Institutional Cash Flow Synchronization
RCTReview
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.
Picture this
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.
What the evidence says
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.
- Who was studied
- 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).
- How
- Randomized controlled trial tracking weekly loan origination and disbursement timing alongside branch financial indicators.
What to do
Align employee task incentive cycles with institutional liquidity inflows to eliminate cash management friction and temporary borrowing costs.
From the source
"Credit repayment takes place mainly at the beginning of the month due to client behavior and institutionally-set payment patterns. However, credit disbursement was heavily occurring at the end of the month, when the loan officers put in more effort. This cash flow mismatch caused extra cash management costs safe values transportation, temporary funding sources, etc. - that could be avoided if loan officers completed their monthly tasks in a smoother way."
Fighting Procrastination in the Workplace- An Experiment.pdf