In Simple Words
Think of a restaurant where all customers pay for their meals at lunch, but the kitchen buys all its groceries at midnight. Spreading out food purchases across the day matches incoming cash with outgoing expenses, eliminating the need to borrow money or pay for late-night emergency deliveries.
Bank branches in Colombia
- Usual bank practice
- Comparison group
- Madrugador program
- More new loans in weeks 1 and 2
February–April 2009, after managers joined the program. New-loan sourcing shifted to weeks 1 and 2, p below 0.10; no clear monthly total gain. Manager involvement was not separately randomized.
See source →Research question
Temporal asymmetry between early-month loan repayments by clients and end-of-month loan disbursements driven by procrastinating officers forces financial institutions into costly temporary funding and cash transport logistics.
Participants
N = 61 bank branches in Colombia managing ~$160 million in loans across ~180,000 micro-business clients (56 branches disbursed >50% of loans in weeks 3–4 at baseline).
Study Design
Randomized controlled trial tracking weekly loan origination and disbursement timing alongside branch financial indicators.
Results
Pre-treatment loan disbursement was heavily skewed (only 15% in week 1 vs 32% in week 4 across 56 of 61 branches); the intervention drove an 18% increase in new loan origination in weeks 1–2 (p < 0.10) and smoothed loan disbursements toward the target distribution (35% week 1, 25% week 2), eliminating cash flow mismatch and associated transportation/funding costs.
Takeaway
Align employee task incentive cycles with institutional liquidity inflows to eliminate cash management friction and temporary borrowing costs.
Source and citation
See source →Read alongside the research
Plain-English glossary
Original explanations, informed by the references below. Examples are illustrations, not data from the studies above. The research text stays unchanged.
- Baseline
The starting measurements in a study. Researchers use these to compare what participants were like at the start with what happens later.
ExampleBefore a training programme starts, researchers measure workers’ earnings. That first measurement is the baseline.
GET-IT glossary · Baseline characteristics ↗Read more about baseline →- Randomized controlled trial
A study that uses chance, like drawing lots, to decide who receives each option being compared. Researchers compare the groups’ outcomes to estimate the effect of those options.
ExampleA lottery assigns volunteers to a training programme or a comparison group. Researchers then compare their outcomes.
GET-IT glossary · Randomized study ↗Read more about randomized controlled trial →