Review of Finance 2026

Behavioral messages and debt repayment

Giorgia Barboni¹; Juan Camilo Cárdenas^2,3; Nicolás de Roux²

¹ Warwick Business School and CAGE, University of Warwick , Coventry, CV47AL, · ² Department of Economics, Universidad de Los Andes , Bogotá, · ³ Department of Economics, University of Massachusetts Amherst , Amherst, MA,

Abstract

We conduct a randomized experiment involving 7,063 late-paying clients of a large Colombian bank to compare the effects of text messages that leverage different behavioral motives on loan delinquency. Our results show that receiving a message decreases the likelihood of borrowers being late by 4 percent. The effects are more pronounced and persistent when messages leverage social norms. Using machine learning tools, we find that the effects are higher among borrowers with higher credit scores and unsecured loans. A second experiment shows that this type of message is ineffective in preventing on-time borrowers from falling into loan delinquency.

DOI

10.1093/rof/rfag015

Language

en

Sources

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