In this report, we explore how strategically adding friction to digital financial services can benefit both lenders and borrowers. From our review of various financial and non-financial case studies, we find that there are clear linkages between inserting positive friction into the design of financial products and delivery models and consumer protection. While we know that financial service providers, investors, and policymakers can better utilize positive friction to create responsible digital credit solutions, there is still a need for further testing of positive friction concepts in real-world environments.
This report was developed in partnership with USAID Digital and DAI Global.
Authors