Are female borrowers less risky than men ? Empirical evidence from burundian microfinance institutions, pp. 81-102,
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Date
2016-12
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UB, Cahiers du CURDES
Abstract
The general purpose of this paper is to examine the creditworthiness of women compared to men.We use a database gathered from Burundian National Federation of Saving and Credit Cooperatives (FENACOBU) to measure the association between the default risk and five independent variables, namely gender, industry, maturity, credit amount and frequency of reimbursement from 2010 to 2014. The association is tested trough probit model and coefficients are measured by marginal effects.The main conclusion of our research is that when a financial institution lends to a man rather than to a woman, it incurs an additional default risk of about 2%. Incidentally, our study led us to following conclusions: a borrower who invests in sectors other than the primary one reduces the default risk by about 2 percent; one percent increase of credit amount reduces the default risk by about 1.5 percent; a credit repayment made at a frequency other than monthly
increases the default risk of about 24%.Financial institutions should avoid discrimination against female borrowers and afford them with lower interest rates given they are less risky. To our knowledge, no scientific paper has analysed the gender-based differences in financial behaviour in Burundi. Hence, we can argue that our paper opens a new avenue for research in gender-based financial behaviour.
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NTAWIRATSA Rédempteur, NZIRORERA Cyriaque, Are female borrowers less risky than men ? Empirical evidence from burundian microfinance institutions, pp. 81-102, Cahiers du CURDES n° 16, Décembre 2016.