The Equal Credit Act of 1974 guaranteed equal treatment for women seeking financing, but many women still lack full access to traditional banking services like personal loans, credit cards, auto loans, and mortgages. Why?
For starters, women still make roughly 82 cents for every dollar their male counterparts do, so some are rejected because their income is too low. The gap is even wider for many women of color, even when adjusted for education. For instance, Black and Latina women with only a bachelor’s degree earn 65% of what men with similar education do, and Black women with advanced degrees earn 70% of what white men with advanced degrees earn. Women earn less than men in nearly all occupations, and they have been especially hard hit by the pandemic. During the COVID-19 crisis, many women were forced out of the labor force by layoffs and a lack of childcare. In February 2021, only about 55.8% of eligible women were working – the same rate as April 1987.1
For these reasons and countless others, women have historically had less access to lines of credit than men. A recent study by the Federal Reserve Bank found that male borrowers have credit card limits that are, on average $1,323 or 4.5%2 higher than the ones women have, even after adjusting for credit score, income and other demographic characteristics.3
Kashable loans can be the first step towards establishing credit
Offering a Kashable lending program at your company helps women take the first step towards establishing credit by borrowing money backed by their monthly paychecks. Because of this structure, Kashable is able to provide credit to over 90% of applicants that work at participating employers — compared to banks who approve 26.5% of borrowers with a low or no credit score.4 Rates on Kashable loans currently range from 6.00% to 35.99%, depending on the borrower’s financial circumstances, far lower than other non-bank sources of credit.
Small loans can have a positive effect on women’s lives. “Thanks to Kashable I was able to pay for my car repairs that would have not been possible otherwise,” says Catherine, a Kashable borrower. “I would have had to borrow from my 401k to pay what was needed to get my car fixed.”
Plus, having low-cost financing available can give peace of mind to employees. “Knowing I have the ability to get a loan through Kashable at a low rate gives me a sense of relief,” shares Angela, another Kashable borrower.
But these loans can have a longer-term effect as well, as employees build a credit history that may eventually allow them to take out a mortgage or borrow for educational opportunities for themselves or their children. Our data shows that 80% of those who previously had no credit score had one by the time they paid off their Kashable loan, and 64% of repeat borrowers saw an increase in their credit scores.5
Women — especially at the lower-income brackets — have historically faced significant barriers to accessing credit. By offering a Kashable financial wellness benefits, your company can help them take the first steps toward long-lasting financial security.
[1] “5 Facts About the State of the Gender Pay Gap,” Department of Labor, March 21, 2021. https://blog.dol.gov/2021/03/19/5-facts-about-the-state-of-the-gender-pay-gap
[2] Decomposing Gender Differences in Bankcard Credit Limits, Federal Reserve Bank of Philadelphia https://www.philadelphiafed.org/-/media/frbp/assets/working-papers/2021/wp21-35.pdf
[3] “Men tend to have higher total credit limits than female borrowers, research finds,” CNBC, November 9, 2021. https://www.cnbc.com/2021/11/09/men-tend-to-have-higher-credit-limits-than-female-borrowers.html
[4] https://blog.kashable.com/report-k“Personal Loan Rates and Debt Statistics: 2022,” Nerd Wallet, March 2, 2022. https://www.nerdwallet.com/article/loans/personal-loans/personal-loan-statistics
[5] Kashable data from borrowers from May, 2016 to February, 2021