EMANES Working Paper No 67

Factors detrimental to financial inclusion (account holding and borrowing) regarding female entrepreneurs arise both from the demand side of businesses, such as the absence of funding need versus self-selection despite account holding, and from the supply side of financial institutions, such as deficient financial infrastructure and discrimination towards loan applicants. A sequential model takes care of both the demand and the supply sides, including descriptive statistics prior to and during the COVID-19 pandemic, upon four MENA countries, namely Egypt, Jordan, Morocco and Tunisia.

Probit regressions (marginal effects) analyse financial inclusion from the demand side, using two different but somehow comparable sub-samples of micro enterprises from the 2020 World Bank Enterprise Survey (WBES) and the Economic Research Forum (ERF) COVID-19 Monitor in 2021.

We address (female) micro-entrepreneur self-selection (i) prior to and (ii) during the COVID-19 pandemic, as well as discrimination (iii) prior to and (iv) during the pandemic.

Prior the pandemic, microenterprises are prone to self-selection vis-à-vis loan application in Tunisia (ERF) and in all countries from North Africa (WBES). During the pandemic, there is no self-selection vis-à-vis government support affecting either gender or micro-entrepreneurs. Prior to the pandemic, females or micro-entrepreneurs do not face discrimination in loan applications (WBES). During the pandemic, females are not subject to discrimination as a result of government support, whereas Moroccan micro-entrepreneurs do face discrimination (ERF).

Prior to the pandemic, financial inclusion runs opposite to both self-selection and discrimination (WBES), but not for self-selection (ERF), whereas it proves insignificant during the pandemic with respect to self-selection or discrimination, whatever the sub-sample. Hence, financial inclusion may not preclude self-selection or discrimination, which remain obstacles to the business growth of micro-entrepreneurs, that policies enhancing funding should help overcome.

Contact Us

Not readable? Change text. captcha txt