Key Evidence

The rapid growth of digital credit has outpaced consumer protection frameworks in many markets, creating environments where predatory practices are difficult to detect, remedy, or measure, particularly by sex. The absence of regulatory oversight has allowed practices that would be prohibited in formal banking to proliferate in the digital lending sector.

• Digital credit and embedded finance can expand access to working capital for women, but they can also scale over-indebtedness, mis-selling, data misuse, and weak redress mechanisms. Responsible digital credit requires practical safeguards across the entire customer journey—from loan offer to repayment—to manage these risks. (CGAP, 2025) 
• Predatory and unauthorized digital lending apps intrusively harvest customer data and target financially distressed borrowers with expensive loans. When borrowers cannot repay, lenders deploy abusive debt collection tactics—including social shaming—to force repayment, a practice that falls disproportionately on women. Without adequate redress mechanisms, borrowers cannot renegotiate terms and instead take on additional loans to cover existing ones, deepening over-indebtedness. (CGAP, 2022)

Sex-disaggregated evidence on predatory lending’s direct, differential impact on women remains limited. Structural factors such as lower digital and financial literacy, higher reliance on informal and digital credit, and borrowing for welfare needs, however, suggest that women face heightened vulnerability to predatory lending. 

• Gender-based discrimination in formal credit markets is well-documented and compounds women's vulnerability to informal and digital credit. In Turkey, 35% of loan officers surveyed showed gender bias, with women awarded $14,000 less on otherwise identical applications; a separate study found women were 30% more likely to be asked for a guarantor. In Chile, women's loan requests were 18.3% less likely to be approved — dropping further for officers with stronger pro-male preferences. In Uganda, gender bias against individual female entrepreneurs was driven by beliefs about women's entrepreneurial abilities. The cumulative effect is to push women away from regulated formal credit and toward digital and informal channels where consumer protections are weakest. (IPA 2025)