Double bind in loan access in China: the reification of gender differences in business loans

Abstract

Purpose This paper aims to examine gender differences in credit access and credit default. Design/methodology/approach Using panel data drawn from 917 valid credit borrowers covering the period 2012 to 2015 drawn from among 6,849 study subjects and a national household financial survey (n = 29,500) conducted in China, this study focuses on gender differences in small and micro entrepreneurs’ financial behavior, specifically with respect to credit access and credit default. Findings The study revealed the following: Women expressed having more barriers to obtaining a business loan than men; gender had a significant effect on women’ credit default; and women were less likely to default a loan than male loan borrowers did. An exploration of the reasons for credit access and default found that female loan applicants were more likely to display a lack of knowledge and confidence in loan application. Originality/value The study contributes to literature by using the Marxian concept of reification in explaining women and their financial behaviors in China.