Black women can get loans just as easily as White men
Kush Azrael | 8/29/2013, 11:22 a.m.
Getting a loan is easier for Black women than White women, a study shows. According to the study’s lead author, University of Iowa sociologist, Sarah Harkness, lenders perceive Black women just as favorably as White men, and lend them as much money.
Harkness unveiled her study at the 108th Annual meeting of the American Sociological Association.
The study used previous research that suggested lending markets usually work against certain groups. “Evidence shows that disparities in funding outcomes are partially due to the actions of lenders,” said Harkness in the study. “I wanted to know what borrower characteristics lenders were picking up on.”
To find out if she was right, Harkness gave the study participants a hypothetical $1,000 and told them to look at financial loan applications and decide how much money to loan. Participants included hundreds of undergraduate students and graduates of west coast universities. The gender, race and education of the applicants varied, but the financial profile was the same.
She found that cultural stereotypes influenced how much money the study participants were willing to lend. Black men and White women were perceived more negatively and least likely to get the loan.
“This meant being less forgiving of small errors such as typos. It also meant making unfavorable assumptions about the nature of the applicants’ employment (whether it was temporary or permanent for example) and their level of intelligence,” according to a release on the study.
Black women and White males were looked at more positively. “There was an assumption that the Black woman was on her own raising a family, and was therefore, a motivated, hardworking and self-confident bread-winner,” said Harkness.
There was a preconceived notion that Black women would do their best to repay the loan. The White female borrower on the other hand was seen as not trustworthy by lenders.
The evidence seems to be tied to the “head of household.” Whoever lenders perceived as the breadwinners were the people getting the loans.
In this society, Black women are seen as heads of households since so many of them are single-parent households. Where as White men are seen the same, since they are more likely to live with their families according to statistics.
This causes lenders perceptions of Black women and White men to be predominantly positive, based on stereotypes.
In the case of White women the lenders seemed to have focused more on gender, and with the case of Black men the lenders may have focused more on race.
The information also shows that lenders viewed education as most important.