Abstract
Drawing on gender role theory and the extant research on gender and financing, we investigate the extent to which gender of the borrower and the gender egalitarianism practices dimension of the borrower’s societal culture interact to influence the amount of funding received in a microlending context. Using single-person project data from Kiva, a global online microlending organization, and national culture data from the GLOBE project, we find a main effect of gender, in that women borrowers raise less funding than men, but this effect is moderated by gender egalitarianism practices in the borrowers’ home culture. Specifically, when gender egalitarianism of their home culture is low, women borrowers receive more funding than men. Our discussion of these findings provides a nuanced explanation for why—despite the existence of underlying, widespread bias against women around the world—microlending may help women in especially challenging and exclusionary cultural situations gain funding.
Plain English Summary
Gender egalitarianism impacts the amount of funding women raise on microlending loans. Microlending typically refers to small loans made to low-income individuals seeking funding for a business or sustenance-related project. Due to the impersonal nature of the microlending context in an online environment, lenders must rely on limited information in making their lending decisions. Due to a variety of biases women face in receiving funding, such biases may impact microlending decisions, thus creating a gender gap in funding. Our study uses data from Kiva, a microlending platform, and consistent with our expectation, women raise less funds than men. However, in countries where gender egalitarianism is lower, we find that women are more likely to raise funding than men. The principal conclusion—that gender egalitarianism, as a cultural practice, affects funding for women—has implications for both research and practice.
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Notes
We thank an anonymous reviewer for their help in articulating this.
We thank an anonymous reviewer for pointing this out.
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Quigley, N.R., Patel, P.C. Reexamining the gender gap in microlending funding decisions: the role of borrower culture. Small Bus Econ 59, 1661–1685 (2022). https://doi.org/10.1007/s11187-021-00593-3
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DOI: https://doi.org/10.1007/s11187-021-00593-3