Project information
PIERI-12883 Barriers limiting access to financial services for micro and small entrepreneurs in Bolivia: A randomized lab-field experiment on institutional ethnic discriminatory practices


Recently, the Bolivian government issued regulations for eliminating market barriers to credit access for micro and small enterprises. Despite these efforts, there still may be discriminatory practices limiting the access of financial services for vulnerable sectors of the population, being Bolivia a country composed of several indigenous ethnic minorities who can be victims of discrimination from credit officers when asking for a loan, particularly if they have linguistic limitations due to her/his ethnic language. As there are no records of ethnicity in credit scoring, it is not possible to use administrative information from financial institutions to assess the extent of discriminatory practices during loan provision. Nevertheless, field experiments in financial institutions are useful to evaluate if ethnic discrimination is a barrier limiting access to financial services for micro and small entrepreneurs of Bolivia. Our null hypothesis is that there is no significant difference in credit access between credit applicants with indigenous ethnic characteristics compared to credit applicants without indigenous ethnic characteristics. A field experiment can be used to test this hypothesis if micro and small entrepreneurs with and without indigenous ethnic characteristics request loans in randomly selected financial institutions of Oruro, a department of Bolivia. The random sample size was chosen to find a standardized effect size of 0.49 with a statistical power of 80%. The Ministry of Development Planning, the Ministry of Economics of Finance and microfinance institutions of Bolivia will be interested in knowing how ethnicity is influencing lending, as credit allocation for development will not be optimal if discriminatory practices arbitrarily distort credit provision.

 Gabriela Aguilera Lizarazu
 Andrea Rojas Hosse  |  Boris A. Luna Acevedo  |  Patricia Aranda  |  Rolando Gonzales  |
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