EMANES Working Paper No 57

Do female entrepreneurs in MENA countries face obstacles to funding their businesses, either through self-selection or discrimination? A literature review reveals controversial evidence thereof but, to date, no paper has tackled this funding issue for female entrepreneurs in MENA countries from a dynamic perspective. Three pooled samples, from the 2013 and 2019 World Bank Enterprise Survey (WBES), and a cohort over 2013-2020, include three North African countries (Egypt, Morocco and Tunisia) and three Middle East countries (Jordan, Lebanon and Palestine); they document the financial behaviour of both owners and managers, according to gender. Probit regressions address loan demand (including Heckman probit) and loan supply, with respect to self-selection versus discrimination. In 2013, there is neither self-selection nor discrimination for female entrepreneurs, whereas female entrepreneurs are prone to self-selection in 2019, compared to their male counterparts. Self-selection behaviour from the demand side does not result from discrimination on the supply side. Sampling biases in the WBES, together with the characteristics of female clients of microfinance institutions, suggest that micro-entrepreneurs would have experienced self-selection and, possibly discrimination, regarding credit.

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