Women Face a Borrowing Hurdle in Denmark, Central Bank Finds

Women who own businesses in Denmark have been paying higher interest rates on their loans than their male counterparts, according to a working paper by the central bank.

The study found that women in Denmark, which has had negative central bank rates longer than any other country, pay 1 percentage point more, on average, than men.

The bank said there was some evidence of differing risk profiles that might explain the gap. Women tend to prefer to start private limited companies, which often entails paying higher rates on loans than public limited companies incur. But beyond that, the difference “cannot be explained,” the central bank said in a report on Friday.

“The analysis shows that a variable that should be of no significance, namely the gender of the borrower, plays a role for the interest rate on corporate loans,” the bank said.

The study noted that men generally hold more assets than women, in part because they tend to be more active stock investors, which could lead to better negotiated rates on loans. The bank suggested that their higher average net worth might make it easier for men to get lower rates when they borrow. It also suggested that men are more likely than women to turn their backs on initial offers to hunt for better ones.

The data set was compiled in June last year, and includes 45,000 active loans to small and medium-sized businesses in Denmark.

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