repayment of their loan by April 1, 2022, even with perfect repayment, and this resulted in a potential experimental sample of 45,605 borrowers.

We worked with the lender to randomly assign customers in the sample frame to one of the debt forbearance offer or control treatments. Professional customer service representatives from the lender’s call center then attempted to reach customers on an assigned list to extend a debt forbearance offer or deliver one of the control scripts. Each customer service representative was given a randomly assigned script and list of customers to contact at the beginning of each work day. The customer service representatives made up to four call attempts for each customer in the sample, and only customers who could be reached using this protocol are included in our balance tests and estimation sample. Out of the 45,605 potential experimental borrowers, the effective estimation sample includes 9,623 borrowers that were successfully contacted over the course of the experiment. The sample includes customers from 26 states of mainland India (see Figure 2). Call recordings were audited throughout the study to ensure that the lender’s customer service representatives followed the experimental protocol and assigned scripts. In total, 16 customer service representatives made an average of 122 call attempts per day for a total of 88 days over the course of the experiment.

# **3.3 Treatment Conditions**

Borrowers in the sample were randomly and individually assigned to one of four treatment conditions, which included two variations of a debt forbearance offer, one placebo treatment and one control condition. The two debt forbearance offers extended in the experiment are identical in all terms and conditions but vary whether the offer is presented as an initiative of the lender or the regulator. The remaining treatments shed light on alternative mechanisms and allow us to benchmark the impacts of temporary debt forbearance against standard repayment reminders and debt enforcement.

## **3.3.1 Debt forbearance: relationship offer**

The first of our two debt forbearance treatment conditions offered customers a three-month payment deferral on their loan that was framed as an initiative of the lender. In total, 1,901 of the contacted borrowers were assigned to this treatment, which presented the offer as follows: _At [lender name], we care about our customers and truly value your business. We understand that people all over India are facing great hardships due to the current economic situation. Helping our valued customers in these challenging times is our first priority at [lender name]. That is why we are offering you repayment flexibility on your loan._ Borrowers assigned to this treatment were then informed about the terms of the offer and asked if they would like to enrol in the debt forbearance program, which required payment of a small one-time processing fee of Rs 350 through the lender’s payment portal. Borrowers who accepted the offer were provided with additional information about the terms and conditions of the forbearance program as part of the sign-up process. To understand how sensitive take-up of the offer is to price, we assigned 177 contacted borrowers to receive the relationship offer with a higher processing fee of Rs 500.<sup>14</sup> 14 For the mean loan, this processing fee is equivalent to an internal rate of return (IRR) of 19 percent, making it a cheaper 10