Research Insights: Do Bank Officers Favor Male over Female Loan Applicants?
Peer Reviewed
Date issued
July 2020
Publication
Subject
Gender Gap;
Gender Discrimination;
Gender Bias;
Credit Market;
Credit Access
JEL code
J16 - Economics of Gender • Non-labor Discrimination;
G20 - Financial Institutions and Services: General;
J71 - Discrimination;
G41 - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
Country
Chile
Category
Catalogs and Brochures
A randomized study in Chile found that otherwise equivalent loan requests from women are 18.3 percent less likely to be approved than those from men, largely due to gender-biased officers, particularly males. Median forgone profits associated with applications rejected due to gender discrimination amount to US$1,785 or 23 percent of the median loan size. Considering only discriminated applications from applicants aged 25 to 35 years for amounts between US$1,500 and US$13,500, the forgone profits at the industry level amount to US$5.8 million per year, which is equivalent to 4 percent of the annual labor cost for all loan officers in the Chilean banking system.
