Blended Finance and Female Entrepreneurship

Halil Ibrahim Aydin, Cagatay Bircan and Ralph De Haas

Working Papers from Research and Monetary Policy Department, Central Bank of the Republic of Turkey

Abstract: Blended finance programs combine public and private funding to ease credit constraints of specific firm segments. While rapidly gaining popularity, little evidence exists on their economic impact. To address this gap, we match credit registry data with firm level tax records to trace out the impacts of a blended finance program for female entrepreneurs in Türkiye. Using a synthetic difference-in-differences estimator, we show that participating banks durably increase lending to women-both in absolute terms and relative to male entrepreneurs. The average treatment effect on treated banks' share of lending to female entrepreneurs is 22 per cent. Banks expand credit to existing borrowers, poach clients from competitors, and crowd in first-time borrowers. Female clients of treated banks increase net borrowing and investment, especially those with higher capital productivity. Beneficiary firms grow their sales and profits, diversify suppliers, and exit less. There are no discernible impacts on aggregate firm populations at the district level, reflecting the program's relatively modest scale. Implications for program design are discussed.

Keywords: Blended finance; Credit access; Female entrepreneurship; Misallocation (search for similar items in EconPapers)
JEL-codes: D22 G21 G32 H81 J16 L26 (search for similar items in EconPapers)
Date: 2024
New Economics Papers: this item is included in nep-ban, nep-cfn, nep-ent, nep-fdg, nep-lab and nep-sbm
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Working Paper: Blended Finance and Female Entrepreneurship (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:tcb:wpaper:2408

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