Determinants of Demand for a Consumer Credit to a Private Customer of a Bank

This paper is aimed to investigate how sociodemographic characteristics of borrowers influence the demand for consumer loans during the period after the economic crisis of 2014-15. For this purpose the analysis of demand for consumer loans in Russia has been carried out for the periods during the crisis (2014-2015), before it (2012-2013) and after it (2016-2017). It was defined that it is important to study a sociodemographic profile of borrowers during the post-crisis period because volumes of consumer crediting have grown and a considerable part of people having demand for loans during the crisis belonged to the category of risky borrowers. We have developed a hypothesis that in comparison with the crisis period, the average income of potential and actual borrowers has grown, and the risk level in the sector of consumer crediting has decreased. In order to check the hypothesis we have studied the methods of loan demand modeling, conducted a survey and estimated a multinomial probit model. As a result, our hypothesis was confirmed: according to predictions of the model, the greatest probability of having a loan is observed for people with income of 40-70 thousand rubles. In comparison with statistics of the crisis period, distribution on income was considerably displaced towards a wealthier group of borrowers. It is possible to draw a conclusion that growth of consumer crediting volumes after 2015 has happened due to category of reliable borrowers, so, it is possible to speak about decrease in risks in the consumer crediting sector in Russia. Estimation of elasticity has shown that sensitivity of loan demand to the interest rate is directly proportional to the level of client's reliability. Results of the paper can be used at the macro level by market regulators for assessment of efficiency of the pursued policy and at the micro level by heads of banks when developing credit offers.