panel A2 of Table 15). In urban areas those that claim not to need a loan are the ones who are richer in all three dimensions (see panel B2 of Table 15). Across the CIW distribution, the median interest rate charged is considerably higher for the poor than for the rich in both rural and urban areas (see panels A3 and B3 of Table 15). For example among the consumption poor in rural areas the interest rate is 10%, while among the rich it is 5%.

Finally, it must be noted that the fact that urban households have higher loan application rates and an overall larger ability to borrow does not necessarily imply larger consumption insurance in urban areas than in rural areas. To link credit to consumption insurance we must dig deeper into the motives to borrow, which are available in the survey. We note that there are 45/18=3.6 times more loans acquired for start-up capital than for consumption in urban areas, while this ratio is much less, 1.6, in rural areas. This suggests that in urban areas, relative to rural areas, borrowing is used to target production activities rather than for consumption insurance purposes.

# **5.5 Societal Systems**

Malawi is a particularly interesting country to explore the role of gender in macroeconomics<sup>69</sup> as it has two clearly distinct societal systems: one matrilineal and matrilocal, and the other patrilineal and patrilocal. In patrilineal societies the wives join their husbands in the husband’s village. In matrilineal societies, the husbands join their wives in the wife’s village. We find that a large proportion of households in Malawi are headed by women, and quite a few by divorced women. Among the rural households in our sample, 26% are headed by women: 38% of these women are divorced and 46% are widows. In urban areas, the percentage of households headed by women is lower, 18%, but the proportion of divorced and widowed women is similar. On the other hand, there are very few households headed by divorced or widowed men: 3% of all households, and a negligible proportion is headed by men or women who never married. The majority of households are monogamous households headed by men, 65%, and there is also a sizable minority of polygamous households, 6%.<sup>70</sup> As we discuss next, the phenomenon of women as household heads is more prominent in the matrilineal south of Malawi.

In Malawi, different regions are associated with different societal systems. The north is patrilineal, the south is matrilineal, and the center has a mix of societal systems.<sup>71</sup> The clear

> 69See a general discussion in Tertilt (2012).

> 70In the online appendix we explore the composition of each quantile by its gender and marital status for Malawi in Table B-20, Tanzania in Table B-21, and Uganda in Table B-22

> 71In the IHS3 survey the information on societal systems is not provided by household but in the community questionnaire, in which a local knowledgeable informant reports the percentage of households in each enumeration area that are matrilineal and patrilineal. We have defined an enumeration area as patrilineal if the informant reported that at least 80% of households in that enumeration area were patrilineal; we have then coded these households as patrilineal. We have defined matrilineal households analogously. Households have been declared

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