Gender and Credit Risk: A View from the Loan Officer's Desk

81 Pages Posted: 25 Mar 2020

See all articles by Jose G. Montalvo

Jose G. Montalvo

Universitat Pompeu Fabra

Marta Reynal-Querol

Universitat Pompeu Fabra

Date Written: March 2020


In this paper we analyze the effect of loan officers' gender on the approval of loans and, in particular, on their subsequent performance. Using detailed bank information on a sample of close to half a million loans, we show that female loan officers have, conditional on the risk score, around a 15% lower delinquency rate than that of male officers. In addition to the original scoring of the loans, we also have the recommendation of the expert system. We find that the risk profile of applicants screened by male and female loan officers is very similar, but conditional on risk score, women follow the recommendations more often than men. Moreover, we find evidence of gender bias in terms of a mistake-punishment trade-off, which could explain, at least in part, women's higher compliance with the recommendations. Indeed, there is a double standard in terms of the consequences for breaking the rules: errors, in the form of delinquent loans as a result of not following the recommendation of the system, are forgiven more often for male than for female loan officers.

JEL Classification: G21, G32, J16

Suggested Citation

Montalvo, Jose G. and Reynal-Querol, Marta, Gender and Credit Risk: A View from the Loan Officer's Desk (March 2020). CEPR Discussion Paper No. DP14500, Available at SSRN:

Jose G. Montalvo (Contact Author)

Universitat Pompeu Fabra ( email )

Ramon Trias Fargas 25-27
08005 Barcelona

Marta Reynal-Querol

Universitat Pompeu Fabra ( email )

Ramon Trias Fargas, 25-27
Barcelona, E-08005

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