"Are Women Really Better Borrowers in Microfinance? Evidence from Matrilineal and Patrilineal Societies in India" by Dr. Shagata Mukherjee | Shiv Nadar University
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"Are Women Really Better Borrowers in Microfinance? Evidence from Matrilineal and Patrilineal Societies in India" by Dr. Shagata Mukherjee

Event Date: 
Friday, August 24, 2018 -
12:3013:45

While the universal policy of gender targeting in microfinance stems, inter alia, from the conventional wisdom that women are better credit risks, there has been little research on the underlying reasons for it. Are women wired naturally and fundamentally different than men to be better borrowers or is it the social context in which the gender roles operate that motivate their behavior? I study this question by designing and conducting microfinance field experiments in comparable matrilineal and patrilineal societies in rural India. My experimental design allows isolating the different moral hazard channels through which default occurs and interact them with gender and types of societies. I observe a reversal of gender effect on loan default across the two societies. I find that women have a significantly lower default in the patrilineal society but significantly higher default in the matrilineal society compared to their male counterparts. I also find that matrilineal women are more likely to invest in risky projects than women in patrilineal society. Moreover, they are likely to default strategically not only more than patrilineal women but even more than patrilineal men. My results suggest that while women are better clients on average, a universal policy of gender targeting to reduce default in microfinance might be suboptimal. Thus, in microfinance, and more broadly in all development policy spheres, policymakers should take into consideration the heterogeneity across societies and the social context in which a policy is implemented to be able to design better-targeted policies.

Friday 24, Aug 2018
12:30 PM - 01:45 PM
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