Credit Market Consequences of Improved Personal Identification: Field Experimental Evidence from Malawi
Xavier Gine, Jessica Goldberg, and Dean Yang
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6
(
102
)
American Economic Review
2923-2954
October
2012
Abstract
We implemented a randomized field experiment in Malawi examining borrower responses to being fingerprinted when applying for loans. This intervention improved the lender’s ability to implement dynamic repayment incentives, allowing it to withhold future loans from past defaulters while rewarding good borrowers with better loan terms. As predicted by a simple model, fingerprinting led to substantially higher repayment rates for borrowers with the highest ex ante default risk, but had no effect for the rest
