Loan Officers’ Gender and Microfinance Repayment Rates

Abstract

This study examines the impact of loan officer characteristics on repayment rates of microfinance borrowers in Mexico applying multilevel analyses, with special attention to the impact of the gender of the loan officer on default rates. The results strongly suggest that loan officers play a crucial role in improving repayment rates in microfinance and that male loan officers are better able to induce borrowers to repay than female loan officers. This may be because men exert authority over women and face fewer problems working late, travelling through unsafe places, and combining a position as counsellor with enforcing repayment.

Acknowledgements

We would like to thank Iris Roscam Abbing for assistance, especially in terms of obtaining additional qualitative information on loan officers of Pro Mujer Mexico. We also would like to thank two anonymous referees for constructive and relevant comments.

This study was possible thanks to the financial support of the National Council of Science and Technology of Mexico (CONACYT). We also thank Pro Mujer Mexico, A.C., for provide us with the necessary institutional support to carry out this empirical study. All the errors are of the authors alone.

Notes

1. This section is based on policy documents and interviews with managers and loan officers from Pro Mujer.

2. New clients are allowed to have loans with other institutions, but not to have outstanding overdue loans.

3. Coronango, San Cristobal Ecatepec, Tlahuac, and Xochimilco.

4. The quotes from the loan officer interviews in this section are taken from a qualitative background study conducted by Roscam Abbing (2011).