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Is Digital Credit Filling a Hole or Digging a Hole? Evidence from Malawi / Valentina Brailovskaya, Pascaline Dupas, Jonathan Robinson.
- Format:
- Book
- Author/Creator:
- Brailovskaya, Valentina.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w29573.
- NBER working paper series no. w29573
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2021.
- Summary:
- Digital credit has expanded rapidly in Africa, mostly in the form of short-term, high-interest loans offered via mobile money. Loan terms are often opaque and consumer financial literacy is low, providing opportunities for predatory lending. A regression discontinuity analysis shows no negative effect of access to digital loans on financial well-being, but the majority of borrowers fail to repay on time and incur high late fees. We randomize exposure to a short phone-based financial literacy intervention. The intervention improved knowledge and marginally improved loan repayment but increased loan demand, increasing overall default risk.
- Notes:
- Print version record
- December 2021.
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