both MFIs and microenterprises to improve their business performance and loan repayment performance through enhanced social ties and the development of more flexible credit products that protect the borrowers’ interests and the interest of lenders.

Information concerning the long‐term consequences of credit repayment decisions is often not available for flexible credit facilities such as credit cards. The purpose of this paper is to investigate the role of such information in repayment decisions. A dual mental accounting model of money management predicted that repayments would be influenced by both total cost and loan duration information. Experiment 2 also investigated the role of key economic and psychological factors, including some related to a risk defusing operator model of risk management.

In two questionnaire‐based experiments bank customers (n=241; 300) were presented with credit card and remortgage repayment scenarios. In both studies, total cost and loan duration information were varied in a 2×2 randomised‐groups factorial design.

In both studies, analysis of covariance showed that information on the long‐term consequences of repayment decisions lead to significantly higher levels of repayment. However, in Experiment 2, it was found using hierarchical multiple regression that disposable income, level of education, and the perception of, and worry about, repayment difficulties had larger significant effects on repayment levels.

The effects of long‐term consequence information were interpreted in terms of mental accounting and future‐oriented thinking. The effect of concern with future repayment difficulties suggests that borrowers choose lower repayments to control such risks.

Providing total cost and loan duration information for a range of repayment levels could help borrowers make better repayment decisions.

These novel findings contribute to our understanding of borrowers’ repayment behaviour.

The purpose of this article is to examine the effects that dynamic incentives and the borrowing histories of clients of informal lending institutions have on loan repayment performance, in particular, the extent to which multiple borrowing and progressive lending affect the repayment of loans.

The paper uses a data set of 835 borrowers drawn from an informal lending institution in Tanzania. Descriptive analysis and econometric models are used to test the developed hypotheses.

Whereas clients with multiple loans are associated with poor loan repayment, progressive lending contributes to positive repayment outcomes. Multiple borrowers face increased debt levels and thereby an increased inability to meet their repayment obligations; in contrast, progressive lending by building up a lender–client relationship helps clients to obtain higher loans with a minimum amount of screening.

This was a cross-sectional study based on a sample of individual clients drawn from a single institution. However, since the majority of clients had also taken out loans with other financial institutions, the sample is considered to be representative.

A client’s past repayment performance and multiple loan history must be assessed so that multiple borrowing can be prevented and credit absorption capacity can be gauged more accurately. The repeated nature of the interactions and the threat to cut off any future lending (if loans are not repaid) can be exploited to overcome any information deficit.

This study was conducted in a context in which the degree of information sharing was low and institutional access to clients’ credit histories was limited. It contributes knowledge on how lenders minimise the risk flowing from the ex ante information gap and moral hazards arising from the ex post information gap.

Like other developing countries, Rwandan rural credit market is repressed, shallow, segmented, inefficient and dual structured where both formal and informal financial systems operate side by side. While the later has been playing a predominant role, cooperative societies have emerged as an apt method of increasing the delivery of formal rural credit and savings facilities on sustainable and non‐exploitative terms albeit of financial imprudence stemming from poor credit repayment records. Thus, the purpose of this paper is to examine the factors contributing to credit repayment behaviour among the members of savings and credit cooperative societies in rural Rwanda.

Both exploratory and descriptive designs are used for primary data collection on variables contributing to the repayment behaviour in savings and cooperative societies. Thereafter, a binary logistic regression empirical model is employed to estimate the contribution of each variable to credit repayment rate.

The results from the tested empirical model show that age, gender and size of the household, purpose for credit, interest rate charges and number of official visits to the credit societies, have a strong effect on loan repayment performance (statistically significant at p<0.05) whereas size of credit disbursed, credit processing and disbursing time, borrowers' market place and income transfer from relatives and friends are more or less statistically significant at p<0.20 level. The remaining factors have logical and explainable sings but are not statistically significant.

