Funded by IPA’s Consumer Protection Research Initiative and in partnership with IPA Mexico and Banco de México (Banxico), researchers are conducting a randomized evaluation to measure whether a centralized consumer credit application and comparison platform can improve the credit terms that consumers obtain and enhance overall consumer welfare. They are also conducting structured interviews with bank officials to understand how banks are adapting to the platform and how it affects their operations.

The Challenge

In low and middle-income countries, many consumers seeking credit face significant barriers to finding competitive loan terms. Obtaining accurate interest rate information typically requires applying to each lender individually, which is time-consuming and costly. Evidence suggests that online information about interest rates from banks and comparison websites is often inaccurate, forcing consumers to submit formal applications to receive a reliable quote.¹ These search costs lead borrowers to accept loan terms that may not be optimal for their financial circumstances. In Mexico specifically, consumers with access to multiple credit card offers allocate a large fraction of debt to high-interest products, incurring costs estimated at 31 percent above minimum available rates.²

The scale of the interest rate challenge facing consumers in Mexico has grown as household debt has increased, driven by lower-income households entering the formal credit market.³ This creates a significant policy need to develop interventions that can help consumers access more favorable loans, which would in turn alleviate constraints on the economy. However, a key question remains as to whether tools designed to increase market competition produce meaningful changes in consumer welfare.

The Evaluation

In partnership with IPA Mexico, researchers are conducting a randomized evaluation to measure whether Banxico’s consumer credit application and comparison platform improves credit terms and consumer welfare. The platform allows consumers to submit a single standardized application and receive binding credit offers from multiple banks simultaneously, enabling direct comparison before any commitment is made. This aims to reduce search costs, increase price transparency, and improve competitive pressure among lenders.

The intervention involves 6,000 consumers searching for credit cards. After completing a survey on demographics, income, prior credit history, financial knowledge, and behavioral characteristics, the consumers will be randomly assigned to one of two groups:

• Banxico’s platform: Consumers will be directed to Banxico’s comparison platform where they can view and compare personalized, binding offers from multiple banks
• Single-bank group (Comparison): Consumers will be directed to a randomly selected bank’s credit card application website

Researchers will measure individual-level credit card terms, spending, repayment behavior, and interest and fees paid over time. They will also examine how the platform affects different consumer groups, including first-time borrowers, informal workers, and lower-income consumers, to identify who benefits most from access to the platform.

In addition to the evaluation, researchers will conduct structured interviews with bank representatives to assess how banks are adapting to the platform’s introduction and how the platform affects their operations (such as loan decisions, prices, algorithms, and underwriting policies). The objective is to understand perceived benefits and challenges that might impact banks’ decisions to participate in the platform. Findings would enable Banxico to adapt the platform's design to reduce barriers to participation across institution types and design policies that offer a level playing field and promote competition.

Results

Results will be available in 2027.

Sources

^1. Berwart, Erik, Sean Higgins, Sheisha Kulkarni, and Santiago Truffa. Search and Negotiation with Biased Beliefs in Consumer Credit Markets. Tech. rep, 2025.

^2. Seira, Enrique, Alan Elizondo, and Eduardo Laguna-Müggenburg. "Are information disclosures effective? Evidence from the credit card market." American Economic Journal: Economic Policy 9, no. 1 (2017): 277-307.

^3. Giné, Xavier, and Rafael Keenan Mazer. "Financial (dis-) information: Evidence from a multi-country audit study." Journal of Public Economics 208 (2022): 104618.

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