US EditionSlowing down digital loans to speed up repayment: Evidence from Mexico
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Slowing down digital loans to speed up repayment: Evidence from Mexico
While digital credit broadens market access and reduces frictions in developing countries, default rates are often high. In Mexico, reducing loan speed—by doubling delivery time—decreased the likelihood of default significantly. Such waiting periods used to selectively slow down credit could help improve lender profitability.
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