This blog was originally posted on the USAID Microlinks Blog after Aishwarya Ratan's presentation at their After Hours Seminar #61, "Matching Products with Preferences: Innovations in Commitment Savings for the Poor."
Without a national system to track identity, lenders in developing nations are challenged by identity fraud, rendering the establishment of credit bureaus near impossible.
Biometric technology such as using computers to track identity with fingerprints may be a possible solution. Xavier Giné, Jessica Goldberg, and Dean Yang’s research explores the use of fingerprinting in Malawi as a method of repayment tracking and loan enforcement. Check out the study summary here.
Last week Melinda Gates announced new funding of $500 million for micro-savings services in the developing world. In her speech she cited research being conducted by IPA on commitment savings accounts in Malawi. These accounts have had huge huge impacts, increasing bank deposits, farm investments, and ultimately consumption.