The primary limitation of this study is the scope and size of its sample as well as absence of income factor as one of important variable influencing repayment behaviour. These limitations may have an effect on the lending policy of the cooperative banks.

An understanding of the socio‐economic factors affecting repayment behaviour of rural clients is essential for the outreach and sustainability of the mushrooming cooperative societies in the country. Hence, this paper contributes to the empirical literature on the provision of rural financial services in African countries south of Sahara and Rwanda in particular.

This study analyzes the role of information disclosure in influencing credit card repayments by focusing on three intervention methods for improving repayment decisions among credit cardholders.

This study uses the survey method to collect data. Four questionnaires are designed to identify which types of disclosure elicit better repayment decisions among credit cardholders. The participants were approached using the mall intercept method, and a total of 1,775 responses were obtained.

Estimations using means comparison tests show that not providing minimum payment information improves repayments. The expected benefits are not delivered by the provision of higher minimum payment information or additional information that highlights the negative effects of making the minimum repayment only. Further analysis using logit estimation reconfirms the benefit of not providing minimum payment information. However, when such information is given, low minimum payment information elicits better repayment decisions than high minimum payment information or additional information. Repayment worsens under the additional information condition compared to the high minimum payment condition.

The findings of this study have a bearing on the decisions of policy makers, credit card issuers and consumers.

This paper clarifies the role of information in improving debt repayment decisions.

The repayment performance of microfinancing loans funded by donors amounting to hundreds of millions of dollars is an important issue, because it indicates the effectiveness of utilising these funds to alleviate poverty. The purpose of this paper is to develop models to predict the repayment success of microfinancing loans.

Analysing data relating to 1,109 random loan records from Indonesia and Sri Lanka, the study develops models to predict the repayment probability of microfinancing loans using logistic regression.

There are significant differences between the two countries. In Sri Lanka, the time to approve and disburse the loan, loan cycle, gender and age of the borrower, whether a group or individual borrower, the purpose for which the loan is used and visiting frequency by the loan officers were found to be significant when predicting the repayment. Only three factors were significant in Indonesia: time to approve and disburse the loan, interest repayment frequency and gender. Both models have over 70 per cent prediction accuracy.

The models developed can be used in the loan appraisal stage to improve the repayment performance of microfinancing institutions saving hundreds of millions of dollars in bad debt write offs.

Although phone calls are widely used by debt collection services to persuade delinquent customers to repay, few financial services studies have analyzed the unstructured voice and text data to investigate how debt collection call strategies drive customers to repay. Moreover, extant research opens the “black box” mainly through psychological theories without hard behavioral data of customers. The purpose of our study is to address this research gap.

The authors randomly sampled 3,204 debt collection calls from a large consumer finance company in East Asia. To rule out alternative explanations for the findings, such as consumers' previous experience of being persuaded by debt collectors or repeated calls, the authors selected calls made to delinquent customers who had not been delinquent before and were being called by the company for the first time. The authors transformed the unstructured voice and textual data into structured data through automatic speech recognition (ASR), voice mining, natural language processing (NLP) and machine learning analyses.

The findings revealed that (1) both moral appeal (carrot) and social warning (stick) strategies decrease repayment time because they arouse mainly happy emotion and fear emotion, respectively; (2) the legal warning (stick) strategy backfires because of decreasing the happy emotion and triggering the anger emotion, which impedes customers' compliance; and (3) in contrast to traditional wisdom, the combination of carrot and stick fails to decrease the repayment time.

The findings provide a valuable and systematic understanding of the effect of carrot strategies, stick strategies and the combinations of them on repayment time. This study is among the first to empirically analyze the effectiveness of carrot strategies, stick strategies and their joint strategies on repayment time through unstructured vocal and textual data analysis. What's more, the previous studies open the “black box” through psychological mechanism. The authors firstly elucidate a behavioral mechanism for why consumers behave differently under varying debt collection strategies by utilizing ASR, NLP and vocal emotion analyses.