Shaming Microloan Delinquents: Evidence from a Field Experiment in China

• 成果类型: Article
• 署名作者: Bu, Di; Liao, Yin
• 署名单位: Macquarie University
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2021.4007
• 发表日期: 2022
• 页码: 3768-3790
• 关键词: individual microloan; repayment behavior; social appeal; shaming penalties; informal insurance dependence

摘要

We study the effects of village credit information sharing on individual microloan repayment, using a randomized experiment with loan applicants from 40 villages in rural China. In our main treatment, customers received a message on the loan application form that overdue payment (40 days after each installment due date) will be considered for public disclosure among the village by showing debtors' names on a blackboard outside the village office of the microlending institution. On average, this social appeal reduces the share of delinquents and the individual delinquency rate by 18.6% and 5.6% from baseline rates of 79.5% and 15.2%, respectively. The effects appear more pronounced among male and older borrowers. Additional treatments help to benchmark the effect against lender credit information sharing and separate the effects on adverse selection and moral hazard. Mechanism analysis shows that the publicly disclosed blacklist of delinquents affects borrowers' repayment behaviors, partially through borrowers' fear of losing informal risk insurance from the village society and predominately through public shaming penalties. Overall, these results support that, in traditional societies, social appeals can provide not only pecuniary, but also psychological incentives to improve loan repayment. Psychological incentives, to some extent, have stronger effects.