Gender Differences in Reactions to Fintech Loan Collection Mechanisms: A Large-Scale Natural Field Experiment

Abstract

We study gender differences in on-time loan payment responsiveness to enforcement mechanisms using randomized dunning text messages to 17,545 borrowers from a FinTech lending platform. Reminder messages effectively reduce overdue rates compared to the control scenario where borrowers receive no messages, and messages incorporating social or financial incentives demonstrate greater effectiveness in lowering overdue rates. Notably, women are more responsive to social pressure, while men are more sensitive to financial incentives. These results are robust to observable control variables and matching methods. Heterogeneity analyses show that the gender differences in responsiveness to financial incentives are more pronounced for employed borrowers and those with better credit scores. Mechanism analyses suggest that endorser selection explains gender differences in social incentive treatment, but financial incentive amounts cannot explain gender differences in financial incentive treatment. These findings inform practitioners and policymakers that some seemingly gender-neutral practices may create unintended gender disparities in financial markets.

Keywords: Gender Differences, Natural Field Experiment, FinTech

JEL Classification: C93, D91, J16