Gender Differences in Bank Loan Access: An Empirical Analysis

Traditionally, female entrepreneurs report either difficulties or higher costs in accessing bank credit. These problems can be either the result of supply-side dis- crimination, or differences in profitability between female- and male-owned firms. This paper aims at analysing whether these differences are statistically significant in the case of Italian firms by means of a large dataset on lines of credit provided by three Italian banks over the period 2005–2008. Descriptive statistics show that female-owned firms are significantly smaller and younger than male-owned ones, and have—on average—a larger, but shorter, number of lending relationships. Addition- ally, the mean size of loans requested by female-owned firms is smaller, and more frequently assisted with collateral, personal guarantees, or both. After controlling for loan, firm and bank characteristics, estimates show that gender does not affect the likelihood of obtaining a bank loan. However, in the case of female-owned firms, guarantees are less powerful instruments in gaining access to credit and the probability of having to pledge collateral is higher than for male-owned firms. Our findings suggest that differences in credit access are the result of discrimination and structural differences between male- and female-owned firms. Policies designed to improve the access of female-owned firms to bank loans should favor an increase in firm size that is often associated with the adoption of more sophisticated business legal structures.