Texting to nudge loan repayment
Intervention · Financial Products
Can text reminders lead to better loan repayments?
Intervention Description
Behavioral nudges to encourage loan repayment is an important topic of research, especially in the developing world. One study in Uganda contrasted monetary rewards encouraging repayment with text messages. Researchers examined loan repayment in one group where participants were offered a 25% decrease in their interest rate; another group was sent a reminder text message each month before their loan payment was to be paid. The text messages resulted in approximately the rate of repayment as the monetary incentives.
WANT TO WORK TOGETHER ON A RELATED PROBLEM?
Effective interventions start with a nuanced understanding of how decisions are made. Our mission is to help large organizations be better and do better, using behavioral science.
