Microfinance and Female Empowerment

Sylvain Dessy () and Jacques Ewoudou

Cahiers de recherche from CIRPEE

Abstract: In the informal economy of developing countries, female entrepreneurs face a comparative disadvantage for operating high-productivity activities, owing to the prevalence of patriarchal forms of business regulations. Yet, for microfinance institutions (MFIs) to succeed in enhancing female empowerment, increased access to credit must enable female entrepreneurs to tap into the range of high-productivity activities. So when the costs of legality are too high in developing countries, and the informal economy becomes the only affordable venue for operating a business venture, this paper shows that access to microfinancee services becomes only necessary, but not sufficient for female empowerment. Based upon a game-theoretic model of activity choices by ex ante homogeneous women, we argue that conditioning well-trained women's access to credit to the adoption of high-productivity activities may enable MFIs to induce the emergence of networks of female entrepreneurs large enough to mitigate patriarchal practices that raise the costs of operating such activities in the informal economy.

Keywords: Microfinance; female entrepreneurship; supermodular games (search for similar items in EconPapers)
JEL-codes: D13 J16 (search for similar items in EconPapers)
Date: 2006
New Economics Papers: this item is included in nep-cfn, nep-ent, nep-fmk and nep-mfd
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:lvl:lacicr:0603

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