Dangers of a double-bottom line? A poverty targeting experiment misses both targets
Dean Karlan, Adam Osman, and Jonathan Zinman
Two for-profit Philippine banks, aiming to increasing microlending to the poor, incorporated a widely used poverty measurement tool into their loan applications and tested the tool using randomized training content. The strategy backfired, leading to no additional poor applicants and potentially lower-performing loans. This cautionary tale is an example of why management may want include social outcomes directly into employee performance evaluations, or silo corporate social responsibility efforts from core operations.
Two for-profit Philippine banks, aiming to increasing microlending to the poor, incorporated a widely used poverty measurement tool into their loan applications and tested the tool using randomized training content. The strategy backfired, leading to no additional poor applicants and potentially lower-performing loans. This cautionary tale is an example of why management may want include social outcomes directly into employee performance evaluations, or silo corporate social responsibility efforts from core operations.