Every loan request tells a story.Beyond asking for money, borrowers explain why the venture matters, who they are, and why a distant lender should believe in them.In crowdfunded microlending, these stories help entrepreneurs become relatable.But a persuasive story is not always a reliable signal.Across hundreds of thousands of Kiva loan narratives, using an LLM-assisted approach we find that language describing entrepreneurs' motivational values helps entrepreneurs attract funding.When borrowers frame their goals around family, community, achievement, stability, or new opportunity, lenders respond: loans are more likely to be funded, and funded faster.Yet these valuebased signals do not all predict repayment in the same way.Narratives expressing concern for others and openness to change are associated with lower delinquency, while narratives emphasizing personal advancement or stability are associated with higher delinquency.The practical message is clear: do not treat all purposeful stories as equally informative.Entrepreneurs should explain why their ventures matter, but platforms and lenders should ask a sharper question: what kind of motivation is being communicated, and what does it reveal about future follow-through?For platforms, this means moving beyond narrative appeal alone.Borrower stories can help mobilize capital, but they can also support better assessment and risk monitoring.For lenders, it means reading for more than inspiration.The most compelling story may get attention; the most diagnostic story may reveal who is likely to repay.
Singh et al. (Fri,) studied this question.
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