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Sex and Credit : Is There A Gender Bias In Lending?

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  • Beck, T.H.L.

    (Tilburg University, School of Economics and Management)

  • Behr, P.
  • Madestam, A.

Abstract

We exploit the quasi-random assignment of borrowers to loan officers using data from a large Albanian lender to show that own-gender preferences affect both credit supply and demand. Borrowers matched to officers of the opposite sex are less likely to return for a second loan. The effect is larger when officers have little prior exposure to borrowers of the other gender and when they have more discretion to act on their gender beliefs, as proxied by financial market competition and branch size. We examine one channel of influence, loan conditionality. Borrowers assigned to opposite-sex officers pay higher interest rates and receive lower loan amounts, but do not experience higher arrears. Our results imply that own-gender preferences in the credit market can have substantial negative welfare effects.
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Suggested Citation

  • Beck, T.H.L. & Behr, P. & Madestam, A., 2012. "Sex and Credit : Is There A Gender Bias In Lending?," Other publications TiSEM cfe8b47a-01be-4ad8-8a8a-d, Tilburg University, School of Economics and Management.
  • Handle: RePEc:tiu:tiutis:cfe8b47a-01be-4ad8-8a8a-d81d67b7ae9c
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    Cited by:

    1. Simon Quinn & Tom Gole, 2014. "Committees and Status Quo Bias: Structural Evidence from a Randomized Field Experiment," Economics Series Working Papers 733, University of Oxford, Department of Economics.
    2. Juri Marcucci & Paolo Emilio Mistrulli, 2013. "Female entrepreneurs in trouble: do their bad loans last longer?," Questioni di Economia e Finanza (Occasional Papers) 185, Bank of Italy, Economic Research and International Relations Area.
    3. Elmas Yaldiz Hanedar & Eleonora Broccardo & Flavio Bazzana, 2012. "Collateral Requirements of SMEs:The Evidence from Less–Developed Countries," Centro Studi di Banca e Finanza (CEFIN) (Center for Studies in Banking and Finance) 0034, Universita di Modena e Reggio Emilia, Dipartimento di Economia "Marco Biagi".
    4. Aterido, Reyes & Beck, Thorsten & Iacovone, Leonardo, 2011. "Gender and finance in Sub-Saharan Africa : are women disadvantaged ?," Policy Research Working Paper Series 5571, The World Bank.
    5. Raj Aggarwal & John Goodell, 2013. "Lending to women in microfinance: influence of social trust and national culture Lending to women in microfinance: influence of social trust and national culture," Working Papers (Old Series) 1317, Federal Reserve Bank of Cleveland.
    6. Steven Ongena & Alexander Popov, 2016. "Gender Bias and Credit Access," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 48(8), pages 1691-1724, December.
    7. Behr, Patrick & Drexler, Alejandro & Gropp, Reint & Guettler, Andre, 2020. "Financial Incentives and Loan Officer Behavior: Multitasking and Allocation of Effort under an Incomplete Contract," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 55(4), pages 1243-1267, June.
    8. Štěpán Jurajda & Radek Janhuba, 2018. "Gender in banking and mortgage behavior," Applied Economics Letters, Taylor & Francis Journals, vol. 25(20), pages 1432-1435, November.
    9. Suparna Chakraborty, 2014. "Laws, attitudes and financial inclusion of women: A cross-country investigation," Economics Bulletin, AccessEcon, vol. 34(1), pages 333-353.
    10. Aterido, Reyes & Beck, Thorsten & Iacovone, Leonardo, 2013. "Access to Finance in Sub-Saharan Africa: Is There a Gender Gap?," World Development, Elsevier, vol. 47(C), pages 102-120.
    11. Yaldız Hanedar, Elmas & Broccardo, Eleonora & Bazzana, Flavio, 2014. "Collateral requirements of SMEs: The evidence from less-developed countries," Journal of Banking & Finance, Elsevier, vol. 38(C), pages 106-121.
    12. Rolando Gonzales & Gabriela Aguilera-Lizarazu & Andrea Rojas-Hosse & Patricia Aranda, 2016. "Preference for women but less preference for indigenous women: A lab-field experiment of loan discrimination in a developing economy," Working Papers PIERI 2016-24, PEP-PIERI.
    13. Geoffrey Barrows, 2018. "Do Entrepreneurship Policies Work? Evidence From 460 Start-Up Program Competitions Across the Globe," Policy Papers 2018.02, FAERE - French Association of Environmental and Resource Economists.
    14. Tran, Viet T. & Nguyen, Trung Thanh & Tran, Nguyet T.M., 2019. "Gender difference in access to local finance and firm performance: Evidence from a panel survey in Vietnam," Economic Analysis and Policy, Elsevier, vol. 63(C), pages 150-164.
    15. Beatriz Cu鬬ar-Fernᮤez & Yolanda Fuertes-Call鮠 & Carlos Serrano-Cinca & Bego uti鲲ez-Nieto, 2016. "Determinants of margin in microfinance institutions," Applied Economics, Taylor & Francis Journals, vol. 48(4), pages 300-311, January.
    16. Natalya Presman & Nitzan Tzur-Ilan, 2019. "Does Location Matter? Evidence on Differential Mortgage Pricing in Israel," Bank of Israel Working Papers 2019.14, Bank of Israel.
    17. Ina Ganguli & Ricardo Hausmann & Martina Viarengo, 2017. "Career dynamics and gender gaps among employees in the microfinance sector," WIDER Working Paper Series 117, World Institute for Development Economic Research (UNU-WIDER).
    18. Julien Cusin & Vincent Maymo, 2016. "Post-bankruptcy stigmatization of entrepreneurs and bankers' decisions to finance," Post-Print hal-03240454, HAL.

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    More about this item

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination

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