From a new working paper by Xavier Giné, Jessica Goldberg, and Dean Yang:
We report the results of a randomized field experiment that examines the credit market impacts of improvements in a lender’s ability to determine borrowers’ identities. Improved personal identification enhances the credibility of a lender’s dynamic repayment incentives by allowing it to withhold future loans from past defaulters and expand credit for good borrowers. The experimental context, rural Malawi, is characterized by an imperfect identification system. Consistent with a simple model of borrower heterogeneity and information asymmetries, fingerprinting led to substantially higher repayment rates for borrowers with the highest ex ante default risk, but had no effect for the rest of the borrowers. The change in repayment rates is driven by reductions in adverse selection (smaller loan sizes) and lower moral hazard (for example, less diversion of loan-financed fertilizer from its intended use on the cash crop).
Corporate Social Responsibility: Marketing By Any Other Name…
Signals transmitted
Message received
Reaction making impact
Invisibly
— Rush, “Chemistry,” Signals (1982).
[This post is part of the Aid Blog Forum launched this week by J., who blogs over at Tales from the Hood. For more on the Aid Blog Forum, click here.]
J. writes:
Corporate social responsibility (CSR) is the new sexy thing in the philanthropy and humanitarian fundraising worlds. “Doing well while doing good” is the buzz phrase, and I admit — it’s got a nice, maybe even sensible ring to it. On the other hand, like many humanitarian practitioners I know, I come to the CSR conversation with a healthy dose of cynicism and skepticism. I’ve seen it be really lame a lot of the time, and I’ve seen it go really bad a few times. But the ship has also very obviously sailed. Corporate social responsibility is here to stay. It’s part of the global humanitarian context, for better and/or for worse. As humanitarian relief and development professionals we have to deal with CSR. Here’s where you come in. What do you think?