Are Women More Credit Constrained? Experimental Evidence on Gender and Microenterprise Returns

This paper analyzes data from a randomized experiment on mean returns to capital in Sri Lankan micro-enterprises. The findings show greater returns among men than among women; indeed, returns were not different from zero for women. The authors explore different explanations for the lower returns among female owners, and find no evidence that the gender gap is explained by differences in ability, risk aversion, or entrepreneurial attitudes. Differential access to unpaid family labor and social constraints limiting sales to local areas are not important. However, there is evidence that women invested grants differently from men. A smaller share of the smaller grants remained in the female-owned enterprises, and men were more likely to spend the grant on working capital and women on equipment. The gender gap is largest when male-dominated sectors are compared with female-dominated sectors, although female returns are lower than male returns even for females working in the same industries as men. The authors examine the heterogeneity of returns to determine whether any group of businesses owned by women benefit from easing capital constraints. The results suggest there is a large group of high-return male owners and a smaller group of poor, high-ability, female owners who might benefit from more access to capital.

Bibliographic Details

Main Authors:	de Mel, Suresh, McKenzie, David, Woodruff, Christopher
Format:	Policy Research Working Paper biblioteca
Language:	English
Published:	World Bank, Washington, DC 2008-10
Subjects:	ACCESS TO BANK, ACCESS TO BANK LOANS, ACCESS TO CAPITAL, ACCESS TO CREDIT, ACCESS TO FINANCE, ACCESS TO FORMAL FINANCE, ACCOUNTING, ACHIEVEMENT MOTIVATION, AGRICULTURE, AMOUNT OF CAPITAL, ASSET ACCUMULATION, ASSET OWNERSHIP, BANKS, BEST PRACTICES, BORROWING, BUSINESS EXPERIENCE, BUSINESS NETWORKS, BUSINESS OWNER, CAPITAL CONSTRAINTS, CAPITAL FLOWS, CAPITAL INJECTION, CAPITAL INVESTMENTS, CAPITAL MARKET, CAPITAL STOCK, CAPITAL STOCKS, CARE FOR CHILDREN, CASH PAYMENT, COLLATERAL, CONSUMERS, CREDIT CONSTRAINTS, CREDIT MARKET, CREDIT MARKETS, CREDIT UNIONS, CURRENT ACCOUNT, CURRENT EXPENDITURE, CUSTOMER BASE, DECISION MAKING, DEMAND FOR CREDIT, DEPOSIT ACCOUNT, DEVELOPING COUNTRIES, DEVELOPMENT BANK, DEVELOPMENT ECONOMICS, DIMINISHING RETURNS, DUMMY VARIABLE, DUMMY VARIABLES, DURABLE, DURABLE ASSETS, DURABLE GOODS, EARNINGS, ECONOMIC DEVELOPMENT, ECONOMIC EFFICIENCY, ECONOMIC GROWTH, EDUCATION LEVELS, ELDERLY PARENTS, EMPOWERMENT, ENTREPRENEUR, ENTREPRENEURIAL ABILITY, ENTREPRENEURIAL ATTITUDES, ENTREPRENEURS, EQUAL AMOUNTS, EQUALITY, EQUIPMENT, EQUIPMENT PURCHASE, EQUIPMENT PURCHASES, EXPENDITURE, EXPENDITURES, FAMILY MEMBERS, FATHER, FEMALE, FEMALE BORROWERS, FEMALE ENTERPRISE, FEMALE ENTERPRISES, FEMALE ENTREPRENEURS, FEMALE WORKERS, FEMALE-OWNED BUSINESSES, FEMALES, FINANCIAL ASSETS, FINANCIAL INSTITUTION, FINANCIAL LITERACY, FINANCIAL SERVICES, FINANCIAL SUPPORT, FIRM PERFORMANCE, FIXED DEPOSIT, FORMAL CREDIT, FORMAL LOAN, FUTURE RESEARCH, GENDER, GENDER ANALYSIS, GENDER DIFFERENCE, GENDER DIFFERENCES, GENDER EQUALITY, GENDER GAP, GENDERS, HEALTH CARE, HOUSEHOLD ASSET ACCUMULATION, HOUSEHOLD BARGAINING, HOUSEHOLD BUSINESS, HOUSEHOLD EXPENDITURE, HOUSEHOLD EXPENDITURES, HOUSEHOLD INCOME, HOUSEHOLDS, HUSBAND, HUSBANDS, ILLNESS, INCOMPLETE MARKETS, INFLATION, INITIAL FUNDING, INITIAL INVESTMENTS, INSTRUMENT, INSURANCE, INSURANCE MARKETS, INTEREST RATE, INTEREST RATES, INTERNATIONAL BANK, INVENTORIES, INVENTORY, INVESTING, INVESTMENT BEHAVIOR, INVESTMENT DECISIONS, INVESTMENT OPPORTUNITIES, LABOR FORCE, LABOR FORCE PARTICIPATION, LABOR FORCE SURVEY, LABOR HOURS, LABOR MARKET, LENDERS, LIQUIDITY, LOAN, LOAN AMOUNT, LOANS FROM FAMILY, LOTTERY, LOW-INCOME, MARKET INTEREST RATE, MARKET INTEREST RATES, MARKET VALUE, MICRO-ENTERPRISES, MICRO-LOANS, MICROCREDIT, MICROENTERPRISES, MICROFINANCE, MOTHER, OLDER CHILDREN, PHYSICAL CAPITAL, POLITICAL ECONOMY, POVERTY ALLEVIATION, PRICE INDEX, PRICE INDICES, PRIVATE BANK, PRODUCTION FUNCTION, PRODUCTIVITY, PROFITABLE INVESTMENT, PROFITABLE INVESTMENTS, REINVESTMENT, RESEARCH ASSISTANCE, RESOURCE ALLOCATION, RESPONSIBILITIES, RETIREMENT, RETURN, RETURN ON INVESTMENT, RETURNS, RISK AVERSE, RISK AVERSION, RISK-AVERSE INDIVIDUALS, SALES, SAVINGS, SAVINGS ACCOUNT, SELF EMPLOYMENT, SELF-EMPLOYMENT, SMALL ENTERPRISES, SOURCE OF INCOME, SOURCE OF INFORMATION, START-UP, SUPPLY OF CREDIT, TYPES OF ASSETS, UMBRELLA ORGANIZATION, VILLAGE, WAGE, WEALTH, WOMEN ENTREPRENEURS, WORKING AGE, WORKING CAPITAL, Microdata Set,
Online Access:	http://documents.worldbank.org/curated/en/2008/10/9903470/women-more-credit-constrained-experimental-evidence-gender-microenterprise-returns http://hdl.handle.net/10986/6933
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