Gender and Banking: Are Women Better Loan Officers?

Analyzing gender differences associated with loan officer performance
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This paper analyzes gender differences associated with loan officer performance. It uses a loan-level data set for a commercial bank in Albania over the period 1996 to 2006. The study reveals that loans screened and monitored by female loan officers show a statistically and economically significant lower likelihood to turn problematic than loans handled by male loan officers. Exploring possible explanations for this performance advantage of female loan officers, the study finds that:

  • Female loan officers are not assigned to less risky borrowers;
  • Female and male loan officers do not differ in their acceptance of applicants;
  • Female loan officers do not grant loans more restrictively compared with male loan officers;
  • Workloads of male and female loan officers are not different;
  • Results do not vary with different experience levels of female and male loan officers.

Study results seem to be driven by differences in monitoring, as male and female loan officers do not seem to screen borrowers differently. Finally, the study highlights that gender matters in banking.

About this Publication

By Beck, T., Behr, P. & Güttler, A.