A Personal Touch: Text Messaging for Loan Repayment

Dean Karlan, Melanie Morten and Jonathan Zinman

No 17952, NBER Working Papers from National Bureau of Economic Research, Inc

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.

JEL-codes: D21 D92 G21 O16 O17 (search for similar items in EconPapers)
Date: 2012-03
New Economics Papers: this item is included in nep-ban and nep-exp
Note: CF LS
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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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