12–13 Jun 2025
Goethe University Frankfurt
Europe/Zurich timezone

The Effects of Information Sharing on Moral Hazard in Credit Markets – Evidence from a Randomized Evaluation in the Philippines

13 Jun 2025, 15:30
30m
Goethe University Frankfurt

Goethe University Frankfurt

Parallel Session Financial Inclusion and Microfinance Parallel Session 4

Speaker

Lisa Spantig (RWTH Aachen)

Description

Moral hazard in credit markets undermines loan repayment. To study whether information sharing among lenders strengthens repayment incentives for borrowers, we combine a theoretical framework with experimental evidence from information campaigns. The campaigns target 5,400 microcredit borrowers in the Philippines and randomly vary their knowledge of an existing credit registry. Campaigns increase borrower effort and reduce monitoring in borrowing groups. While neither investment size nor the use of alternative credit sources are affected, borrowers shift from high-risk, high-return investments to safer, lower-yield alternatives. Repayment rates remain high. An additional treatment arm reveals that these effects are partly driven by a reminder effect of the intervention rather than the informational content itself. This suggest that strategic communication by lenders, even without a registry, can influence borrowers in the short run.

Keyword Financial Inclusion and Microfinance

Authors

Kristina Czura (University of Groningen) Matthias Fahn (University of Hong Kong) Lisa Spantig (RWTH Aachen)

Presentation materials

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