Lending to women in microfinance: Role of social trust

Raj Aggarwal, John W. Goodell and Lauren J. Selleck

International Business Review, 2015, vol. 24, issue 1, 55-65

Abstract: Microfinance institutions’ (MFIs) preference for women borrowers varies internationally and the MFI focus on women borrowers is generally attributed to two reasons: women borrowers are more trustworthy and have greater social impact. However, the role of social trust with regard to this gender preference has not been adequately investigated. We document that MFIs favor women more in low trust countries and in countries where social trust formation is primarily behavioral. We interpret these findings as consistent with gender targeting being used as a substitute for social trust. Our results should be of considerable interest to policy-makers, managers, and scholars.

Keywords: Access to finance; Banking; Economic development; Financing; Gender development; Gender discrimination; National culture; Social trust (search for similar items in EconPapers)
JEL-codes: A14 G21 J16 J30 O16 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (50)

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DOI: 10.1016/j.ibusrev.2014.05.008

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