Female Leaders and Financial Inclusion: Evidence from Microfinance Institutions

R. Øystein Strøm, Bert D’espallier and Roy Mersland ()
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Roy Mersland: UIA - University of Agder

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Abstract: This research advances the hypothesis that female leaderschief executive officers (CEOs), chairs, and directorsof a microfinance institution (MFI) give more priority to the poorest families in loan provision than male leaders do. We differentiate between a depth and a width dimension of financial inclusion. The data set is a unique global panel of MFIs collected from MFI raters' reports. Our sample is also unique in the sense that about one-third of all MFIs have a female CEO. The problem of endogeneity for the female leader is resolved by running Heckman's two-step endogenous dummy variable estimation with an instrument for the female leader. We find evidence of greater depth financial inclusion (smaller average loans, more gender bias) with a female leader but not for width financial inclusion (credit client growth). Female leaders exhibit greater altruism and greater competition avoidance but not greater risk aversion than male peers.

Keywords: financial access; microfinance institutions; cross-country panel data; JEL codes: G34; M12; M14 Female leadership; JEL codes: G34 M12 M14 Female leadership (search for similar items in EconPapers)
Date: 2023
Note: View the original document on HAL open archive server: https://hal.science/hal-05221044v1
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Published in Review of Corporate Finance, 2023, 3 (1–2), pp.69-97. ⟨10.1561/114.00000036⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05221044

DOI: 10.1561/114.00000036

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