Gender Heterogeneity in Ease of Access to Credit: The Case of a Ghanaian MFI

Özet: Microfinance has been proposed as a way of bridging the gender gap in access to finance but the question that still remains is whether the gap is really closed or not. It is on record that in the formal financial sector, one of the causes of the gap is educational characteristics of households and owners of micro and small enterprises (MSEs) especially those in developing countries like Ghana. The question of whether education is an issue of easing access to credit in the informal sector has not been answered. The paper examines the effects of reading ability and level of schooling on ease of access to micro-credit among 485 women and men entrepreneurs in two districts in Ghana. The econometric estimation methods adopted in the study are probit and IV probit which corrects for possible endogeneity. Results show that controlling for other household covariates and enterprise characteristics, education of enterprise owners eases access to credit in the informal sector and there is significant difference in access to credit among men and women borrowers. Other sources of differences in access to micro-credit are past credit relationship of borrowers, location of borrowers and their businesses and household size. The paper offers recommendations from the supply side to promote sustainable micro-financing of SMEs in the informal sector.