Does gender affect loan default?

Abstract

We examine the effects of gender on loan default in an emerging market context. Specifically, we investigate whether female borrowers are less risky to loan default than male counterparts. Using logit and 3,717 loan clients’ dataset from a big financial institution in Sierra Leone over the period 2007 to 2014, we find that female is positively related to loan default but not statistically significant. This finding has implication on theory, practice and policy on loan default in emerging market context. This study’s finding does not only contribute to an important but neglected area of research, but also practice and policy, due to the size, growth and impact of loan default in emerging markets.