UROP Research Mentor Project Submission Portal: Submission #974

Submission information
Submission Number: 974
Submission ID: 15516
Submission UUID: 9bfa9de4-88c0-4ac5-b85a-2715e1000d0b

Created: Tue, 08/27/2024 - 01:52 PM
Completed: Tue, 08/27/2024 - 02:17 PM
Changed: Fri, 09/20/2024 - 09:44 AM

Remote IP address: 217.180.196.43
Submitted by: Anonymous
Language: English

Is draft: No
Primary Research Mentor Name Paromita Sanyal
Research Mentor Preferred Pronouns she/her
When potential research assistants are reaching out via email, what is your preferred honorific? Prof.
Contact Email (FSU Email if affiliated) psanyal@fsu.edu
Position Title Faculty
FSU College (if applicable) Social Sciences and Public Policy
FSU Department or Non-FSU Organization Affiliation Sociology
Headshot (optional) Headshot_2023.jpeg
Research Assistant Supervisor (if different from above)
Research Assistant Supervisor Preferred Pronouns
Research Assistant Supervisor Preferred Honorific?
Contact Email (FSU Email if affiliated)
Name of Other Faculty/Collaborator(s) (if applicable)
Other Faculty/Collaborator(s) Preferred Pronouns
Other Faculty/Collaborator(s) Preferred Honorific?
Contact Email (FSU Email if affiliated)
Title of the Project Microfinance and Modern Technology: AI-enabled technologies used by MFIs and how they are experienced by product developers, lenders and borrowers
Project Keywords microfinance, inclusive finance, borrowing and lending, low-income borrowers, technology, artificial intelligence, credit scoring
Are you currently looking for research assistants? No
Number of Research Assistants Needed 1
Relevant Research Assistant Major(s) Open to all majors
Project Location: On FSU Main Campus
If the project location is off campus, does the research assistant(s) need to provide their own transportation?
Please select the choice that most accurately describes your expectations for the research assistant(s): Partially Remote
Approximately how many hours a week would the research assistant(s) need to work? 10
Roughly what time frame do you expect research assistant(s) to work? Flexible schedule (Combination of business and outside of business. TBD between student and research mentor.)
Overall Research Project Description The use of modern technologies has percolated to the microfinance industry, and, with this, microfinance is transitioning from being tie-oriented to also being technology-oriented. Researchers have noted that AI-enabled decision systems and rapid technological advancements are transforming the microfinance industry, which used to be exclusively relationship-oriented (Koefer, Lemken, and Pauls 2023). Microfinance firms are actively investing in AI-enabled tools to help them achieve their goals of giving loans to marginalized groups without access to conventional banking, expanding their borrower base, while reducing risk of defaults and fraudulent transactions, reducing costs, and maintaining profitability (Mondol et al. 2024). For instance, some microfinance institutions use credit-scoring systems for risk-based pricing of loans. These systems use a variety of data analyzed by AI-powered machine-learning (machine sets the rule) to generate a single metric based to determine creditworthiness of borrowers (Anderson 2007; Finlay 2012; Gunnarson et al. 2021). There are MFIs that are using AI-enabled classification-based algorithms trained on non-traditional data to evaluate the lending risk of customers. The data used for building these models are sourced from social media engagement, mobile phone data (phone manufacturer and recharging history), bill payment data, and location data (cite). Then there is MobiScore, a scoring model trained with mobile network usage data that is used for estimating the financial risk of borrowers (San Pedro et al. 2015). Sociologists have begun studying the human implications of credit scoring and tracking (DeVille 2019; Fourcade and Healy 2013; Wherry 2019; Wherry, Seefeldt, and Alvarez 2019).
FinTechs are developing technological products aimed at taking advantage of ever more comprehensive databases and complex algorithms to predict default risk, which is critical for maintaining profitability (Johnson 2019). Fairness and social welfare have always been important concerns for microfinance lending. These concerns become even more critical since the use of AI-driven modern technologies and the operation of FinTech firms raise issues regarding unwanted bias in lending practices and its social welfare consequences (Johnson 2019). Another important goal of microfinance is the inclusion and empowerment of women for achieving gender equity in access to economic resources and in the household. This goal can be impacted by fintechs and the inclusive finance sector adopting AI, as has been shown in African countries (Ahmed 2021). If the use of AI-driven technology is mismanaged in microfinance, this “inclusive finance” model may end up excluding those that need it the most. ...
