Women and Repayment in Microfinance

Abstract

This paper analyzes gender-differences with respect to microfinance repayment-rates using a large global dataset covering 350 Microfinance Institutions (MFIs) in 70 countries. The results indicate that more women clients is associated with lower portfolio-at-risk, lower write-offs, and lower credit-loss provisions, ceteris paribus. These findings confirm common believes that women in general are a better credit-risk for MFIs. Interaction effects reveal that the effect is stronger for NGOs, individual-based lenders, ‘finance plus’-providers and regulated MFIs. This indicates that two types of MFIs benefit more than others from focussing on women: First, those MFIs that develop hands-on, women-friendly procedures tailored to individual women’s need, and Second, those MFIs that apply coercive enforcement methods to which women are more responsive.

Keywords: Microfinance, Gender, Repayment, Portfolio-at risk, Write-offs, Provisions

JEL Classification: O10, O12