Gender and Banking: Are Women Better Loan Officers?

Review of Finance, Forthcoming

European Banking Center Discussion Paper No. 2009-19

CentER Discussion Paper Series No. 2009-63

51 Pages Posted: 4 Aug 2009 Last revised: 4 Jul 2012

See all articles by Thorsten Beck

Thorsten Beck

City University London - Sir John Cass Business School; Tilburg University - European Banking Center, CentER

Patrick Behr

Getulio Vargas Foundation (FGV) - Brazilian School of Public and Business Administration (EBAPE)

Andre Guettler

University of Ulm - Department of Mathematics and Economics; Halle Institute for Economic Research

Multiple version iconThere are 2 versions of this paper

Date Written: May 31, 2010

Abstract

We analyze gender differences associated with loan officer performance. Using a unique data set for a commercial bank over the period 1996 to 2006, we find that loans screened and monitored by female loan officers show a statistically and economically significant lower likelihood to turn problematic than loans handled by male loan officers. This effect comes in addition to a lower risk of female borrowers and cannot be explained by sample selection, experience differences between female and male loan officers, or different workload of male loan officers. Our results seem to be driven by differences in monitoring between female and male loan officers as both are equally good at screening based on observable as well as on unobservable borrower characteristics. This suggests that gender indeed matters in banking.

Keywords: Behavioral banking, loan officers, gender, loan default, monitoring, screening

JEL Classification: G21, J16

Suggested Citation

Beck, Thorsten and Behr, Patrick and Guettler, Andre, Gender and Banking: Are Women Better Loan Officers? (May 31, 2010). Review of Finance, Forthcoming; European Banking Center Discussion Paper No. 2009-19; CentER Discussion Paper Series No. 2009-63. Available at SSRN: https://ssrn.com/abstract=1443107 or http://dx.doi.org/10.2139/ssrn.1443107

Thorsten Beck

City University London - Sir John Cass Business School ( email )

106 Bunhill Row
London, EC1Y 8TZ
United Kingdom

Tilburg University - European Banking Center, CentER ( email )

PO Box 90153
Tilburg, 5000 LE
Netherlands

Patrick Behr (Contact Author)

Getulio Vargas Foundation (FGV) - Brazilian School of Public and Business Administration (EBAPE) ( email )

Brazil

Andre Guettler

University of Ulm - Department of Mathematics and Economics ( email )

Helmholzstrasse
Ulm, D-89081
Germany

Halle Institute for Economic Research ( email )

P.O. Box 11 03 61
Kleine Maerkerstrasse 8
D-06017 Halle, 06108
Germany

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