It is therefore timely to propose an exploratory investigation of the use of AI-enabled technologies in the microfinance industry in India. India tops other South Asia countries in poverty - 13% of its population lives in poverty as of 2021 (World Bank Poverty and Inequality Platform). Notably, India is also in the top position globally as the largest microfinance market and one of the fastest growing FinTech markets.
Microfinance in India includes the federal and state governments as dominant players with their women’s Self-Help Group (SHG) based delivery of microfinance (financed by nationalized banks) in pursuit of the social welfare goals of reducing poverty and women’s empowerment. There is also a plethora of commercialized MFIs, non-banking financial companies (NBFCs), small finance banks (SFBs), and large private banks, such as Bandhan and HSBC, offering microfinance services to rural and urban citizens. The total number of loans disbursed by MFIs in India is reported to be 205 lakhs (JAS’23). 41% of the microfinance market share (in terms of loans disbursed and portfolio outstanding) is in the hands of Non-Banking Financial Companies specializing in Microfinance (NBFC-MFIs). Overall, today, microfinance has become an important source of credit for millions of economically marginalized people in India to meet their credit needs. For many of them microfinance loans are their only alternative to borrowing from family and friends, where personal dignity is put on the line, and from moneylenders, where there is the lurking possibility of exploitation and violence. ...
My proposed project will examine how new technologies are being developed and diffused in the inclusive finance sector in India, with a special focus on the microfinance industry. It will aim to understand the logics and rationalities fueling these technologies, their modalities of operation and outcomes, how they translate to borrower screening and authentication practices, and how individuals interact with new financial technologies and systems of financial knowledge. It will explore new concerns the use of technology in microfinance presents, especially from the lens of its social welfare goals and given that the developers and industry operators are at a far remove from their low-income clientele. For instance, fairness-related concerns of developers, lenders, and borrowers that may be emerging will be an important thing to investigate. It will examine if these technological transformations in microfinance are fostering the development of new subjectivities among product developers, lenders, lending agents, and borrowers. Finally, it will explore the gendered ramifications of technology in microfinance, where most borrowers in India are women. The project will be an exploratory study, pursuing these questions in an open-ended manner, attentive to finding new information, and aimed at establishing foundational knowledge of this phenomenon. Exploratory studies are best suited for studying emergent phenomenon for which established knowledge is lacking, making the conventional hypothesis-testing model of research less appropriate.
Research Tasks Literature gathering and review. The end product will be an annotated bibliography of a Reference list I will provide and adding to that reference list through searches conducted on WebofScience/ ResearchRabbit/ Google Scholar. This literature review will lead into developing a full research proposal that will be submitted for grants and executed in the next 3-5 years.
Skills that research assistant(s) may need: Excellent reading, comprehending, and writing skills. Good literature mining skills and the ability to search with WebofScience and ResearchRabbit. I will offer instruction on how to do it and expect the RA to be an enthusiastic learner.
Mentoring Philosophy I will seek to understand the mentees goals and explain the value of the task they are conducting and how that integrates with their goals (i.e. building critical research skills).
Please provide a link to your publications, a video clip, or a website for your research project (if applicable): https://cosspp.fsu.edu/sociology/faculty/paromita-sanyal/
Please add any additional information here (if applicable): https://blogs.worldbank.org/en/developmenttalk/oral-democracy
Are you interested in participating in the UROP Research Mentor Roundtable? Yes
Roundtable times and Zoom links Wednesday, September 4, 1-1:30 pm, https://fsu.zoom.us/j/94125193736
Thursday, September 5, 1-1:30 pm, https://fsu.zoom.us/j/94125193736
Roundtable Info
Mentor Handbook, FAQs, and Communication Yes
UROP Performance Evaluation Yes
Materials Grant Yes
UROP Poster Presentation Yes
Year 2024
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