Decision-Making by Women in Mortgage Repayment: Bargaining versus Tokenism

We study intra-household financial decision-making using a mortgage scheme specifically designed for women by India’s largest lender, the State Bank of India. The scheme offered a 5 bps discount for loans to women and increased the share of female borrowers by 25% within one year. We test whether this rise reflects bargaining or tokenism. Female loans under the scheme show lower default risk and more optimal repayment behavior during the COVID moratorium, consistent with enhanced financial bargaining power. Our findings suggest that small financial incentives can strengthen women’s bargaining power and improve household financial decisions.