Consumer Loan Flexibility

Last registered on December 02, 2022

Pre-Trial

Trial Information

General Information

Title
Consumer Loan Flexibility
RCT ID
AEARCTR-0006109
Initial registration date
July 05, 2020

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
July 08, 2020, 5:11 PM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Last updated
December 02, 2022, 1:16 PM EST

Last updated is the most recent time when changes to the trial's registration were published.

Locations

Region

Primary Investigator

Affiliation
Stanford GSB

Other Primary Investigator(s)

PI Affiliation
World Bank
PI Affiliation
UCSD & Bocconi University

Additional Trial Information

Status
Completed
Start date
2020-07-06
End date
2022-04-05
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
We are testing the effectiveness of offering payment flexibility to consumer borrowers in India during the COVID-19 crisis. We test whether offering late-paying borrowers who have taken out loans to purchase smartphones in India an additional 3 months to repay their loan improves the performance of the loans, how it affects borrowers’ perceptions of the lender, and their willingness to do repeat business with the lender.
External Link(s)

Registration Citation

Citation
Fiorin, Stefano, Joseph Hall and Martin Kanz. 2022. "Consumer Loan Flexibility." AEA RCT Registry. December 02. https://doi.org/10.1257/rct.6109-3.0
Sponsors & Partners

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Experimental Details

Interventions

Intervention(s)
EXPERIMENT 1

Late-paying borrowers who have taken out loans to purchase smartphones in India receive phone calls from the lender and are made different offers. Some borrowers are offered a 3 months moratorium on their loan in exchange for a small fee. They are told that the offer is an initiative of the lender to help struggling borrowers. Other borrowers are made an identical 3 months moratorium offer, but are told that the offer is made as a result of a new directives from the central bank. Finally, other borrowers are not made any flexibility offer, and receive instead either a debt-collection call or a placebo check-in call.

Borrowers receive phone calls with varying content.

Treatment 1A contains an offer for a 3-month payment holiday on their loan, accompanied by messaging explaining that the offer made is because the company cares for its customers.

Treatment 1B contains an offer for a 3-month payment holiday on their loan, accompanied by messaging explaining that the offer is made because the regulators have encouraged all lenders to extend such offers.

Treatment 1C/Placebo contains no offer, but rather a friendly check-in call directing the borrower to informational resources.

Treatment 1D/Control contains no offer, but rather a request for repayment of the loan, as the lender would do in this situation typically.

EXPERIMENT 2
Participants from treatments 1A and 1B of experiment 1 participate in a second experiment, and are cross-randomized in four conditions. They receive a phone call from the lender and are made different offers. In the first dimension of randomization, some borrowers are offered another loan, while others are offered a non-credit product (“enhanced credit report”). In the second dimension of randomization, some offers are “branded” (mention the name of the lender), while other offers non-branded (do not mention the name of the lender).

Participants from treatments 1A and 1B of experiment 1 receive phone calls with varying content.

Treatment 2A contains an offer for a branded loan.

Treatment 2B contains an offer for a non-branded loan.

Treatment 2C contains an offer for a branded report.

Treatment 2D contains an offer for a non-branded report.
Intervention (Hidden)
Intervention Start Date
2020-11-09
Intervention End Date
2021-07-30

Primary Outcomes

Primary Outcomes (end points)
There are three key outcome variables.

Outcome 1: Responses to surveys. We will survey borrowers to ask about their perceptions of the lender, the government, and the marketplace.

Outcome 2: Long-term repayment rate of loans.

Outcome 3: Willingness of borrowers to do repeat business with the lender.
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
EXPERIMENT 1

Borrowers receive phone calls with varying content.

Treatment 1A contains an offer for a 3-month payment holiday on their loan, accompanied by messaging explaining that the offer made is because the company cares for its customers.

Treatment 1B contains an offer for a 3-month payment holiday on their loan, accompanied by messaging explaining that the offer is made because the regulators have encouraged all lenders to extend such offers.

Treatment 1C/Placebo contains no offer, but rather a friendly check-in call directing the borrower to informational resources.

Treatment 1D/Control contains no offer, but rather a request for repayment of the loan, as the lender would do in this situation typically.

EXPERIMENT 2

Participants from treatments 1A and 1B of experiment 1 receive phone calls with varying content.

Treatment 2A contains an offer for a branded loan.

Treatment 2B contains an offer for a non-branded loan.

Treatment 2C contains an offer for a branded report.

Treatment 2D contains an offer for a non-branded report.
Experimental Design Details
Randomization Method
Randomized by computer.
Randomization Unit
Individual-level randomization.
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
Experiment 1: 9.623 individuals
Experiment 2: 1,160 individuals
Sample size: planned number of observations
Experiment 1: 9.623 individuals Experiment 2: 1,160 individuals
Sample size (or number of clusters) by treatment arms
Experiment 1:
1,901 in Treatment A
1,829 in Treatment B
2,452 in Treatment C/Placebo
3,441 in Treatment D/Control

Experiment 2
134 in 1A-Treatment 2A branded loan.
133 in 1B-Treatment 2A branded loan.
136 in 1A-Treatment 2B non-branded loan.
124 in 1B-Treatment 2B non-branded loan.
143 in 1A-Treatment 2C branded report.
161 in 1B-Treatment 2C branded report.
159 in 1A-Treatment 2D non-branded report.
169 in 1B-Treatment 2D non-branded report.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB

Institutional Review Boards (IRBs)

IRB Name
Stanford University IRB
IRB Approval Date
2020-04-07
IRB Approval Number
55386

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials