Impacts of financial inclusion on micro-businesses: Factors explaining business growth

David Rodríguez-González, Andrés García-Suaza, Alexander Sarango-Iturralde, Juan Diego Mayorga, Álvaro Pretel-Meneses, Soraya Husain-Talero, Lina Zarama, Juan Camilo Urbano, Daniel Girón, Natalia Medina and Aura Barberán
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Andrés García-Suaza: Universidad del Rosario
Juan Diego Mayorga: Universidad del Rosario
Álvaro Pretel-Meneses: Rutgers University

Revista Desarrollo y Sociedad, 2025, vol. 100, issue 3, 55-77

Abstract: Access to financial markets, digitization, and formality have been identified as key factors associat-ed with firm performance. This paper presents a detailed descriptive analysis of the income gap among a group of micro-businesses (MBs) in Colombia’s Pacific region, examining how various factors relate to this gap. Using data from MBs participating in a program by Foundation WWB Colombia and applying the Oaxaca-Blinder decomposition, the analysis shows that formal MBs owned by men—with stronger financial inclusion and digital skills—tend to generate higher income than their counterparts. Complementary qualitative field-work reveals that micro-entrepreneurs often perceive informal credit as more attractive than bank credit due to its easier access and greater payment flexibil-ity. These findings suggest that policies promoting women’s empowerment, formalization, digital literacy, and access to financial services may contribute to nar-rowing these income gaps among MBs in Colombian’s Pacific Region.

Keywords: Financing; digital skills; informal sector; gender; Colombia (search for similar items in EconPapers)
JEL-codes: G21 L25 O16 O17 (search for similar items in EconPapers)
Date: 2025
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https://revistas.uniandes.edu.co/index.php/dys/article/view/10191/10932

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Persistent link: https://EconPapers.repec.org/RePEc:col:000090:021491

DOI: 10.13043/DYS.100.3

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