A social and environmental approach to microfinance credit scoring

Serrano-Cinca, C. (Universidad de Zaragoza) ; Gutiérrez-Nieto, B. (Universidad de Zaragoza) ; Reyes, N. M.

Resumen: Microfinance institutions provide loans to low-income individuals. Their credit scoring systems, if they exist, are strictly financial. Although many institutions consider the social and environmental impact of their loans, they do not incorporate formal systems to estimate these social and environmental impacts. This paper proposes that their creditworthiness evaluations should be coherent with their social mission and, accordingly, should estimate the social and environmental impact of microcredit. Thus, a decision support system to facilitate microcredit granting is proposed using a multicriteria evaluation. The assessment of social impact is performed by calculating the Social Net Present Value. The system captures credit officers'' experience and addresses incomplete and intangible information. The model has been tested in a microfinance institution. The paper shows how a small institution can include social and environmental issues in its decision-making systems to evaluate credit applications. A gap in the preferences was found between members of the board, who are socially driven, and managers and credit officers, who are financially drifted. This mission drift was corrected. The approach followed contributed to creating a culture of social and environmental assessment within the institution, especially among credit officers, thereby translating Microfinance institutions'' social mission into numbers.

Idioma: Inglés

DOI: 10.1016/j.jclepro.2015.09.103

Año: 2016

Publicado en: Journal of Cleaner Production 112, 4 (2016), 3504-3513
ISSN: 0959-6526

Factor impacto JCR: 5.715 (2016)

Categ. JCR: ENGINEERING, ENVIRONMENTAL rank: 6 / 49 = 0.122 (2016) - Q1 - T1
Categ. JCR: GREEN & SUSTAINABLE SCIENCE & TECHNOLOGY rank: 5 / 31 = 0.161 (2016) - Q1 - T1
Categ. JCR: ENVIRONMENTAL SCIENCES rank: 17 / 229 = 0.074 (2016) - Q1 - T1

Factor impacto SCIMAGO: 1.659 - Environmental Science (miscellaneous) (Q1) - Strategy and Management (Q1) - Renewable Energy, Sustainability and the Environment (Q1) - Industrial and Manufacturing Engineering (Q1)

Financiación: info:eu-repo/grantAgreement/ES/DGA/S14-3
Financiación: info:eu-repo/grantAgreement/ES/MICINN/ECO2010-20228
Financiación: info:eu-repo/grantAgreement/ES/MINECO/ECO2013-4556

Tipo y forma: Article (PostPrint)

Área (Departamento): Área Economía Finan. y Contab. (Dpto. Contabilidad y Finanzas)