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

Jayshree Venkatesan

Senior Research Director, Consumer Protection & Responsible Finance

Jayshree leads research on fintechs, platforms, and other DFS providers to understand their incentives, practices, and how/if they serve low-income consumers and contribute to advocacy on consumer protection and other policy priorities for inclusive finance and co-leads the development of influence strategies and campaigns with the communications team.

Jayshree joins CFI after working for eight years as an independent global consultant to several partners including CGAP, World Bank, JICA, and ITAD. As a consultant, Jayshree worked on customer-centric business models and challenges faced by customers in accessing and using financial services. From 2009 to 2013, she was part of the founding team at IFMR Trust (now Dvara Trust), where she led a mezzanine fund that invested in microfinance institutions in India.

Jayshree is a senior policy fellow at the Leir Institute housed within the Fletcher School of Law and Diplomacy where she works on challenges faced by vulnerable segments such as migrants/refugees in accessing financial services. In 2014, Jayshree was awarded the Chevening fellowship for leadership by the Foreign and Commonwealth Office, UK. Jayshree earned an MA in international relations from the Fletcher School of Law and Diplomacy, an MBA from MDI Gurgaon (India), and a Bachelor’s in mathematics from Mumbai University, graduating at the top of her class.

Rafe Mazer

Director, Fair Finance Consulting

Rafe Mazer is a leading global voice on consumer protection and competition policy in digital financial services and the digital economy. For 15 years, Rafe has brought the consumer’s perspective to product design and policymaking with governments and financial service providers in countries across Africa, Asia, and Latin America. As the first Director of IPA’s Consumer Protection Research Initiative from 2019-2022, Rafe developed a portfolio of more than 20 consumer protection research projects addressing digital consumer credit, pricing transparency, fraud in digital app stores, and other emerging risks in digital economies. Prior to his time at IPA, Rafe was the director of a Kenyan consulting firm specializing in consumer protection policy, and before that led CGAP’s work on consumer protection and behavioral research for 7+ years.

A talented researcher and writer, Rafe has designed and executed field research including surveys, mystery shopping, behavioral experiments, and randomized impact evaluations, as well as policy analysis and regulatory reforms. Rafe’s current work includes supporting the expansion of open finance models in emerging markets and the development of continental competition policy for digital markets in Africa. Rafe is currently Director of Fair Finance Consulting, which provides consumer protection and competition policy expertise to a wide range of clients and partners globally.

Colin Rice

Senior Research Specialist

Colin joins CFI as a research specialist with a background in project design, monitoring and evaluation, and social performance management. He supports research projects as well as the implementation of data collection, management, review, and presentation; drafting blog posts and reports; planning events and workshops, among other things.

Colin previously worked as the social performance manager at Small Enterprise Foundation, the largest MFI in South Africa, where he led a team responsible for gathering and analyzing insights on client progress, satisfaction, and challenges. He also reviewed and developed the organization’s social performance practices, in addition to working on the design, monitoring, and evaluation of financial education and savings projects.

Prior to that, Colin spent time developing M&E tools for BancoSol in Bolivia, consulted with nonprofits and family philanthropic foundations in the DC area to strengthen internal operations, and was an intern on the Bankers without Borders team at Grameen Foundation.

Colin has a master’s degree in social enterprise from American University: School of International Service and a bachelor’s degree in anthropology from Sewanee.

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