Is Crowdfunding Different? Evidence on the Relation between Gender and Funding Success from a German Peer-to-Peer Lending Platform

Abstract

According to the literature on traditional banking, lenders often discriminate against female borrowers. However, studies of peer-to-peer lending in the United States find that female borrowers have better chances of obtaining funds than do males. We provide evidence on the success of female borrowers at a large German peer-to-peer lending platform. Our results show that there is no effect of gender on the individual borrower's chance to receive funds on this platform, ceteris paribus. Several robustness checks confirm this finding. Hence, female discrimination seems to be eased by the 'wisdom of the lending crowd'.JEL classification: G11, J16, G20.

Small Business Borrowing and Peer‐to‐peer Lending: Evidence From Lending Club

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Women entrepreneurs’ financing revisited: taking stock and looking forward

“…Further, their analysis confirmed a clear pattern of women investors preferring women-led projects, indicating that women entrepreneurs indeed may profit from new funding trends. This is illustrated by other studies, demonstrating that gender differences seem to be overcome by the "wisdom of the lending crowd" (Barasinska and Schäfer 2014). Gorbatai and Nelson (2015) suggest that the communication style and language of crowdfunding platforms favour women, again pointing to the need to apply different research techniques which allow us to analyse the gendered impact of hitherto neglected factors influencing access to finance, such as language and individual sense-making.…”

The Case of Crowdfunding in Financial Inclusion: A Survey

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