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Another Perspective on Gender Specific Access to Credit in Africa

Author

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  • Henrik Hansen

    () (Institute of Food and Resource Economics, University of Copenhagen)

  • John Rand

    () (Institute of Food and Resource Economics, University of Copenhagen)

Abstract

Using firm level data from eight Sub-Saharan Africa countries we examine credit constraint differentials between male and female manufacturing entrepreneurs. Enterprises owned by female entrepreneurs are less likely to be credit constrained compared to their male counterparts. The magnitude of this credit constraint gap varies with constraint and ownership definitions but the direction of the gap does not. Using a generalized Blinder-Oaxaca decomposition, we investigate if the gap is due to differences in observable characteristics or to unexplained variations in the returns to these characteristics. We find the gap to be associated with the unexplained component. We argue that the finding is mainly due to female gender favoritism in loans to micro and small firms because (i) the gap is reversed for medium size enterprises and, (ii) we find no sign of superior female entrepreneurial performance in terms of capacity utilization, labor productivity or firm size growth.

Suggested Citation

  • Henrik Hansen & John Rand, 2011. "Another Perspective on Gender Specific Access to Credit in Africa," IFRO Working Paper 2011/14, University of Copenhagen, Department of Food and Resource Economics.
  • Handle: RePEc:foi:wpaper:2011_14
    as

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    File URL: http://okonomi.foi.dk/workingpapers/WPpdf/WP2011/WP_2011_14_gender_specific_credit.pdf
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    References listed on IDEAS

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    1. Arne Bigsten & Paul Collier & Stefan Dercon & Marcel Fafchamps & Bernard Gauthier & Jan Willem Gunning & Abena Oduro & Remco Oostendorp & Cathy Patillo & Måns S–derbom & Francis Teal & Albert Zeufack, 2003. "Credit Constraints in Manufacturing Enterprises in Africa," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 12(1), pages 104-125, March.
    2. Buvinic, Mayra & Berger, Marguerite, 1990. "Sex differences in access to a small enterprise development fund in Peru," World Development, Elsevier, vol. 18(5), pages 695-705, May.
    3. Arne Bigsten & Mans Söderbom, 2006. "What Have We Learned from a Decade of Manufacturing Enterprise Surveys in Africa?," World Bank Research Observer, World Bank Group, vol. 21(2), pages 241-265.
    4. Ben Jann, 2008. "A Stata implementation of the Blinder-Oaxaca decomposition," ETH Zurich Sociology Working Papers 5, ETH Zurich, Chair of Sociology, revised 14 May 2008.
    5. Fafchamps, Marcel, 2000. "Ethnicity and credit in African manufacturing," Journal of Development Economics, Elsevier, vol. 61(1), pages 205-235, February.
    6. Aterido, Reyes & Beck, Thorsten & Iacovone, Leonardo, 2011. "Gender and finance in Sub-Saharan Africa : are women disadvantaged ?," Policy Research Working Paper Series 5571, The World Bank.
    7. Bruce Byiers & John Rand & Finn Tarp & Jeanet Bentzen, 2010. "Credit demand in Mozambican manufacturing," Journal of International Development, John Wiley & Sons, Ltd., vol. 22(1), pages 37-55.
    8. Van Biesebroeck, Johannes, 2005. "Exporting raises productivity in sub-Saharan African manufacturing firms," Journal of International Economics, Elsevier, pages 373-391.
    9. Arne Bigsten & Måns Söderbom, 2011. "Industrial Strategies for Economic Recovery and Long-term Growth in Africa," African Development Review, African Development Bank, vol. 23(2), pages 161-171.
    10. Fisman Raymond J, 2003. "Ethnic Ties and the Provision of Credit: Relationship-Level Evidence from African Firms," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 3(1), pages 1-21, October.
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    Citations

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    Cited by:

    1. O’Toole Conor M., 2014. "Does Financial Liberalisation Improve Access to Investment Finance in Developing Countries?," Journal of Globalization and Development, De Gruyter, vol. 5(1), pages 1-34, June.
    2. Casey, Eddie & O'Toole, Conor, 2013. "Bank-lending constraints and alternative financing during the financial crisis: Evidence from European SMEs," Papers WP450, Economic and Social Research Institute (ESRI).
    3. Terrence Kairiza & Philemon Kiprono & Vengesai Magadzire, 2017. "Gender differences in financial inclusion amongst entrepreneurs in Zimbabwe," Small Business Economics, Springer, vol. 48(1), pages 259-272, January.
    4. Casey, Eddie & O'Toole, Conor M., 2014. "Bank lending constraints, trade credit and alternative financing during the financial crisis: Evidence from European SMEs," Journal of Corporate Finance, Elsevier, vol. 27(C), pages 173-193.
    5. repec:unu:wpaper:wp2012-67 is not listed on IDEAS

    More about this item

    Keywords

    Credit; Entrepreneurship; Gender; Private Sector; SMEs;

    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
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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