Research on Debt Risk and Default Behavior among Pastoral Households in Southern Xinjiang: Evidence from Field Surveys in Minfeng County

Abstract

Pastoral households in Southern Xinjiang face increasing financial pressure driven by climate variability, fragile ecological conditions, and limited access to formal financial services. Using primary data collected from a field survey of 312 pastoral households in Minfeng County, this study examines the determinants of debt risk and the behavioral patterns associated with loan default. Descriptive statistics, logistic regression, and a household debt-risk index (HDRI) are employed to quantify risk exposure and identify the socio-economic, ecological, and institutional factors that influence repayment behavior. Results show that 62.8% of surveyed households hold outstanding debt, and 18.6% have experienced some form of repayment difficulty or partial default in the past three years. Herd size volatility, unstable market access, health-related shocks, and informal borrowing networks significantly elevate debt risks. Access to financial literacy training, stable livestock income, and diversified livelihoods reduce the probability of default. The findings highlight the structural constraints faced by marginalized pastoral communities in China’s arid regions and underscore the need for targeted credit programs, early-warning monitoring tools, and adaptive pastoral-risk governance.