Gender discrimination in small business lending: Evidence from Turkey

This Brief reports on a randomised lab experiment with a Turkish bank to detect gender discrimination among lending staff. Though gender bias was widespread among staff, this did not cause explicit discrimination in loan approvals. However, for women, loan approval was more likely to be made conditional on the presence of a guarantor.

Similar to many other emerging markets, Turkey remains characterised by large gender gaps in the use of financial services. For instance, while 83 per cent of all Turkish men have a bank account, this is true for only 54 per cent of Turkish women. And while 43 per cent of male-owned Turkish firms say they are held back by a lack of credit, this is the case for 63 per cent of firms owned by women (EBRD, 2019). This EBRD Impact Brief explores the extent to which such gender gaps may reflect discriminatory practices among lenders.