Mayada M. Baydas

Discrimination against women in formal credit markets: Reality or rhetoric?

Abstract Microenterprises receive several forms of aid but many still report limited access to formal finance. It is often argued that women entrepreneurs face discrimination in formal credit markets. In this study of Ecuadorian microenterprises, the results of a multinomial logit model show that although a smaller number of women than men entrepreneurs applied for loans, a larger percentage of women than men typically apply for loans. The equally small probabilities of both male and female entrepreneurs being quantity rationed for loans implies that this form of credit rationing is not widely practiced in special microenterprise programs in Ecuador.

Credit rationing in small‐scale enterprises: Special microenterprise programmes in ecuador

Small‐scale enterprises receive several forms of aid, but many are denied access to formal loans. A demand and supply model is estimated to analyse the factors lenders use to ration credit in special microenterprise programmes. The results reveal that suppliers do not discriminate against less profitable enterprises and entrepreneurs who have not completed their high school education; however, these entrepreneurs have a smaller demand for external finance from the microenterprise programmes than more profitable enterprises and entrepreneurs who have graduated from high school.

Informal finance in Egypt: “Banks” within banks

Abstract Policy makers often assume that individuals using informal finance are forced to do so because they lack access to formal financial services. Research in a large agricultural bank in Egypt, however, showed that many of its employees participated in informal finance. Interviews with villagers in a community with a branch of the bank also showed extensive involvement in informal finance. The popularity of informal finance among people with easy access to banks suggests that formal finance in Egypt may not be providing the types of financial services that people demand and they therefore, create these services informally.