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Sex and Credit: Is There a Gender Bias in Lending?

European Banking Center Discussion Paper No. 2012-017

CentER Discussion Paper Series No. 2012-062

44 Pages Posted: 8 Aug 2012 Last revised: 28 Jan 2015

Thorsten Beck

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

Patrick Behr

Brazilian School of Public and Business Administration

Andreas Madestam

Stockholm University, Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: January 28, 2015

Abstract

We study the effects of own-gender preferences on the supply of and demand for credit using data from a large Albanian lender. Exploiting the quasi-random assignment of borrowers to loan officers we find that 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 receive less favorable loan terms, but do not experience higher arrears. Our results imply that own-gender preferences in the credit market can have substantial welfare effects.

Keywords: Group identity, gender, credit supply, credit demand, loan officers

JEL Classification: G21, G32, J16

Suggested Citation

Beck, Thorsten and Behr, Patrick and Madestam, Andreas, Sex and Credit: Is There a Gender Bias in Lending? (January 28, 2015). European Banking Center Discussion Paper No. 2012-017. Available at SSRN: https://ssrn.com/abstract=2126489 or http://dx.doi.org/10.2139/ssrn.2126489

Thorsten Beck (Contact Author)

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

Brazilian School of Public and Business Administration ( email )

Praia de Botafogo 190
Rio de Janeiro, 22250-900
Brazil

Andreas Madestam

Stockholm University, Department of Economics ( email )

Universitetsvägen 10
Stockholm, Stockholm SE-106 91
Sweden

HOME PAGE: http://www.ne.su.se/andreasmadestam

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