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Fintech and household resilience to shocks: Evidence from digital loans in Kenya

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  • Suri, Tavneet
  • Bharadwaj, Prashant
  • Jack, William

Abstract

Developing country lenders are taking advantage of fintech tools to create fully digital loans on mobile phones. Using administrative and survey data, we study the take up and impacts of one of the most popular digital loan products in the world, M-Shwari in Kenya. While 34% of those eligible for a loan take it, the loan does not substitute for other credit. The loans improve household resilience: households are 6.3 percentage points less likely to forego expenses due to negative shocks. Fintech tools can be a crucial way to improve financial access and household resilience.

Suggested Citation

  • Suri, Tavneet & Bharadwaj, Prashant & Jack, William, 2021. "Fintech and household resilience to shocks: Evidence from digital loans in Kenya," Journal of Development Economics, Elsevier, vol. 153(C).
    • Handle: RePEc:eee:deveco:v:153:y:2021:i:c:s0304387821000742
    DOI: 10.1016/j.jdeveco.2021.102697
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    More about this item

    Keywords

    Digital loans; Regression discontinuity; Africa;
    All these keywords.

    JEL classification:

    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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