Too Fast, Too Furious? Digital Credit Delivery Speed and Repayment Rates
As part of the Vilfredo Pareto Research Seminar series, the International Economics Department at the Geneva Graduate Institute is pleased to invite you to a public talk given by Alfredo Burlando.
ABSTRACT
Digital loans are a source of fast, short-term credit for millions of people. While digital credit broadens market access and reduces frictions, default rates are high. We study the role of the speed of delivery of digital loans on repayment. Our study uses unique administrative data from a digital lender in Mexico and a regression-discontinuity design. We show that reducing loan speed by doubling the delivery time from ten to twenty hours decreases the likelihood of default by 21%. Our findings suggest that selectively slowing down credit could improve lender profitability and help consumers avoid default.
Too Fast, Too Furious? Digital Credit Delivery Speed and Repayment Rates, joint with Michael A. Kuhn and Silvia Prina
About the Speaker
Aldredo Burlando is a Development Economist working on the digitization of finance, financial inclusion, and the determinants of schooling and health in low income countries. He is particularly interested in the use of financial instruments for the social protection of vulnerable populations in the Global South. He is affiliate of the Center for Effective Global Action (CEGA), the Abdul Latif Jameel Poverty Action Lab (J-PAL) and Innovations for Poverty Action (IPA).
In the Department of Economics at the University of Oregon, he is the co-Director of the Master’s Program in Economics.