Determinants of Repayment among Male and Female Microcredit Clients in the USA. An Approach Based on Managers’ Perceptions

Emilio M. Santandreu, Joaquín López Pascual and Salvador Cruz Rambaud (2020). Determinants of Repayment among Male and Female Microcredit Clients in the USA. An Approach Based on Managers’ Perceptions (Sustainability). February, 2020. 

Research on microfinance institutions (MFIs) has normally been focused on developing and emerging markets. However, an analysis of developed countries is also important for foreign MFIs wishing to take advantage of the growth potential of those markets. Therefore, the aim of this article is to determine whether MFIs working in the USA’s market should change or adapt their microcredit policies with respect to women. In e ect, there are no studies in the USA supporting the argument that women are a better risk of microcredit than men, or that there are di erences in microcredit repayment behavior between women and men. Additionally, it was investigated if the payment behavior of women and men is related to variables such as their age, ethnicity, academic level, marital status, or the characteristics of the microcredits, like purposes, amounts, and payment terms. In the USA, there are not—as in other countries—strong incentives, motivations, or external pressures, other than those that men also have, which influence women to pay their microloans better than men. Then, domestic and international MFIs attracted to enter the USA’s market should review their microcredit policies in relation to women. More research is needed about the microfinance market in the USA.



Microfinance institutions in the USA: the glocalization of microcredit policies in relation to gender

Emilio M. Santandreu and Joaquín López Pascual (2019) "Microfinance institutions in the USA: the glocalization of microcredit policies in relation to gender" Enterprise Development and Microfinance (Practical Action Publishing), June 01, 2019 

The aim of this research was to inquire if foreign microfinance institutions (MFIs), interested in entering the US microfinance market because of its location advantages, should glocalize their microcredit policies. Research found that women in the USA are a no better risk for microcredit than men, and there are no differences in the repayment of microloans between men and women. The payment behaviour of women and men related to certain specific variables was also investigated. A survey sent to 203 MFIs was used, to which 17.73 per cent responded. Findings show that, in the USA, there are no strong incentives, motivations or external pressures which influence women to pay microcredits better than men. Therefore, international MFIs entering the USA should glocalize their microcredit policies in relation to women as well as their product design and policies for granting microloans.


ORCID iD icon

Neural implications of investment banking experience in decision-making under risk and ambiguity

Ortiz-Teran, Elena; Ortiz, Tomas; Turrero, Agustin; Lopez-Pascual, Joaquin. (2019). “Neural implications of investment banking experience in decision-making under risk and ambiguity”. Journal of Neuroscience, Psychology, and Economics, Jan 28 , 2019.


Financial decision-making is governed by cognitive and emotional processes. However, it is possible to learn how to manage both before making a decision based on experience. Electroencephalography might provide some insight into what is behind these choices by analyzing the slow negativity preceding a risky decision, known as the decision preceding negativity (DPN). The DPN is involved in cognitive processes associated with the elaboration of the planned response as well as the anticipation of the affective motivational stimuli. Using monetary gamble under risk (outcome probabilities are known) and ambiguity (outcome probabilities are unknown), we studied the DPN in a group of investment bankers, to see if individual financial experience influences anticipatory potentials that precede choices. Our results showed that investment bankers are able to shorten their anticipatory decision-making process by having a DPN closer to motor response. As this occurs, the prefrontal and orbitofrontal brain areas under risk were activated due to the role that emotions play in financial decision-making. On the other hand, under the ambiguity condition, activation of the prefrontal areas was caused by cognitive regulation of emotion. Our conclusion is that financial experience also influences risky choices by shortening the decision-making process while balancing cognitive and emotional processes, which depend on the amount of missing information. (PsycINFO Database Record (c) 2019 APA, all rights reserved)


Preferences over sequences of payments: A new validation of the q-exponential discounting

Salvador Cruz Rambaud, Joaquín López Pascual, María de los Ángeles del Pino Álvarez. (2019). "Preferences over sequences of payments: A new validation of the q-exponential discounting" Volume 515. Physica A: Statistical Mechanics and its Applications-Journal-Elsevier. pp 332-345


The preference for incremental gains, or the improving sequence effect, has been presented as one of the most important anomalies in intertemporal choice. Usually, the experiments to verify this effect have been based on sequences of incomes, and most of them have shown a preference for an increasing sequence. The objective of this paper is to analyse this topic in the context of loan repayment plans where a preference for constant and decreasing over rising payments is expected. The methodology applied in this paper is based on the use of questionnaires in the same way as Hoelzl et al. (2011) to evaluate different loan plans with the same interest rates and durations. It clearly shows that people prefer those plans which repay more at the beginning of the loan duration. Thus, the main contribution of this paper is the use of the q-exponential discounting to explain this revealed decreasing sequence effect because the q-exponential discount function can exhibit the inconsistency in intertemporal choices based on a decreasing interest rate. Finally, recommendations are made for banking institutions when considering their strategies of interest rate offers in the context of bank marketing.

On asset managers, hedge funds and ETFs

Joaquín López Pascual, Santiago Camarero Aguilera (2017). Nº14 "On asset managers, hedge funds and ETFs",  in The IEB Aestimatio. International Journal of Finance, pp 26-45


The returns generated by the traditional asset management industry do not justify the current fees charged. An "excessive" reward for the risk taken leads to the assumption of disproportionate risks and to a non-efficient allocation of resources. This situation has been become more evident with the appearance of low-cost index-tracking funds, such as exchange-traded funds (ETFs) and robo-advisors, which are favoured in the current low-return, low-volatility and high-correlation investment climate. However, the market cannot be entirely made up of index funds with no discrimination; this would ultimately lead to a massive misallocation of capital.


In this context, the traditional asset management and hedge fund industries need to evolve and adapt to the new environment that requires more transparency, lower fees and new pay structures with more robust set ups.