Access to Financing for Productive Employment Opportunities for Women in Rural Benin

38 Pages Posted: 13 Aug 2021

See all articles by Rose Fiamohe

Rose Fiamohe

Africa Rice Center (WARDA)

Sènakpon Fidèle Ange Dedehouanou

affiliation not provided to SSRN

Abdelkrim Araar

Université Laval

Nabilatou BouraÏma

Université d’Abomey-Calavi

Akoua Ella Félicie Djo

Université d’Abomey-Calavi

Date Written: April 11, 2021

Abstract

Government and financial institutions have attempted to address low financial inclusion in the development of sustainable microenterprises in rural Benin, especially with regard to women. In general, however, their actions have not been guided by evidence regarding the design of financing schemes intended to boost rural, women-owned enterprises. This paper reports on the relationship between various financing schemes in rural Benin and the economic performance of women-owned enterprises. Using an extended multinomial, endogenous-switching-regression selection-bias-correction model on a representative sample of rural microenterprises, we find that social-network-based financing improves the business performance of rural women entrepreneurs in small-scale commerce more than any other alternative financing scheme in any sector. This is particularly true for microenterprises managed by adult women and by women with a primary-school education level. Formal credit-based financing increases the profit margins of mature microenterprises led by rural women or that employ salaried workers, as well as of all businesses that operate on the basis of credit obtained from social-network-based financing. Finally, our study shows that self-financing is more profitable for young rural women entrepreneurs than other financing alternatives. Our results call for policies that target experienced women microenterprises for innovative microfinancing programs and young women entrepreneurs for subsidy programs.

Keywords: microenterprise, microfinancing, gender, rural, Benin

JEL Classification: G32, J16, M21, L25, O12

Suggested Citation

Fiamohe, Rose and Dedehouanou, Sènakpon Fidèle Ange and Araar, Abdelkrim and BouraÏma, Nabilatou and Djo, Akoua Ella Félicie, Access to Financing for Productive Employment Opportunities for Women in Rural Benin (April 11, 2021). Partnership for Economic Policy Working Paper No. 2021-07, Available at SSRN: https://ssrn.com/abstract=3903417 or http://dx.doi.org/10.2139/ssrn.3903417

Rose Fiamohe (Contact Author)

Africa Rice Center (WARDA) ( email )

01 B.P. 2031
Cotonou Benin
South Africa

Sènakpon Fidèle Ange Dedehouanou

affiliation not provided to SSRN

No Address Available

Abdelkrim Araar

Université Laval ( email )

2214 Pavillon J-A. DeSeve
Quebec, Quebec G1K 7P4
Canada

Nabilatou BouraÏma

Université d’Abomey-Calavi ( email )

Benin

Akoua Ella Félicie Djo

Université d’Abomey-Calavi ( email )

Benin

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