IDEAS home Printed from https://ideas.repec.org/p/csr/wpaper/1019.html
   My bibliography  Save this paper

Are Women “Naturally” Better Credit Risks in Microcredit? Evidence from Field Experiments in Patriarchal and Matrilineal Societies in Bangladesh

Author

Listed:
  • Sugato Chakravarty

    (Purdue University)

  • S. M. Zahid Iqbal

    (Purdue University)

  • Abu Zafar M. Shahriar

    (Monash University)

Abstract

We use controlled experiments to identify the proximal causes of gender differences in the repayment of microcredit. We recruit male and female subjects from a patriarchal and a matrilineal community in Bangladesh, who live in the same villages, and find that the female subjects have a greater willingness to repay microcredit in every society irrespective of the type of loan. Thus, the observed gender differences in the repayment of microcredit cannot be explained by the different roles that women play in different societies. In other words, women are “naturally” better credit risks than men in microcredit. We confirm that our results are not driven by the common culture and values among our subjects that stem from geographical proximity.

Suggested Citation

  • Sugato Chakravarty & S. M. Zahid Iqbal & Abu Zafar M. Shahriar, 2013. "Are Women “Naturally” Better Credit Risks in Microcredit? Evidence from Field Experiments in Patriarchal and Matrilineal Societies in Bangladesh," Working Papers 1019, Purdue University, Department of Consumer Sciences.
    • Handle: RePEc:csr:wpaper:1019
    as

