Microfinance and Gender: Is There a Glass Ceiling on Loan Size?

Posted: 23 Mar 2010 Last revised: 3 Jan 2013

See all articles by Isabelle Agier

Isabelle Agier

Université Paris I Panthéon Sorbonne, UMR 201; Université libre de Bruxelles, CERMi

Ariane Szafarz

Université Libre de Bruxelles, Solvay Brussels School of Economics and Management, Centre Emile Bernheim (CEB) & CERMi

Date Written: January 1, 2013

Abstract

Most of the customers of microfinance institutions are female. But do men and women benefit from the same credit conditions? We investigate this issue by presenting an original model and testing its predictions on an exceptional database comprising 34,000 loan applications from a Brazilian microfinance institution. The model determines the optimal loan size fixed by a gender-biased lender, depending on the borrower's creditworthiness and the intensity of the lender's bias. The empirical analysis detects no gender bias in loan denial, but uncovers disparate treatment with regard to credit conditions. In particular, we find a “glass ceiling” effect. The gender gap in loan size increases disproportionately with respect to the scale of the borrower's project. The results are insensitive to the loan officer's gender.

Keywords: Microcredit, Microfinance, Gender, Discrimination, Women entrepreneurs

JEL Classification: O16, D82, G21, L31, J16

Suggested Citation

Agier, Isabelle and Szafarz, Ariane, Microfinance and Gender: Is There a Glass Ceiling on Loan Size? (January 1, 2013). World Development, February 2013, vol. 42, 165–181. . Available at SSRN: https://ssrn.com/abstract=1573872 or http://dx.doi.org/10.2139/ssrn.1573872

Isabelle Agier

Université Paris I Panthéon Sorbonne, UMR 201 ( email )

IEDES, 45 bis avenue de la Belle Gabrielle
Nogent sur Marne, 94736
France

Université libre de Bruxelles, CERMi

Avenue F.D. Roosevelt 21 - CP145/1
Brussels, B-1050
Belgium

Ariane Szafarz (Contact Author)

Université Libre de Bruxelles, Solvay Brussels School of Economics and Management, Centre Emile Bernheim (CEB) & CERMi ( email )

50 Avenue Roosevelt
Brussels 1050
Belgium

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