Abstract
The paper introduces the concept of organizational network interface—an individual who belongs to the intra-organizational network and at the same time connects to outside economic actors on behalf of this organization. We apply this concept—that incorporates both the function in the network and the features of individuals performing the function—to consider the costs that organizational network interfaces can present to the organization, focusing on the costs related to how information is transferred through the organizational network interface due to the characteristics of the interface. We categorize the potential mechanisms through which employees acting as interfaces can impact organization-level outcomes into six classes and take one mechanism representative of each class in the setting of microfinance organizations. We consider the six mechanisms jointly to verify whether previously reported association between women loan officers and higher rates of loan defaults in a single bank can be observed at the organizational level in a broad sample across forty-eight countries and to test which of the mechanisms are driving it. The results show that an average microfinance organization indeed experiences a higher rate of loan defaults when the percentage of women loan officers is higher but find no support for the mechanism of borrowers’ gender bias suggested by previous research. Instead, the effect is driven by the mechanisms of the educational disparity between men and women, overcorrection by women towards risk-taking in professional environments, and likely amplification of the latter effect through the interaction of women loan officers and women managers.