    Download full text from publisher

    File URL: ftp://128.210.123.107/csr/wpaper/07_December_2013_Gender_Draft.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Uri Gneezy & Kenneth L. Leonard & John A. List, 2009. "Gender Differences in Competition: Evidence From a Matrilineal and a Patriarchal Society," Econometrica, Econometric Society, vol. 77(5), pages 1637-1664, September.
    2. Graeme D. Ruxton, 2006. "The unequal variance t-test is an underused alternative to Student's t-test and the Mann--Whitney U test," Behavioral Ecology, International Society for Behavioral Ecology, vol. 17(4), pages 688-690, July.
    3. Robert Fairlie & Alicia Robb, 2009. "Gender differences in business performance: evidence from the Characteristics of Business Owners survey," Small Business Economics, Springer, vol. 33(4), pages 375-395, December.
    4. Steffen Andersen & Seda Ertac & Uri Gneezy & John A. List & Sandra Maximiano, 2013. "Gender, Competitiveness, and Socialization at a Young Age: Evidence From a Matrilineal and a Patriarchal Society," The Review of Economics and Statistics, MIT Press, vol. 95(4), pages 1438-1443, October.
    5. Baland, Jean-Marie & Gangadharan, Lata & Maitra, Pushkar & Somanathan, Rohini, 2017. "Repayment and exclusion in a microfinance experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 137(C), pages 176-190.
    6. Dean S. Karlan, 2005. "Using Experimental Economics to Measure Social Capital and Predict Financial Decisions," American Economic Review, American Economic Association, vol. 95(5), pages 1688-1699, December.
    7. Alessandra Cassar & Luke Crowley & Bruce Wydick, 2007. "The effect of social capital on group loan repayment: evidence from field experiments," Economic Journal, Royal Economic Society, vol. 117(517), pages 85-106, February.
    8. repec:pri:rpdevs:gamespaper.pdf is not listed on IDEAS
    9. Hossain, Mahabub, 1988. "Credit for alleviation of rural poverty: the Grameen Bank in Bangladesh," Research reports 65, International Food Policy Research Institute (IFPRI).
    10. D’Espallier, Bert & Guérin, Isabelle & Mersland, Roy, 2011. "Women and Repayment in Microfinance: A Global Analysis," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 39(5), pages 758-772.
    11. Lee, Suk Hun, 1993. "Are the credit ratings assigned by bankers based on the willingness of LDC borrowers to repay?," Journal of Development Economics, Elsevier, vol. 40(2), pages 349-359, April.
    12. Kevane, Michael & Wydick, Bruce, 2001. "Microenterprise Lending to Female Entrepreneurs: Sacrificing Economic Growth for Poverty Alleviation?," World Development, Elsevier, vol. 29(7), pages 1225-1236, July.
    13. Fairlie, Robert & Robb, Alicia M., 2009. "Gender Differences in Business Performance: Evidence from the Characteristics of Business Owners Survey," Santa Cruz Department of Economics, Working Paper Series qt8rv5w116, Department of Economics, UC Santa Cruz.
    14. Lee, Suk Hun, 1991. "Ability and willingness to service debt as explanation for commercial and official rescheduling cases," Journal of Banking & Finance, Elsevier, vol. 15(1), pages 5-27, February.
    15. Rachel Croson & Uri Gneezy, 2009. "Gender Differences in Preferences," Journal of Economic Literature, American Economic Association, vol. 47(2), pages 448-474, June.
    16. Glenn W. Harrison & Eric Johnson & Melayne M. McInnes & E. Elisabet Rutström, 2005. "Risk Aversion and Incentive Effects: Comment," American Economic Review, American Economic Association, vol. 95(3), pages 897-901, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Musiliu Okesina, 2022. "Why Does Microfinance Target Women? Empirical Evidence from Nigeria," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 14(2), pages 246-264, May.
    2. Rajmoni Singha, 2014. "Kinship and Marriage System among the Khasis of Bangladesh: A Study of Khasi Culture and Identity," Bangladesh Development Research Working Paper Series (BDRWPS) BDRWPS No. 24, Bangladesh Development Research Center (BDRC).
    3. Bátiz-Zuk Enrique & González-Holden Alexa, 2023. "Identifying Gender Disparities on the Time to Repay Microfinance Group Loans: Evidence from Mexico," Working Papers 2023-07, Banco de México.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Shahriar, Abu Zafar M. & Unda, Luisa A. & Alam, Quamrul, 2020. "Gender differences in the repayment of microcredit: The mediating role of trustworthiness," Journal of Banking & Finance, Elsevier, vol. 110(C).
    2. Klege, Rebecca Afua & Visser, Martine & Barron A, Manuel F. & Clarke, Rowan P., 2021. "Competition and gender in the lab vs field: Experiments from off-grid renewable energy entrepreneurs in Rural Rwanda," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 91(C).
    3. Hadar Gafni & Dan Marom & Alicia Robb & Orly Sade, 0. "Gender Dynamics in Crowdfunding (Kickstarter): Evidence on Entrepreneurs, Backers, and Taste-Based Discrimination," Review of Finance, European Finance Association, vol. 25(2), pages 235-274.
    4. Reuben, Ernesto & Sapienza, Paola & Zingales, Luigi, 2015. "Competitiveness and the Gender Gap among Young Business Professionals," IZA Discussion Papers 9446, Institute of Labor Economics (IZA).
    5. Klege, Rebecca A. & Visser, Martine, 2019. "Competition and Gender in the Lab vs. Field: Experiments with Off-Grid Renewable Energy Entrepreneurs in Rural Rwanda," EfD Discussion Paper 19-24, Environment for Development, University of Gothenburg.
    6. Takahashi, Hidenori & Honjo, Yuji & Kato, Masatoshi, 2024. "The gender gap in the first deal: Equity split among founding teams," Journal of Banking & Finance, Elsevier, vol. 168(C).
    7. Hameem Raees Chowdhury, 2016. "Joint-Liability in Microcredit: Evidence from Bangladesh," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 44(1), pages 105-129, March.
    8. Ernesto Reuben & Paola Sapienza & Luigi Zingales, 2024. "Overconfidence and Preferences for Competition," Journal of Finance, American Finance Association, vol. 79(2), pages 1087-1121, April.
    9. Brink, Siegrun & Kriwoluzky, Silke & Bijedic, Teita & Ettl, Kerstin & Welter, Friederike, 2014. "Gender, Innovation und Unternehmensentwicklung," IfM-Materialien 228, Institut für Mittelstandsforschung (IfM) Bonn.
    10. Bjorvatn, Kjetil & Falch, Ranveig & Hernæs, Ulrikke, 2016. "Gender, context and competition: Experimental evidence from rural and urban Uganda," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 61(C), pages 31-37.
    11. Justo, Rachida & DeTienne, Dawn R. & Sieger, Philipp, 2015. "Failure or voluntary exit? Reassessing the female underperformance hypothesis," Journal of Business Venturing, Elsevier, vol. 30(6), pages 775-792.
    12. Fang,Sheng & Goh,Chorching & Roberts,Mark & Xu,L. Colin & Zeufack,Albert G., 2020. "Female Business Leaders, Business and Cultural Environment, and Productivity around the World," Policy Research Working Paper Series 9275, The World Bank.
    13. Grosch, Kerstin & Fischer, Sabine, 2024. "Gender equivalence in overconfidence A large-scale experimental study in a non-WEIRD country," Department for Strategy and Innovation Working Paper Series 02/2024, WU Vienna University of Economics and Business.
    14. Emma Galli & Danilo V. Mascia & Stefania P. S. Rossi, 2020. "Bank credit constraints for women‐led SMEs: Self‐restraint or lender bias?," European Financial Management, European Financial Management Association, vol. 26(4), pages 1147-1188, September.
    15. Tobol, Yossef & Bar-El, Ronen & Arbel, Yuval & Azar, Ofer H., 2019. "Gender Differences in the Effect of Employee-Manager Friendships on Salary Dynamics in CPA Firms," IZA Discussion Papers 12707, Institute of Labor Economics (IZA).
    16. David A. Matsa & Amalia R. Miller, 2014. "Workforce Reductions at Women-Owned Businesses in the United States," ILR Review, Cornell University, ILR School, vol. 67(2), pages 422-452, April.
    17. Eber, Nicolas & François, Abel & Weill, Laurent, 2021. "Gender, age, and attitude toward competition," Journal of Economic Behavior & Organization, Elsevier, vol. 192(C), pages 668-690.
    18. Hoang, Tuyen Thanh & Nguyen, Cuong Viet & Van Tran, Hoa Thi, 2019. "Are female CEOs more risk averse than male counterparts? Evidence from Vietnam," Economic Analysis and Policy, Elsevier, vol. 63(C), pages 57-74.
    19. Johnsen, Åshild A. & Finseraas, Henning & Hanson, Torbjørn & Kotsadam, Andreas, 2023. "The malleability of competitive preferences," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 104(C).
    20. Francesca Maria Cesaroni & Francesca Lotti & Paolo Emilio Mistrulli, 2013. "Female firms and banks� lending behaviour: what happened during the great recession?," Questioni di Economia e Finanza (Occasional Papers) 177, Bank of Italy, Economic Research and International Relations Area.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:csr:wpaper:1019. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sugato Chakravarty (email available below). General contact details of provider: https://edirc.repec.org/data/dcpurus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.