Accept or Reject : Do Immigrants Have Less Access to Bank Credit? Evidence from Swedish Pawnshop Customers

This paper studies to what extent immigrants have less access to mainstream credit than their native counterparts. For this purpose I use a large, unique data set with a panel of Swedish pawnshop customers. The data allow me to investigate to what extent pawnshop customers actively apply for mainstream bank credit and how successful they are by comparing credit applications from immigrants and natives and the corresponding bank decisions. I do not find that immigrants have a different propensity to apply for mainstream bank credit. However, I do find that banks have a lower propensity to grant loans to immigrants from African descent compared to their Nordic-born counterparts. Robustness tests based on data from recent immigrants only suggest that the demand for credit varies with the duration of residence while differences in loan-granting rates are enduring