Low-income households (HHs) face vagaries in income and expenses. These often require the HH to borrow and can cause the HH to become over-indebted. Financial Diaries capture information on incomes, expenses, loans, and shocks with fine granularity and at frequent intervals. In this article, such a dataset is analyzed using the event history analysis approach in order to quantify the risk of HHs becoming over-indebted. Over-indebtedness is defined using two rubrics: monthly debt-to-income ratio and sacrifices made by the HH. The results of this analysis may be used by institutions to customize financial instruments based on the characteristics of an HH.
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