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

49 Pages Posted: 8 Aug 2012 Last revised: 16 Jun 2018

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)

Andreas Madestam

Stockholm University, Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: April 28, 2017

Abstract

This paper studies the effects of own-gender preferences on the supply of and demand for credit using data from a large Albanian lender. We document that first-time borrowers assigned 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 also find that first-time borrowers matched with opposite-sex officers pay higher interest rates and receive smaller and shorter-maturity loans, but do not experience higher arrears. Our results are consistent with the existence of an own-gender bias and learning effects that lead to the disappearance of the bias.

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? (April 28, 2017). Journal of Banking and Finance, Vol. 87, 2018. 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

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

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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