Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/336543 
Year of Publication: 
2025
Series/Report no.: 
ADB Economics Working Paper Series No. 831
Publisher: 
Asian Development Bank (ADB), Manila
Abstract: 
In much of Asia, small and medium-sized enterprises that are owned or led by women (WSMEs) face more difficulties accessing credit than those owned or led by men. This raises the question of how to change employee behavior within lending institutions to extend credit to WSME borrowers. There is little empirical evidence on incentive effectiveness from high-stakes, field experimental settings with workers completing complex, open-ended tasks. In collaboration with a leading Vietnamese commercial bank, we evaluate the impact of two incentives for lending agents to increase recruitment of WSMEs as new borrowing clients. A total of 50 bank branches employing hundreds of lending staff are randomly assigned to one of the following treatments for 6 months: (i) a monthly multi-category contest; (ii) piece-rate incentives; or (iii) control. We find that, while any treatment increases new WSME lending by 40%, the contest, in particular, causes an increase in new WSME lending of 58%, with stronger effects among female lending agents and in urban branches. This does not induce strategic reductions in loan size, displace lending to comparable non-WSMEs, or cause lower loan quality (higher delinquency). This suggests there is room for expanded financial incentives for lending agents to extend credit to underserved groups without loss of other business.
Subjects: 
WSME finance
banking
incentive design
financial inclusion
randomized controlled trial
Viet Nam
JEL: 
O16
G21
J16
O12
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Working Paper

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