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Mitigating Bias in Online Microfinance Platforms: A Case Study on Kiva.org

  • Conference paper
  • First Online:
ECML PKDD 2020 Workshops (ECML PKDD 2020)

Part of the book series: Communications in Computer and Information Science ((CCIS,volume 1323))

Abstract

Over the last couple of decades in the lending industry, financial disintermediation has occurred on a global scale. Traditionally, even for small supply of funds, banks would act as the conduit between the funds and the borrowers. It has now been possible to overcome some of the obstacles associated with such supply of funds with the advent of online platforms like Kiva, Prosper, LendingClub. Kiva, in particular, allows lenders to fund projects in different sectors through group or individual funding. Traditional research studies have investigated various factors behind lender preferences purely from the perspective of loan attributes and only until recently have some cross-country cultural preferences been investigated. In this paper, we investigate lender perceptions of economic factors of the borrower countries in relation to their preferences towards loans associated with different sectors. We find that the influence from economic factors and loan attributes can have substantially different roles to play for different sectors in achieving faster funding. We formally investigate and quantify the hidden biases prevalent in different loan sectors using recent tools from causal inference and regression models that rely on Bayesian variable selection methods. We then extend these models to incorporate fairness constraints based on our empirical analysis.

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Notes

  1. 1.

    http://www.kiva.org.

  2. 2.

    https://bit.ly/2LF9Mpp.

  3. 3.

    https://www.kiva.org/build/data-snapshots.

  4. 4.

    https://pages.kiva.org/blog/new-kiva-feature-currency-risk-protection.

  5. 5.

    https://bit.ly/2TnqhL7.

  6. 6.

    Appendix to the manuscript can be accessed here.

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Authors and Affiliations

  1. Arizona State University, Tempe, USA

    Soumajyoti Sarkar & Hamidreza Alvari

Authors
  1. Soumajyoti Sarkar
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  2. Hamidreza Alvari
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Corresponding author

Correspondence to Soumajyoti Sarkar .

Editor information

Editors and Affiliations

  1. University of Sydney, Sydney, NSW, Australia

    Irena Koprinska

  2. Monash University, Clayton, VIC, Australia

    Michael Kamp

  3. University of Bari Aldo Moro, Bari, Italy

    Annalisa Appice

  4. University of Bari Aldo Moro, Bari, Italy

    Corrado Loglisci

  5. University of Guelph, Guelph, ON, Canada

    Luiza Antonie

  6. University of Caen Normandy, Caen, France

    Albrecht Zimmermann

  7. University of Pisa, Pisa, Italy

    Riccardo Guidotti

  8. Norwegian University of Science and Technology, Trondheim, Norway

    Özlem Özgöbek

  9. University of Porto, Porto, Portugal

    Rita P. Ribeiro

  10. UPC BarcelonaTech, Barcelona, Spain

    Ricard Gavaldà

  11. University of Porto, Porto, Portugal

    João Gama

  12. Fraunhofer IAIS, St. Augustin, Germany

    Linara Adilova

  13. Royal Holloway University of London, Egham, UK

    Yamuna Krishnamurthy

  14. University of Lisbon, Lisbon, Portugal

    Pedro M. Ferreira

  15. University of Bari Aldo Moro, Bari, Italy

    Donato Malerba

  16. University of Lisbon, Lisbon, Portugal

    Ibéria Medeiros

  17. University of Bari Aldo Moro, Bari, Italy

    Michelangelo Ceci

  18. ICAR-CNR, Rende, Italy

    Giuseppe Manco

  19. University of Naples Federico II, Naples, Italy

    Elio Masciari

  20. University of North Carolina, Charlotte, NC, USA

    Zbigniew W. Ras

  21. Australian National University, Canberra, ACT, Australia

    Peter Christen

  22. Leibniz University Hannover, Hannover, Germany

    Eirini Ntoutsi

  23. Technical University of Dortmund, Dortmund, Germany

    Erich Schubert

  24. University of Southern Denmark, Odense, Denmark

    Arthur Zimek

  25. University of Pisa, Pisa, Italy

    Anna Monreale

  26. Warsaw University of Technology, Warsaw, Poland

    Przemyslaw Biecek

  27. ISTI-CNR, PISA, Italy

    Salvatore Rinzivillo

  28. Berlin Institute of Technology, Berlin, Germany

    Benjamin Kille

  29. Berlin Institute of Technology, Berlin, Germany

    Andreas Lommatzsch

  30. Norwegian University of Science and Technology, Trondheim, Norway

    Jon Atle Gulla

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Sarkar, S., Alvari, H. (2020). Mitigating Bias in Online Microfinance Platforms: A Case Study on Kiva.org. In: Koprinska, I., et al. ECML PKDD 2020 Workshops. ECML PKDD 2020. Communications in Computer and Information Science, vol 1323. Springer, Cham. https://doi.org/10.1007/978-3-030-65965-3_6

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  • DOI: https://doi.org/10.1007/978-3-030-65965-3_6

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  • Publisher Name: Springer, Cham

  • Print ISBN: 978-3-030-65964-6

  • Online ISBN: 978-3-030-65965-3

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