Consumer Protection for Financial Inclusion in Low and Middle Income Countries: Bridging Regulator and Academic Perspectives

Global Poverty Research Lab Working Paper No. 20-110

When citing this paper, please use the following: Annual Review Financial Economics. 3, 2020: Submitted. DOI: 10.1146/annurev-financial-071020-012008

30 Pages Posted: 16 Dec 2020 Last revised: 2 Apr 2021

See all articles by Seth Garz

Seth Garz

Bill & Melinda Gates Foundation

Xavier Giné

World Bank - Development Research Group (DECRG)

Dean Karlan

Northwestern University

Rafe Mazer

Innovations for Poverty Action

Caitlin Sanford

Innovations for Poverty Action

Jonathan Zinman

Dartmouth College; Innovations for Poverty Action; Jameel Poverty Action Lab; National Bureau of Economic Research (NBER)

Multiple version iconThere are 3 versions of this paper

Date Written: March 2021

Abstract

Markets for consumer financial services are growing rapidly in low and middle income countries and being transformed by digital technologies and platforms. With growth and change come concerns about protecting consumers from firm exploitation due to imperfect information and contracting as well as from their own decision-making limitations. We seek to bridge regulator and academic perspectives on these underlying sources of harm and five potential problems that can result: high and hidden prices, overindebtedness, post-contract exploitation, fraud, and discrimination. These potential problems span product markets old and new, and could impact micro- and macroeconomies alike. Yet there is little consensus on how to define, diagnose, or treat them. Evidence-based consumer financial protection will require substantial advances in theory and especially empirics, and we outline key areas for future research.

Keywords: household finance, consumer protection

JEL Classification: D11, D12, D18, D81, D82, D83, D9, G21, K23, K31, K42, O12

Suggested Citation

Garz, Seth and Gine, Xavier and Karlan, Dean and Mazer, Rafe and Sanford, Caitlin and Zinman, Jonathan, Consumer Protection for Financial Inclusion in Low and Middle Income Countries: Bridging Regulator and Academic Perspectives (March 2021). Global Poverty Research Lab Working Paper No. 20-110, When citing this paper, please use the following: Annual Review Financial Economics. 3, 2020: Submitted. DOI: 10.1146/annurev-financial-071020-012008 , Available at SSRN: https://ssrn.com/abstract=3750236 or http://dx.doi.org/10.2139/ssrn.3750236

Seth Garz

Bill & Melinda Gates Foundation ( email )

500 5th Ave N
Seattle, WA 98109
United States

Xavier Gine

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

HOME PAGE: https://sites.google.com/site/decrgxaviergine/

Dean Karlan (Contact Author)

Northwestern University ( email )

2001 Sheridan Road
Evanston, IL 60208
United States

Rafe Mazer

Innovations for Poverty Action

Caitlin Sanford

Innovations for Poverty Action ( email )

1731 Connecticut Ave, 4th floor
New Haven, CT 20009
United States

Jonathan Zinman

Dartmouth College ( email )

Hanover, NH 03755
United States
603-646-0075 (Phone)

HOME PAGE: http://https://sites.dartmouth.edu/jzinman/

Innovations for Poverty Action

1731 Connecticut Ave, 4th floor
New Haven, CT 20009
United States

Jameel Poverty Action Lab

E60-246
77 Massachusetts Avenue
Cambridge, MA 02139
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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