Take-up and Impact of Digital Repayment in Microfinance

This experimental study intends to evaluate the desire of BRAC Uganda Bank Limited’s clients for and effects of digital repayment via mobile money. It will implement a digital repayment system that microfinance clients will be able to use. The study hypothesizes that many individuals will wish to repay loans digitally. The expected results are: (i) for those who would have chosen to repay digitally, their outcomes to improve; (ii) for those who would not have chosen to repay digitally, their outcomes may worsen.

Researchers: Dr Frederico S. Finan; Dr Isabelle Cohen; and Denise Ferris

Partners: BRAC-CEGA Learning Collaborative

Timeline: 2019–2022

Status: Ongoing

Contact: Denise Ferris


Digital technology is rapidly emerging as integral to the future of development policy, and particularly to financial services. Recent years have seen rapid digitization in developing countries, from mobile money platforms to biometric smart cards. These innovations are largely perceived as beneficial, saving users on both sides of the transaction effort and time, and often enabling better monitoring. The use of mobile money to streamline payments is only becoming more commonplace. Despite this, relatively little is known about the effects of switching to mobile money on microfinance. This study investigates the desire for digital repayment among microfinance clients, and the impact of digital repayment on the microfinance model. The main strategy of this intervention is to allow for digital repayment of BRAC Uganda Bank Limited’s microfinance loans by implementing a digital repayment system.

Research Questions 

  1. Do microfinance clients wish to repay loans digitally?
  2. How does switching from cash to digital repayment affect group and individual loan performance, client outcomes, and the decision to continue with BRAC microfinance?


This experimental study will use a questionnaire for all BRAC Uganda Bank Limited’s clients and microfinance administrative data to evaluate the desire for and effects of digital repayment via mobile money on microfinance. The study population will be microfinance group members and associated clients from 600 microfinance groups in Central Uganda.


Study ongoing.