Firms' gender composition, loan collateral, and sustainable finance

Rudresh Pandey, Xian He and Dengjun Zhang

Global Finance Journal, 2024, vol. 63, issue C

Abstract: This study evaluates gender gaps in the collateral requirements of bank loans using a sample of firms in Latin America. We measure firm-level gender composition through ownership and workforce, both of which are directly related to women's economic empowerment. Additionally, we evaluate the differences in the impacts of firms' gender composition on collateral borrowing between banks that adopt sustainable finance codes of conduct and those that do not. Our empirical findings indicate that female-dominant firms are less likely to be required to provide collateral for their bank loans, and when collateral is required, its value is relatively lower. However, banks adopting sustainable finance codes are not less likely to grant collateral loans to female-dominant firms; in fact, these banks even require greater collateral values from these firms. The implications derived from our empirical findings concern gender inequality in accessing financial credit in developing countries and underscore the need for designing sustainable finance codes that specifically consider and rectify the challenges faced by female-owned firms, especially by firms with a majority female workforce.

Keywords: Collateral borrowing; Gender equality; Sustainable finance; Latin America (search for similar items in EconPapers)
JEL-codes: G21 G32 J16 (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1044028324001236
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:glofin:v:63:y:2024:i:c:s1044028324001236

DOI: 10.1016/j.gfj.2024.101051

Access Statistics for this article

Global Finance Journal is currently edited by Manuchehr Shahrokhi

More articles in Global Finance Journal from Elsevier
Bibliographic data for series maintained by Catherine Liu ().