How #MeToo led to improved loan access for women

By Kevin Manne

BUFFALO, N.Y. —  Social movements often spark collective action, and after #MeToo brought awareness to sexual harassment and assault, one unexpected but positive outcome emerged: female borrowers received loans more quickly, according to new research from the University at Buffalo School of Management.

The study, which was recently nominated for a Best Paper award at the International Conference on Information Systems, found that female borrowers on peer-to-peer lending platform Kiva were funded more quickly after #MeToo rose to prominence in 2017 — and that rate continued to rise as the number of high-profile #MeToo events increased.

“How long it takes to get a loan approved is important, especially for economically disadvantaged borrowers where funding delays may be critical,” says study co-author Cristian Tiu, PhD, associate professor of finance in the UB School of Management. “Faster approval times are a meaningful expansion of credit access, with the potential to provide funds precisely when they matter most.”

The researchers analyzed more than 200,000 Kiva records covering loans issued six months both before and after Oct. 15, 2017, the flashpoint of the #MeToo movement. Using machine learning and a difference-in-differences analysis to compare similar groups and measure changes over time, the researchers examined whether loans to women were funded faster after #MeToo while controlling for loan characteristics, borrower demographics, country-level gender inequality and application volume. 

Through their analysis, they discovered that loans to female borrowers on Kiva were funded approximately 30% faster for the six months after the #MeToo flashpoint than the six months prior.      

Their findings also show that social awareness can become economic action, and that digital financial platforms may play a key role in turning cultural shifts into faster, more equitable access to resources.

“In addition to shifting attitudes and raising awareness, large social movements like #MeToo can also measurably influence financial decision-making, in this case by speeding up access to credit for women,” says study co-author Charles Lindsey, PhD, associate professor of marketing in the UB School of Management. “These findings open the door for researchers and policymakers to examine other social movements for similar market-level effects.”

Lindsey and Tiu collaborated on the study with UB School of Management colleague Raj Sharman, PhD, professor of management science and systems; along with Lavlin Agrawal, PhD, assistant professor of business information and systems at the North Carolina Agricultural and Technical State University; and Ciara Heavin, PhD, chair of business analytics in the University College Cork Business School.