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Household Credit Behaviour and Factors for Its Transformation: Evidence from Russian Monotown

Household Credit Behaviour and Factors for Its Transformation: Evidence from Russian Monotown

Journal of Economic Regulation, , Vol. 7 (no. 3),

Current trends in Russian consumer lending, especially against the backdrop of economic crisis of recent years, highlight increasing relevance of the issue of sustainable household credit behavior. Survey conducted in December 2014 and January 2015 was focused on credit behavior of people who live in small depressed Russian monotown Gukovo (sample size is 80 respondents, with the total population of 65,4 thousand people as of January 1, 2015). The study aimed to provide empirical support for the main hypothesis that it is possible to influence the borrowing intentions of the local households to make borrowing more sustainable, through participation of local administration in developing and implementing rational lending programs, as well as in promoting successful rational lending practices aligned with the goals and objectives of local economic development. Data obtained through the personal structured interviews followed a specific questionnaire served as the basis for the model of logistic regression. As the findings have shown, a proportion of local households surveyed demonstrates readiness to change borrowing intentions toward more sustainable borrowing. In addition, provided the target loans developed with the participation of local authority are available, the number of potential borrowers may grow by 18,75%. The factors which can positively influence the active borrowing behavior toward its sustainability are identified and ranked in terms of their importance from the respondents’ perspectives. A statistical profile of the potential borrower of sustainable loan to be developed with the participation of local authority is defined. Young men, who show positive attitudes toward credit use, as the family size and number of dependents grow, are more likely to apply for such credit.


Keywords: household credit behavior; sustainable credit; local authority; small monoindustrial town; survey; development of new credit products.

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