On February 1st, CEGA’s Digital Credit Observatory (DCO) hosted Digital Credit Speed and Repayment Rates in Mexico as part of the DCO Webinar Series. Alfredo Burlando (University of Oregon)and Silvia Prina (Northeastern) presented preliminary results from the DCO-funded project, Slowing Down Digital Credit.
The digital credit market has recently emerged as a source of fast, remotely-provided, short-term loans for millions of people in low- and middle-income countries. But the consumer protection implications of easy, quick credit are not well known. Digital credit may be able to help households cope with unexpected shocks, but the ease and speed of accessing lines of credit could potentially increase defaults or over-indebtedness.
Could longer waiting periods affect repayment behavior? To answer this question, the researchers worked with a web-based lender in Mexico to investigate the effect of delayed delivery of otherwise relatively instant credit.
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