Template-Type: ReDIF-Article 1.0
Author-Name: Alexey A. Upravitelev
Author-Email: a.a.upravitelev@gmail.com
Author-Workplace-Name: St. Petersburg University, St. Petersburg 199034, Russian Federation
Title: Bounded Rationality of Decision-Making by Online Microfinance Organizations´ Consumers
Abstract: Microfinance is very popular in Russia, but this sphere is often associated with a number of socioeconomic problems, one of which is the population’s debt load. Often the clients of microfinance organizations (MFOs) are citizens from the poorest segments of the population who do not have a high level of financial literacy. The trend towards digitalization of the financial sector has a significant impact on the decision-making process of MFO services consumers. The subject of this paper is the problem of bounded rationality of decision-making, typical for users of online services of microfinance organizations. To reduce the negative effects on users of MFO services, the Central Bank reduces the maximum permissible interest rate for this type of organizations, and the Ministry of Finance organizes programs to improve financial literacy. The aim of the study is to estimate the efficiency of existing methods for solving this problem and to propose our own solution based on the concepts of behavioral imperialism. The relevance is that the digitalization of the financial sector is rapidly increasing, since both classic services are moving online and completely new technological financial services (fintech) appear, which requires the user to master new skills of working in the online environment. In conclusion, the author gives his recommendations for financial literacy programs that can reduce the bounded rationality of financial decision-making.
Classification-JEL: G41, G51, G53, G21, G28
Keywords: behavioral finance, consumer financial decision making, financial literacy, digital nudge
Journal: Finansovyj žhurnal — Financial Journal
Pages: 134-147
Issue: 4
Year: 2022
Month: August
DOI: 10.31107/2075-1990-2022-4-134-147
File-URL: https://www.finjournal-nifi.ru/images/FILES/Journal/Archive/2022/4/statii/09_4_2022_v14.pdf
File-Format: Application/pdf 
Handle: RePEc:fru:finjrn:220409:p:134-147