Funding Female Entrepreneurs in MENA Countries (2019): Self-Selection and Discrimination

Imène Berguiga () and Philippe Adair
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Imène Berguiga: University of Sousse, Tunisia

No 1602, Working Papers from Economic Research Forum

Abstract: Do female entrepreneurs in MENA countries face obstacles, either exogenous (discrimination) or endogenous (self-selection), in funding their businesses? Literature reviews provide controversial evidence thereof and, so far, very few papers tackled this funding issue for female entrepreneurs in MENA countries. A pooled sample of 6,253 enterprises from the 2019/2020 World Bank Enterprise Surveys (WBES) including six MENA countries (Egypt, Morocco, Tunisia, Jordan, Lebanon, and Palestine) documents the financial behavior of both owners and managers according to gender. Two probit regression models address loan supply and loan demand with respect to discrimination versus self-selection. There is self-selection and discrimination against female owners but not discrimination against female managers. We provide a robustness test by estimating the models on a sub-sample of micro, small, and medium-sized enterprises. Sampling biases in the WBES, together with the characteristics of female clients of microfinance institutions, suggest that micro-entrepreneurs would have faced bank discrimination and self-selection obstacles. Hence, public authorities should support pooling loan guarantees in favor of female entrepreneurs (i.e., positive discrimination).

Pages: 25
Date: 2022-11-20, Revised 2022-11-20
New Economics Papers: this item is included in nep-ara, nep-ent, nep-mfd and nep-sbm
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