Does gender influence the terms of small business loans?

Deskripsi

Female entrepreneurs were found to face stricter conditions, including a higher likelihood of pledging collateral and tighter credit limits, though interest rates did not systematically differ by gender. Female loan officers exhibited nuanced behaviors: they charged male borrowers lower interest rates but required collateral less frequently from female borrowers. Branches with all-female loan officers imposed stricter credit limits on new borrowers, suggesting gendered dynamics in lending decisions. The study challenges assumptions about overt discrimination, attributing disparities to structural factors (e.g., risk assessment practices) rather than explicit bias. However, it underscores the need for banks to monitor lending patterns to ensure equitable treatment. These findings highlight persistent gender-based disparities in small business financing, with implications for policymakers and financial institutions aiming to foster inclusive entrepreneurship.