Credit risk in the microfinance industry: The role of gender affinity

This study explores the role played by gender in lending transactions and specifically its effects on loan portfolio credit risk of microfinance institutions (MFIs). Using a multicountry data set developing countries, where MFIs mainly operate, analysis shows that higher proportion female officers increases at risk. Nonetheless, we also find this positive relationship is negatively mediated affinity between borrowers. Gender suggests are more likely to lend borrowers, reduces default rate loans offered MFIs.