Gender, Entrepreneurship, and Bank Lending: The Criteria and Processes Used by Bank Loan Officers in Assessing Applications

Citation

Carter S, Shaw E, Wing L & Wilson F (2007) Gender, Entrepreneurship, and Bank Lending: The Criteria and Processes Used by Bank Loan Officers in Assessing Applications. Entrepreneurship Theory and Practice, 31 (3), pp. 427-444. https://doi.org/10.1111/j.1540-6520.2007.00181.x

Abstract
Previous research provides unequivocal evidence that women-owned businesses start with both lower levels of overall capitalization and lower ratios of debt finance. Structural dissimilarities between male-owned and female-owned businesses explain most, but by no means all, of these contrasting funding profiles. Explanations of residual differences, viewed in terms of supply-side discrimination or demand-side debt and risk aversion, remain controversial. Using experimental and qualitative methodologies, this study explores the role of gender in bank lending decisions, focusing on the criteria and processes used by male and female loan officers. Results reveal similarities in the criteria used to assess male and female applicants but show modest differences in the emphasis given to certain criteria by male and female lending officers. The processes used by male and female lending officers to negotiate loan applications revealed the greatest differences.

Keywords
; Sex discrimination; Discrimination in commercial loans

Notes
Sara Carter is now employed at the University of Strathclyde

Journal
Entrepreneurship Theory and Practice: Volume 31, Issue 3