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Credit Screening with Cash Deposits / Paul Gertler, Brett Green, Catherine Wolfram.
- Format:
- Book
- Author/Creator:
- Gertler, Paul.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w35001.
- NBER working paper series no. w35001
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2026.
- Summary:
- We study a cash loan contract that requires borrowers to make a cash deposit prior to disbursement. The deposit is credited toward the loan principal at disbursement and does not alter repayment incentives. In a randomized controlled trial, we find that the deposit requirement reduces loan take-up but selects borrowers who repay substantially better, raising lender profits. The deposit screens borrowers on both observable and latent characteristics: high-risk borrowers are less likely to take deposit loans and, controlling for all observables, deposit-loan takers repay at a higher rate, particularly among low-risk borrowers.
- Notes:
- March 2026.
- Print version record
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