Can Digital Loans Deliver? | Gerald R. Ford School of Public Policy
 
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Type: Seminar
Host: International Policy Center
Series: Economic Development Seminar

Can Digital Loans Deliver?

Tavneet Suri, MIT Sloan School of Management

Speaker

Take Up and Impacts of Digital Loans in Kenya

Date & time

Oct 18, 2018, 4:00-5:30 pm EDT

Location

Developing world lenders are taking advantage of fintech tools to create fully digital loans on mobile phones. We investigate the take up and impacts of one of the most popular digital loan products, M-Shwari in Kenya, using a regression discontinuity design. While 34% of those eligible for the loan take it, this does not substitute for other formal or informal credit. The loans improve household resilience against shocks and increase their propensity to spend on education. These digital loans could therefore be an important way to improve financial access, but they are not a panacea for greater credit market failures.