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Honours Academy student Koen Smeets: “In my opinion, an interdisciplinary approach is the best way to prepare students to tackle real-life challenges as COVID-19”

Date of news: 7 July 2020

“Two weeks ago I participated in one of the winning teams in a Hackathon organised by Massachusetts Institute of Technology (MIT). During a Hackathon, you group-up with several other experts to tackle a specific problem. My team consisted of (graduate) students from universities as MIT, Stanford, UNAM and LSE, a professor from FBA Business School and experts from companies as KPMG and BASF. The goal of this Hackathon was to help Latin America deal with the COVID-19 crisis. I was assigned to a track related to “Empowering the Informal Economy”: helping the many unregistered businesses of Latin America – who employ more than 50% of all workers - to deal with the COVID-19 crisis.

Koen SmeetsOur winning idea was to provide these informal businesses with loans while simultaneously incentivising them to become official businesses with digital instead of physical payments. It is impossible for these businesses to get loans at a normal bank since they cannot show whether they are a credible borrower. Amazingly, by analysing how you use your phone (such as the number of people you have regular contact with and the number of contacts you have) combined with how you fill in the digital loan-application Artificial Intelligence (AI) can assess how likely it is you will pay back your loan. The algorithms used by AI have become so good they can do this with just as much accuracy as a traditional bank officer!

What we add to this amazing technology is our idea to incentivise businesses to adopt devices which allow for digital payments, such as credit-card scanners. These scanners will give us better data allowing for better predictions, enables us to lower the interest rates paid by informal businesses on their loans. This would enable these businesses not only to digitalize but also to become official, formal businesses. Last weekend I also gave back to the MIT Community by being a Mentor in the MIT Lebanon Challenge, where I mentored in almost each track the first or second place.

We are currently speaking with several officials in the banking-, IT, and Financial Technology-sector in Latin America to implement our idea. Our goal is not only to help Latin American deal with the COVID-19 crisis but also for it to emerge from this crisis as a digitalized and formalized economy, a major goal of the economic literature.

Through the bachelor in Economics and Businesses Economics at Radboud University, I have gained the interdisciplinary- and research-skills which have enabled me to be in one of the winning teams of the MIT COVID-19 Challenge for Latin America. This education is “Economics+”, focusing on the psychological and sociological aspects of economics. In my opinion, such an interdisciplinary approach is the best way to prepare students to tackle real-life challenges as COVID-19.

The Honours Academy has enabled me to write a paper under senator and professor Esther-Mirjam Sent, where her guidance has enabled me to grow as both a critical researcher and an interdisciplinary economist. I am currently preparing this paper for publication, something which I would never have been able to do was it not for the Honours program! This year I am continuing with the Honours programme, writing under professor Ivan Boldyrev my Honours Thesis on the societal and economic consequences of (full) automation of the economy by Artificial Intelligence. It has also been possible through the Honours Programme for me to get into contact with professor Pim Haselager, a professor in Cognitive Neuroscience and AI. I can recommend all students of Radboud University to participate in the interdisciplinary Honours programs and those of their faculty.
If you would like to hear more about my idea, the economics programme at the Radboud University or the Honours Academy, feel free to contact me on LinkedIn.”