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Evening the Credit Score ? Impact of Psychometric Loan Appraisal for Women Entrepreneurs

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  • Alibhai,Aly Salman
  • Cassidy,Rachel Margaret
  • Goldstein,Markus P.
  • Papineni,Sreelakshmi

Abstract

Women’s lower rates of ownership of collateralizable assets are a constraint to accessing largerbusiness loans. This paper tests the impact of using psychometric credit scoring as a substitute for collateralfor loans up to US$7,500, via a randomized controlled trial with a microfinance institution in Ethiopia. The paper findspositive 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 thesecircumstances. The study showcases the potential for using innovative technologies to extend entrepreneurial finance tounderserved markets.

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  • Alibhai,Aly Salman & Cassidy,Rachel Margaret & Goldstein,Markus P. & Papineni,Sreelakshmi, 2022. "Evening the Credit Score ? Impact of Psychometric Loan Appraisal for Women Entrepreneurs," Policy Research Working Paper Series 10230, The World Bank.
    • Handle: RePEc:wbk:wbrwps:10230
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    Cited by:

    1. Aletheia Amalia Donald & Islam,TM Tonmoy & Anja Robakowski-Van Stralen, 2024. "Explaining Gender Differences in Economic Outcomes in Burkina Faso," Policy Research Working Paper Series 10809, The World Bank.

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