Purpose
In the online microloan market, the ability to evaluate the credit risk of borrowers is key to business success. Based on the general strain theory, this study proposes a contextualized two-stage model with stress factors, negative affects and constraint factors to explain the psychological mechanism of borrowers' default behaviors.
Design/methodology/approach
An online survey is conducted to test the hypotheses. We collect and analyze 713 valid responses through a structural equation model.
Findings
(1) Economic and social strains experienced by borrowers can cause four types of negative affects: life dissatisfaction, perceived unfairness, inferiority feeling and loneliness; (2) Both strains and negative affects have a considerable effect on borrowers' default intention; (3) Moral norm plays a negative moderating role in the relationship between strains, negative affects and default behavior, whereas perceived deterrence shows a strong main effect.
Originality/value
(1) This study introduces the GST from sociology and criminology, and contextualizes it in the microloan context to explain default behavior; (2) This study provides a comprehensive and staged psychological mechanism to explain deviant behavior; (3) This study bears critical implications for the current practice in credit assessment and default prevention.
