Do Women Make Better Borrowers and Loan Officers? Evidence From Afghanistan

This study explores how gender is associated with microfinance loan performance in Afghanistan, a conservative and conflict-affected society. We use data from over 9500 borrowers across Taliban- and government-controlled areas for the period from January 2017 to February 2020, before the 2021 Taliban takeover. We analyse how borrower and loan officer gender are related to loan outcomes. Contrary to prevailing literature, our findings reveal that female borrowers exhibit lower loan performance compared to male borrowers, which we attribute to structural barriers such as restricted mobility, limited business opportunities and poor access to education. Female loan officers are associated with higher loan performance on average. A key finding is evidence for a matching channel: female borrowers are substantially less likely to default when paired with female loan officers, and this effect is particularly pronounced in government-controlled areas. The results highlight the value of gender-sensitive staffing and borrower-officer assignment policies for microfinance in challenging environments.