Gender and bank lending after the global financial crisis: are women entrepreneurs safer bets?

Abstract

Using gender as a theoretical framework, we analyse the dynamics of bank lending to small- and medium-sized enterprises (SME) in the aftermath of the 2008 global financial crisis. Using six waves of the SME Finance Monitor survey, we apply a formal Oaxaca–Blinder decomposition to test whether gender impacts upon the supply and demand for debt finance by women. Reflecting established evidence, we found women had a lower demand for bank loans; contradicting accepted wisdom however, we found that women who did apply were more likely to be successful. We argue that feminised risk aversion might inform more conservative applications during a period of financial uncertainty which may be beneficial for women in terms of gaining loans. However, we also uncover more subtle evidence suggesting that bank decisions may differ for women who may be unfairly treated in terms of collateral but regarded more positively when holding large cash balances.