Microfinance and Gender: Is There a Glass Ceiling in Loan Size?
Microfinance institutions serve a majority of female borrowers. But do men and women benefit from same credit conditions? This paper investigates this issue by presenting an original model and testing its predictions on an exceptional database including 34,000 loan applications from a Brazilian microfinance institution over an eleven-year period. The model considers a lender that offers standardized loan contracts with a fixed interest rate, which is common practice in microfinance. It demonstrates that biased loan attribution may lead to three different outcomes, depending on the bias intensity: 1) denial of all applications from a given group, 2) a “glass ceiling” effect, namely loan downsizing of the largest projects from a given group, or 3) no impact. The empirical analysis detects no gender bias in approval rate, but uncovers a glass ceiling effect hurting female applicants. Moreover, this effect is insensitive to the credit officer's gender. In conclusion, the good news is that the microfinance practice does ensure a fair access to credit. The bad news is the presence of a glass ceiling faced by female entrepreneurs with larger projects.
|Date of creation:||Sep 2010|
|Date of revision:|
|Publication status:||Published by:|
|Contact details of provider:|| Postal: CP114/03, 42 avenue F.D. Roosevelt, 1050 Bruxelles|
Phone: +32 (0)2 650.48.64
Fax: +32 (0)2 650.41.88
Web page: http://difusion.ulb.ac.be
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Beatriz Armendariz & Ariane Szafarz, 2011.
"On Mission Drift in Microfinance Institutions,"
ULB Institutional Repository
2013/97387, ULB -- Universite Libre de Bruxelles.
- Armendáriz, Beatriz & Szafarz, Ariane, 2011. "On mission drift in microfinance institutions," MPRA Paper 31041, University Library of Munich, Germany, revised 2010.
- Beatriz Armendariz & Ariane Szafarz, 2009. "On Mission Drift In Microfinance Institutions," Working Papers CEB 09-015.RS, ULB -- Universite Libre de Bruxelles.
- Bellucci, Andrea & Borisov, Alexander & Zazzaro, Alberto, 2010.
"Does gender matter in bank-firm relationships? Evidence from small business lending,"
Journal of Banking & Finance,
Elsevier, vol. 34(12), pages 2968-2984, December.
- Andrea Bellucci & Alexander V. Borisov & Alberto Zazzaro, 2009. "Does Gender Matter in Bank-Firm Relationships? Evidence from Small Business Lending," Mo.Fi.R. Working Papers 31, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
- Ariane Szafarz, 2008. "An Alternative to Statistical Discrimination," ULB Institutional Repository 2013/14329, ULB -- Universite Libre de Bruxelles.
- Marc Labie & Pierre-Guillaume Méon & Roy Mersland & Ariane Szafarz, 2010.
"Discrimination by Microcredit Officers: Theory and Evidence on Disability in Uganda,"
Working Papers CEB
10-007.RS, ULB -- Universite Libre de Bruxelles.
- Labie, Marc & Méon, Pierre-Guillaume & Mersland, Roy & Szafarz, Ariane, 2015. "Discrimination by microcredit officers: Theory and evidence on disability in Uganda," The Quarterly Review of Economics and Finance, Elsevier, vol. 58(C), pages 44-55.
- Marc Labie & Pierre-Guillaume Méon & Roy Mersland & Ariane Szafarz, 2015. "Discrimination by Microcredit Officers: Theory and Evidence on Disability in Uganda," ULB Institutional Repository 2013/226217, ULB -- Universite Libre de Bruxelles.
- Pierre-Guillaume Méon & Roy Mersland & Ariane Szafarz & Marc Labie, 2011. "Discrimination by Microcredit Officers:Theory and Evidence on Disability in Uganda," DULBEA Working Papers 11-06, ULB -- Universite Libre de Bruxelles.
- Borghans, Lex & Golsteyn, Bart H.H. & Heckman, James J. & Meijers, Huub, 2009.
"Gender Differences in Risk Aversion and Ambiguity Aversion,"
IZA Discussion Papers
3985, Institute for the Study of Labor (IZA).
- Lex Borghans & Bart H. H. Golsteyn & James J. Heckman & Huub Meijers, 2009. "Gender Differences in Risk Aversion and Ambiguity Aversion," Journal of the European Economic Association, MIT Press, vol. 7(2-3), pages 649-658, 04-05.
- Lex Borghans & Bart H.H. Golsteyn & James J. Heckman & Huub Meijers, 2009. "Gender Differences in Risk Aversion and Ambiguity Aversion," NBER Working Papers 14713, National Bureau of Economic Research, Inc.
- Borghans Lex & Golsteyn Bart & Heckman James & Meijers Huub, 2009. "Gender Differences in Risk Aversion and Ambiguity Aversion," ROA Research Memorandum 005, Maastricht University, Research Centre for Education and the Labour Market (ROA).
- Alberto F. Alesina & Francesca Lotti & Paolo Emilio Mistrulli, 2008.
"Do Women Pay More for Credit? Evidence from Italy,"
NBER Working Papers
14202, National Bureau of Economic Research, Inc.
- Blanchard, Lloyd & Zhao, Bo & Yinger, John, 2008. "Do lenders discriminate against minority and woman entrepreneurs?," Journal of Urban Economics, Elsevier, vol. 63(2), pages 467-497, March.
- Christian E. Weller, 2008.
"Credit Access, the Costs of Credit and Credit Market Discrimination,"
wp171, Political Economy Research Institute, University of Massachusetts at Amherst.
- Christian Weller, 2009. "Credit Access, the Costs of Credit and Credit Market Discrimination," The Review of Black Political Economy, Springer;National Economic Association, vol. 36(1), pages 7-28, March.
- Steven B. Caudill & Daniel M. Gropper & Valentina Hartarska, 2009. "Which Microfinance Institutions Are Becoming More Cost Effective with Time? Evidence from a Mixture Model," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 41(4), pages 651-672, 06.
- Marcella Corsi & Fabrizio Botti & Tommaso Rondinella & Giulia Zacchia, 2006. "Women and Microfinance in Mediterranean Countries," Development, Palgrave Macmillan, vol. 49(2), pages 67-74, June.
- Helena Marrez & Mathias Schmit, 2009. "Credit risk analysis in microcredit: How does gender matter?," Working Papers CEB 09-053.RS, ULB -- Universite Libre de Bruxelles.
When requesting a correction, please mention this item's handle: RePEc:sol:wpaper:2013/64289. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Benoit Pauwels)
If references are entirely missing, you can add them using this form.