Low access to credit is one of the main concerns of public policy, especially in low and middle income countries. For that reason finding new ways to reduce the barriers of entry into credit markets without increasing the risk for lenders calls the attention of academics, policy makers and entrepreneurs.
This is also the case of Bolivia, a low income country in South America, where microcredit has been increased sharply in the last decades in order to reduce poverty and inequality . In that sense, our study aims to contribute to this analysis by measuring the relationship between financial and non-financial services in the case of a dynamic borrowing, working together with a financial institution in Bolivia, El Banco del Desarrollo Productivo (BDP).
The study’s main goals are:
To measure the impact of future incentives on repayment behavior.
To measure possible complementarities between access to credit and training.
Thus, we design an experimental study on a subset of BDP’s clients. In our study, actual clients we will randomly receive an offer of different opportunities to better credit conditional on good payment behavior. We will also have mixed access to better credit and training in order to measure the complementarities between both services, independently of the dynamic incentives.