'Obesity Premium' in Loans, This Country Makes Borrowing Easier... "Interpreted as a Wealth Indicator"

Uganda, a Poorest Country, Gives Loan Preferences for Obesity
Submitting Obesity Photos Interpreted as Higher Creditworthiness
NYT: "In Poorest Countries, Obesity Signals Financial Stability"

A study has found that in Uganda, one of the poorest countries in the world, the fatter a person is, the easier it is for them to get a loan. This is because, in Uganda, where there is no system to accurately assess income, obesity is considered a 'symbol of wealth.'

On the 26th (local time), The New York Times (NYT) cited the research results conducted by a team led by Elisa Machi, a professor of economics at Brown University in the United States, in an article titled "In Poor Countries, Obesity Can Be Seen as a Signal of Financial Stability."

According to the NYT, the research team concluded that "loan officers in Uganda are more likely to provide loans to people who appear overweight."

[Image source=Pixabay]

The research team conducted an experiment with 238 loan officers at financial institutions in Kampala, the capital of Uganda. In Uganda, submitting documents with a photo is mandatory to apply for a loan. The research team created two loan applications using photos of the same person: one digitally altered to look slim and the other to look overweight, and submitted both separately.

As a result, when the photo showing obesity was attached, loan officers more often assessed the applicant's finances as healthier. Loan officers granted loans to applicants with a 'fat premium,' estimating their income to be more than 60% higher than it actually was. The NYT pointed out this loan culture in Uganda, stating, "It is not surprising that in a country where food is scarce, obesity becomes an important indicator of wealth."

However, the NYT and the research team noted that there is little correlation between actual income and body shape. Low-income groups tend to seek cheap and filling foods, with processed foods being a representative 'cost-effective' option. Ultimately, since low-income individuals who consume a lot of processed foods are more likely to be obese, there is no correlation between income and body shape.