Empowering the Vulnerable to Be Entrepreneurs: An Empirical Test on the Effectiveness of the Ghana Microfinance Policy 2006

Luis Diaz-Serrano () and Frank Gyimah Sackey ()
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Luis Diaz-Serrano: Universitat Rovira i Virgili
Frank Gyimah Sackey: Universitat Rovira i Virgili

No 10323, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: The study aims at testing the Ghana Microfinance Policy set up to support the vulnerable through access to credit. We resort to the Blinder-Oaxaca decomposition to determine if there is positive discrimination in favor of women and young entrepreneurs in the rationing behavior of the microfinance companies. This is what we should expect if the policy is effective. Our results show that even after controlling for a large number of borrower characteristics, microfinance type and credit worthiness variables, there is positive discrimination that favors female and young entrepreneurs as this discrimination is largely determined by the differential treatment these groups receive in respect of men and older borrowers from microfinance institutions. Our results show that the Government microfinance is the most severe in the rationing behavior towards the discriminating groups.

Keywords: credit rationing; Ghana; microfinance; positive discrimination (search for similar items in EconPapers)
JEL-codes: G21 J16 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2016-10
New Economics Papers: this item is included in nep-ent, nep-mfd and nep-pke
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