A Personal Touch: Text Messaging for Loan Repayment

Melanie Morten, Dean Karlan and Jonathan Zinman

Working Papers from Economic Growth Center, Yale University

Abstract: We worked with two microlenders to test impacts of randomly assigned reminders for loan repayments in the “text messaging capital of the world”. We do not find strong evidence that loss versus gain framing or messaging timing matter. Messages only robustly improve repayment when they include the loan officer’s name. This effect holds for clients serviced by the loan officer previously but not for first-time borrowers. Taken together, the results highlight the potential and limits of communications technology for mitigating moral hazard, and suggest that personal obligation/reciprocity between borrowers and bank employees can be harnessed to help overcome market failures.

Keywords: microcredit; microfinance; randomized evaluation; development finance (search for similar items in EconPapers)
JEL-codes: D21 D92 G21 O16 O17 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2012-03
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

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Related works:
Working Paper: A Personal Touch: Text Messaging for Loan Repayment (2012)
Working Paper: A Personal Touch: Text Messaging for Loan Repayment (2012)
Working Paper: A Personal Touch: Text Messaging for Loan Repayment (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:egc:wpaper:1011

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