What Matters for Consumer Credit Choice? Non-standard disclosures in the Philippine Digital Credit Market

Researchers: Michael King, Paolina Medina, Roland Umanan, and Benjamin Radoc

Partners: Philippine Competition Commission

Location: Philippines

Sample: 4,000 Filipino citizens

Timeline: 2023

Theme: Digital Credit, Consumer Protection

Description:

This study focuses on the digital credit landscape in the Philippines, where the popularity of high-interest, short-term loans raises concerns about consumer protection. The research aims to understand the socio-demographic and behavioral characteristics of digital credit users, how they differ from non-users, and the impact of behaviorally-informed, non-standard disclosures on consumers' loan choices. The study employs a discrete choice experiment conducted online with 4,000 respondents, half nationally representative and half prospective digital credit borrowers. The choice task involves selecting the most preferred option from 9 hypothetical digital credit products, presented differently in treatment arms and a control group to evaluate the effect of disclosure format on consumer decision-making.