TY  - JOUR
AU  - Karlan,Dean
AU  - Morten,Melanie
AU  - Zinman,Jonathan
TI  - A Personal Touch: Text Messaging for Loan Repayment
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 17952
PY  - 2012
Y2  - March 2012
UR  - http://www.nber.org/papers/w17952
L1  - http://www.nber.org/papers/w17952.pdf
N1  - Author contact info:
Dean Karlan
Department of Economics
Yale University
P.O. Box 208269
New Haven, CT 06520-8629
Tel: 203/432-4479
Fax: 203/432-5591
E-Mail: dean.karlan@yale.edu

Melanie Morten
Yale University
27 Hillhouse Avenue
New Haven, CT 06511
E-Mail: melanie.morten@yale.edu

Jonathan Zinman
Department of Economics
Dartmouth College
314 Rockefeller Hall
Hanover, NH 03755
Tel: 603/646-0075
Fax: 603/646-2122
E-Mail: jzinman@dartmouth.edu
AB  - We worked with two microlenders to test impacts of randomly assigned reminders for loan repayments in the “text messaging capital of the world”. We do not find strong evidence that loss versus gain framing or messaging timing matter. Messages only robustly improve repayment when they include the loan officer’s name. This effect holds for clients serviced by the loan officer previously but not for first-time borrowers. Taken together, the results highlight the potential and limits of communications technology for mitigating moral hazard, and suggest that personal obligation/reciprocity between borrowers and bank employees can be harnessed to help overcome market failures.
ER  -