Bank credit, microfinance and female ownership: Are women more disadvantaged than men?

Using a comprehensive dataset on unlisted firms in 22 developing countries this paper analyses the relationship between gender, microfinance and access to bank credit. Using heckprobit to control sample selection bias, we reveal evidence of discrimination against female-owned and female-led firms. Also, we find that a mechanism for microfinance to empower women is facilitating loan applications and loan approvals for female-owned firms. Our paper highlights the importance of addressing gender discrimination in the credit market in order to facilitate the development of female-owned firms.

Automated summary

This study, using a comprehensive dataset of unlisted firms in 22 developing countries, reveals evidence of discrimination against female-owned and female-led firms, and suggests that microfinance can empower women by facilitating loan applications and approvals for female-owned firms. Therefore, addressing gender discrimination in the credit market is crucial for the development of female-owned firms.