Welfare-centric Credit Scoring in Nigeria
Corresponding PI: Joshua Blumenstock
While financial service providers have traditionally employed loan officers to decide who can borrow and how much given anticipated repayment rates, digital credit products make lending decisions automatically using algorithms. Algorithmic credit scoring lowers the costs of lending and provides an opportunity to inspect and re-optimize lending decisions to achieve objectives beyond repayment. However, the impacts of these digital credit products remain understudied. In Nigeria, the research team works with a financial service provider to rigorously evaluate the impacts of a digital credit product on clients. The evaluation will investigate the impacts of digital loans on financial welfare, ability to cope with shocks, women’s empowerment, and mental health outcomes; and will determine whether these impacts differ by borrower gender.
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