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Empowering the Vulnerable to Be Entrepreneurs: An Empirical Test on the Effectiveness of the Ghana Microfinance Policy 2006

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  • Diaz-Serrano, Luis

    (Universitat Rovira i Virgili)

  • Sackey, Frank Gyimah

    (Universitat Rovira i Virgili)

Abstract

The study aims at testing the Ghana Microfinance Policy set up to support the vulnerable through access to credit. We resort to the Blinder-Oaxaca decomposition to determine if there is positive discrimination in favor of women and young entrepreneurs in the rationing behavior of the microfinance companies. This is what we should expect if the policy is effective. Our results show that even after controlling for a large number of borrower characteristics, microfinance type and credit worthiness variables, there is positive discrimination that favors female and young entrepreneurs as this discrimination is largely determined by the differential treatment these groups receive in respect of men and older borrowers from microfinance institutions. Our results show that the Government microfinance is the most severe in the rationing behavior towards the discriminating groups.

Suggested Citation

  • Diaz-Serrano, Luis & Sackey, Frank Gyimah, 2016. "Empowering the Vulnerable to Be Entrepreneurs: An Empirical Test on the Effectiveness of the Ghana Microfinance Policy 2006," IZA Discussion Papers 10323, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp10323
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    References listed on IDEAS

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    More about this item

    Keywords

    credit rationing; Ghana; microfinance; positive discrimination;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination

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