# **3.** **<u>Data</u>**

We draw on several data sources. First, we use self-reported data (on household and business characteristics) collected by credit officers at the time of the loan application. Second, we use administrative data with loan characteristics and client repayment histories for all study loans. The data cover 100% of clients from loan disbursement until three months past loan maturity (and 99.3% until 12 months past maturity), with loan maturity accounting for extensions due to passes. The data span 49 months from when the first loans were disbursed until 30 months after the last set of loans were disbursed.

Third, the lender conducted client satisfaction phone surveys on a subsample of study clients. The lender’s staff called both standard and flexible loan clients to assess client attitudes towards their loan product, their level of knowledge about the product’s features, and the reasons for pass use among clients who had used them. Respondents were chosen randomly from the pool of clients every month over 18 months, stratifying each month by credit officer and loan type.<sup>5</sup> In total, 575 phone surveys were completed for 457 different clients, representing 18% of all clients in the study sample. Phone surveys were made on average six months after loan disbursement.

Lastly, we conducted an in-person follow-up survey. This survey was brief (median survey duration was 34 minutes) and took place at clients’ businesses or homes around ten months (sd=2 months) after the loan disbursement. Since loans were disbursed over time, the survey was conducted on a rolling basis to ensure comparable duration post loan disbursement. Respondents were asked about loan repayment behavior and a set of business and household outcomes. We achieved a response rate of only 69%, we fail to reject a difference in levels across experimental arms (69% response rate for both treatment and control groups) and we fail to reject compositional differences in who is reached (p-value of 0.67 for the pooled treatment and 0.65 and 0.14 for a specification that separately tests compositional selection by the two treatment arms Flex→Flex and Standard→Flex; see Appendix Table 5 for full results).<sup>6</sup> Appendix Figure 1 summarizes the timeline of the experiment and related data collection.

# **4.** **<u>Results</u>**

# **Take-up**

Figure 1 reports that the 6,685 standard loan offers led to 1,893 disbursed loans (28%) while the 1,925 flexible loan offers led to 582 disbursements (30%). Panel B of Appendix Table 3 shows that the difference in disbursement rates by type of credit offers is not statistically significant (p-value is 0.53). Among applicants, a negative credit assessment was the most common reason for a loan not being disbursed.

> 5 The target sampling rate was initially set to 20% of clients for the first three months of the experiment and later lowered to 5%, subject to a minimum of two calls in each offer-loan type combination in a given month.

> 6 Locating clients in the urban setting of this study was difficult. Clients frequently move the location of the business or place of residence and immediate neighbors are not always willing to provide information about clients’ whereabouts. A team of enumerators continually rotated through the different neighborhoods with a list of target respondents and attempted phone contacts to schedule interviews.