Gender Biases in Bank Lending: Lessons from Microcredit in France

Anastasia Cozarenco and Ariane Szafarz
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Anastasia Cozarenco: MRM - Montpellier Research in Management - UPVM - Université Paul-Valéry - Montpellier 3 - UPVD - Université de Perpignan Via Domitia - Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School - UM - Université de Montpellier

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Abstract: The evidence on gender discrimination in lending remains controversial. To capture gender biases in banks' loan allocations, we observe the impact on the applicants of a microfinance institution (MFI) and exploit the natural experiment of a regulatory change imposing a strict EUR 10,000 loan ceiling on microcredit. Descriptive statistics indicate that the presence of the ceiling is associated both with bank-MFI co-financing and with harsher treatment of female borrowers. To investigate causal links, we develop an econometric approach that addresses the concerns of selection biases, multicollinearity, and endogeneity. Our empirical findings suggest that the change in the MFI's gender-related attitude was triggered by banks through co-financing. Hence, we speculate that co-financing pushes ceiling-constrained MFIs to import whatever biases in loan granting that the banks are prone to. Overall, this paper stresses that apparently benign regulations such as loan ceilings can significantly harm the women's empowerment efforts made by MFIs.

Keywords: Microcredit; Bank; Loan ceiling; Gender; France (search for similar items in EconPapers)
Date: 2018-02
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Citations: View citations in EconPapers (27)

Published in Journal of Business Ethics, 2018, 147 (3), pp.631-650. ⟨10.1007/s10551-015-2948-y⟩

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Related works:
Journal Article: Gender Biases in Bank Lending: Lessons from Microcredit in France (2018)
Working Paper: Gender Biases in Bank Lending: Lessons from Microcredit in France (2018)
Working Paper: Gender Biases in Bank Lending: Lessons from Microcredit in France (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02049949

DOI: 10.1007/s10551-015-2948-y

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