Cargando…
Promises and pitfalls of digital credit: Empirical evidence from Kenya
Digital credit is a recent innovation that raises hopes of improving credit access in developing countries. However, up until now, empirical research on the extent to which digital credit actually reaches people who are otherwise excluded from conventional credit markets and whether increased credit...
Autores principales: | , , |
---|---|
Formato: | Online Artículo Texto |
Lenguaje: | English |
Publicado: |
Public Library of Science
2021
|
Materias: | |
Acceso en línea: | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8301605/ https://www.ncbi.nlm.nih.gov/pubmed/34297776 http://dx.doi.org/10.1371/journal.pone.0255215 |
_version_ | 1783726707571687424 |
---|---|
author | Johnen, Constantin Parlasca, Martin Mußhoff, Oliver |
author_facet | Johnen, Constantin Parlasca, Martin Mußhoff, Oliver |
author_sort | Johnen, Constantin |
collection | PubMed |
description | Digital credit is a recent innovation that raises hopes of improving credit access in developing countries. However, up until now, empirical research on the extent to which digital credit actually reaches people who are otherwise excluded from conventional credit markets and whether increased credit access is sustainable or threatened by high default and blacklisting rates is very scarce. Using representative data from Kenya, this article shows that digital credit increases borrowing opportunities, including for people less likely to otherwise have credit access in the conventional credit markets. However, we find that digital credit borrowing is also responsible for 90% of all blacklistings, which is partially driven by higher default rates in the digital credit market but also by a higher probability that digital credit defaults lead to blacklisting of the borrower, compared to defaults in other credit markets. |
format | Online Article Text |
id | pubmed-8301605 |
institution | National Center for Biotechnology Information |
language | English |
publishDate | 2021 |
publisher | Public Library of Science |
record_format | MEDLINE/PubMed |
spelling | pubmed-83016052021-07-31 Promises and pitfalls of digital credit: Empirical evidence from Kenya Johnen, Constantin Parlasca, Martin Mußhoff, Oliver PLoS One Research Article Digital credit is a recent innovation that raises hopes of improving credit access in developing countries. However, up until now, empirical research on the extent to which digital credit actually reaches people who are otherwise excluded from conventional credit markets and whether increased credit access is sustainable or threatened by high default and blacklisting rates is very scarce. Using representative data from Kenya, this article shows that digital credit increases borrowing opportunities, including for people less likely to otherwise have credit access in the conventional credit markets. However, we find that digital credit borrowing is also responsible for 90% of all blacklistings, which is partially driven by higher default rates in the digital credit market but also by a higher probability that digital credit defaults lead to blacklisting of the borrower, compared to defaults in other credit markets. Public Library of Science 2021-07-23 /pmc/articles/PMC8301605/ /pubmed/34297776 http://dx.doi.org/10.1371/journal.pone.0255215 Text en © 2021 Johnen et al https://creativecommons.org/licenses/by/4.0/This is an open access article distributed under the terms of the Creative Commons Attribution License (https://creativecommons.org/licenses/by/4.0/) , which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited. |
spellingShingle | Research Article Johnen, Constantin Parlasca, Martin Mußhoff, Oliver Promises and pitfalls of digital credit: Empirical evidence from Kenya |
title | Promises and pitfalls of digital credit: Empirical evidence from Kenya |
title_full | Promises and pitfalls of digital credit: Empirical evidence from Kenya |
title_fullStr | Promises and pitfalls of digital credit: Empirical evidence from Kenya |
title_full_unstemmed | Promises and pitfalls of digital credit: Empirical evidence from Kenya |
title_short | Promises and pitfalls of digital credit: Empirical evidence from Kenya |
title_sort | promises and pitfalls of digital credit: empirical evidence from kenya |
topic | Research Article |
url | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8301605/ https://www.ncbi.nlm.nih.gov/pubmed/34297776 http://dx.doi.org/10.1371/journal.pone.0255215 |
work_keys_str_mv | AT johnenconstantin promisesandpitfallsofdigitalcreditempiricalevidencefromkenya AT parlascamartin promisesandpitfallsofdigitalcreditempiricalevidencefromkenya AT mußhoffoliver promisesandpitfallsofdigitalcreditempiricalevidencefromkenya |