Small Business Economics

, Volume 41, Issue 1, pp 263–275 | Cite as

Subjectivity in credit allocation to micro-entrepreneurs: evidence from Brazil

  • Isabelle AgierEmail author
  • Ariane Szafarz


This paper estimates the impact of loan officer subjectivity on microcredit granting by exploiting an exceptionally detailed database from a Brazilian microfinance institution. The loan officers collect field data, meet with applicants, and make recommendations to the credit committee, which has the final say on both loan approval and loan size (LS). The loan officer’s subjectivity is captured through gender bias. Our estimations indeed show subjective gender gap in LS. This gap is almost exclusively attributable to loan officers. We interpret this finding as evidence that, despite monitoring and wage incentivization, microcredit officers let their subjective preferences interfere with loan granting. We conclude by suggesting alternative means to curb subjectivity in credit allocation to micro-entrepreneurs.


Subjectivity Microcredit Gender Loan officer Loan size Entrepreneurs 

JEL Classifications

O16 D82 J33 L31 


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Copyright information

© Springer Science+Business Media, LLC. 2012

Authors and Affiliations

  1. 1.UMR 201—Développement et Sociétés (Sorbonne/IRD)Université Paris I Panthéon SorbonneNogent sur MarneFrance
  2. 2.Centre for European Research in Microfinance (CERMi)BrusselsBelgium
  3. 3.Université Libre de Bruxelles (ULB), SBS-EM, Centre Emile Bernheim, and CERMi, ULBBrusselsBelgium

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