Beyond Income: The Complexities of Credit Risk in Developing Countries

This paper investigates the complex interplay of factors contributing to credit risk in developing countries. Focusing on borrower characteristics, we examine the interconnected roles of income levels, employment stability, and credit history. The analysis reveals how lower income, volatile employment, and limited credit access can significantly amplify credit risk. The paper explores the challenges posed by these factors in developing economies and proposes strategies to mitigate credit risk and foster financial inclusion. By understanding these dynamics, policymakers and financial institutions can implement targeted interventions to enhance economic resilience and promote sustainable development.