Female Entrepreneurship, Access to Credit, and Firms’ Productivity in Senegal

ABSTRACT

Despite an increase in the share of female-owned existing and new start-up firms in Senegal, there is still wide belief that female entrepreneurs are discriminated against in the credit market. This paper empirically investigates such gender-based discrimination, and the extent to which it might be translated into lower performance. Using firm-level data and a methodological approach that consists of the data envelopment analysis, an endogenous switching regression and a propensity score matching, the paper suggests that there is no such thing as gender-based discrimination, and to the extent that they benefit from credit, female reap equal returns from the funds, efficiency-wise. These results do not however call for the abandonment of gender-biased public policies aiming at promoting access to credit and entrepreneurship, but suggest they be grounded on more robust footings such as managers’ education, firms’ ownership, sectorial activities, and geographical locations.

KEYWORDS:

• Gender
• female entrepreneurs
• access to credit
• firms’ performance
• Senegal

JEL:

• G21
• J16
• L25

Acknowledgements

This research work was carried out with financial and scientific support from the Partnership for Economic Policy (PEP) (www.pep-net.org) with funding from the Department for International Development (DFID) of the United Kingdom (or UK Aid), and the Government of Canada through the International Development Research Center (IDRC).

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ The Sub-Saharan average is 35.0% (Source: World Bank’s Entreprises Survey, http://www.enterprisesurveys.org/data/exploreTopics/Gender, accessed on December 11, 2014).

² Government initiatives to promote credit access, with a gender dimension, includes the newly established “Fonds de Garantie des Investissements Prioritaires – FONGIP” by which the government essentially acts as co-signee alongside firms in their loan application.

³ The support of Trust Africa is gratefully acknowledged.

Additional information

Funding

This work was supported by the Partnership for Economic Policy (PEP) [PMMA-12576].