Publication: Evening the Credit Score? Impact of Psychometric Loan Appraisal for Women Entrepreneurs
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2022-11
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2022-11-16
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Women’s lower rates of ownership of collateralizable assets are a constraint to accessing larger business loans. This paper tests the impact of using psychometric credit scoring as a substitute for collateral for loans up to US$7,500, via a randomized controlled trial with a microfinance institution in Ethiopia. The paper finds positive impacts on women’s access to credit, and survival of their firms during the COVID-19 pandemic and conflict. Firms that remained operational were profitable; but there is limited evidence of impact on firm growth under these circumstances. The study showcases the potential for using innovative technologies to extend entrepreneurial finance to underserved markets.
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“Alibhai, Salman; Cassidy, Rachel; Goldstein, Markus; Papineni, Sreelakshmi. 2022. Evening the Credit Score? Impact of Psychometric Loan Appraisal for Women Entrepreneurs. © World Bank. http://hdl.handle.net/10986/38320 License: CC BY 3.0 IGO.”
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