IDEAS home Printed from https://ideas.repec.org/p/fpr/2020br/18(9).html
   My bibliography  Save this paper

Biometric technology in rural credit markets

Author

Listed:
  • Giné, Xavier

Abstract

Identity theft is a common crime the world over. In developing countries, the damage caused by identity theft and identity fraud goes far beyond the individual victim, however, and ultimately creates a direct impediment to progress, particularly in credit markets. Recent research reveals that biometric technology can help reduce these problems. A biometric is a measurement of physical or behavioral characteristics used to verify or analyze identity. Common biometrics include a person’s fingerprints; face, iris, or retina patterns; speech; or handwritten signature. These are effective personal identifiers because they are unique and intrinsic to each person, so, unlike conventional identification methods (such as passport numbers or government-issued identification cards), they cannot be forgotten, lost, or stolen. Recent advances in recognition technology coupled with increases in both digital storage capacity and computer processing speeds have made biometric technology (for example, ocular or fingerprint scanners) feasible in many applications, from controlling restricted building access to allowing more effective delivery of targeted government programs with large-scale identification systems, such as those being implemented in India by the Unique Identification Authority of India. Biometric technology can also improve access to credit and insurance markets, especially in countries that do not have a unique identification system, where identity fraud—the use of someone else’s identity or a fictitious one—to gain access to services otherwise unavailable to an individual is rather common. For example, lenders in Malawi describe past borrowers who purposefully defaulted then tried to obtain a fresh loan from the same or another institution under a false identity. And, although less common in developing countries because markets are less developed, the potential for sick individuals without healthcare coverage to use the insurance policy of a friend or relative does exist. The response of lenders and insurance companies has been to restrict the supply of such services to the detriment of the greater population, not just those people committing identity fraud.

Suggested Citation

  • Giné, Xavier, 2010. "Biometric technology in rural credit markets," 2020 vision briefs 18(9), International Food Policy Research Institute (IFPRI).
  • Handle: RePEc:fpr:2020br:18(9)
    as

    Download full text from publisher

    File URL: http://www.ifpri.org/sites/default/files/publications/focus18_09.pdf
    Download Restriction: no

    More about this item

    Keywords

    Biometric technology; Commodities; conditional cash transfers; credit; Insurance; rural areas; Subsidies;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fpr:2020br:18(9). See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: http://edirc.repec.org/data/ifprius.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.