42 KEEPING PATHS TO CREDIT OPEN Access to credit is a critical resource for borrowers and can produce significant benefits—from job retention to higher incomes. Yet according to a  national survey in 2015, 35 percent of Mexicans reported the rejection of a loan application due to low credit scores. Nearly 30 percent of people scored 660 or below, the cut-off point at which a borrower is seen as a medium to high risk of non-repayment. A major factor in low credit scores is late loan payments. So in our effort to keep paths to credit open, we spoke with clients of kubo.financiero, the first regulated peer-to- peer online lending platform in Mexico, to learn what gets in the way of on-time payments. One barrier we found is simply that few people had actually thought through how they would pay back their loan. Many had financial goals but no clear plan, making those goals much less likely to be achieved. Another obstacle is borrowers’ tendency to focus on short- rather than long-term consequences. Although most people were aware of the immediate costs of missing a payment (e.g., late fees), almost no one we interviewed mentioned the damage to their credit score or the greater likelihood that they might be denied a loan—or pay higher interest for it—in the future. When both the plan for repaying and the consequences of failing to do so remain vague in people’s minds, the likelihood of loan delinquency increases significantly. We are developing tailored solutions to address these issues. We will provide timely reminders to make the long-term consequences of late payments clearer to the borrower. We will also send feedback, either congratulating them for paying on time or notifying them that they incurred a fee, and help clients create a plan for paying on time moving forward. The plans will include elements of positive motivation, encouraging clients to set themselves on the path towards the better, lower-cost loans that a better credit score makes possible. REDESIGNING RETIREMENT SAVINGS In Mexico,  27 percent  of the elderly population lives in poverty. Although the country has a national pension system for its citizens, it only applies to those with formal employment (about 40 percent of the population). And the average worker making the mandatory contribution can, optimistically, expect to receive less than 40 percent of his or her salary upon retirement. To live comfortably in retirement, people must supplement these pensions by making additional voluntary contributions to their account—but few people take this step. In fact, less than one percent of all active account holders contribute each year. Thereasonsforthisproblembecomemoreapparentwhen you look at the matter through a behavioral lens—that is, from the perspective of how people actually behave in the realworldasopposedtohowwethinkthey should behave in some hypothetical, purely rational world. Most people, especiallywhenontightincomes,aretoobusyresponding to real financial pressures now to devote much time or energy to addressing potential ones in the future. Those future potential scenarios are unclear as well as distant, making them doubly hard to plan for. People also tend to judge how they’re doing by comparing themselves to others, and to base that comparison on visual cues— things they can actually see. If you see that your neighbor has a new car or an expensive watch, for example, you may feel you need the same in order to keep up, even though your neighbor’s retirement savings balance, which you cannot see, would provide a much more meaningful indicator of financial health than the new car or expensive watch that you can. These are behavioral barriers to retirement savings and behavioral design can help address them. To that end, we worked with CONSAR, the Mexican government’s retirement agency, and about 10 Afores, which are companies authorized to manage individual retirement accounts. Our goal was to design and implement interventions aimed at helping workers bridge the gap between intending to save and actually doing it. In May of 2016, we redesigned the quarterly retirement statements that are sent to tens of millions of account holders across the country. The new statements, tested in a randomized controlled trial among more than 120,000 account holders, included a graphic savings “thermometer” to give recipients real-time visual cues about their retirement readiness. The statements leveraged intuitive graphics, personalized rules-of-thumb and easy-to-follow action steps for reaching savings