Financial Inclusion and Barriers to Funding Micro-Entrepreneurs in MENA Countries Prior to and During the COVID-19 Pandemic

Imène Berguiga, Philippe Adair

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.

Gender wage gap in the Tunisian labour market: An econometric analysis

Mehdi Ben Braham, Ameni Abid

This article is based on the explanation of the pay differences between women and men in the Tunisian labour market. The theoretical framework of our research is articulated around the economic theory of gender discrimination in the labour market, by focusing on the main typologies highlighted in the work of Becker (1972), Phelps (1972), and Arrow (1973). Based on the Oaxaca-Blinder model (1973), the use of micro-econometric data from the 2015 national population and employment survey shows a pay gap between men and women of 10.4%. The unexplained part of this gap, which can be attributed to discrimination, is 14%. This work has also made it possible to identify the various socio-economic factors that can, directly and indirectly, impact wage inequalities between women and men.

Fostering Decent Jobs in MENA Countries: Segmented Employment, Occupational Mobility and Formalising Informality

Philippe Adair, Vladimir Hlasny

Why is there persistent labour market segmentation, as evidenced by gender patterns in employment and occupational mobility? What is the impact and potential of various formalisation policies in MENA countries?
We first provide an overview of the informal economy in its taxonomy, coverage and drivers, across six MENA countries. Next, we analyse workers’ occupational mobility. considering their pre-existing status, age cohort, gender and other demographics, using transition tables and multinomial logistic regressions applied to longitudinal microdata from Labour Market Panel Surveys. We find persistent segmentation and low occupational mobility in all countries, suggesting that informal employment is not driven by choice on the labour supply side but by structural constraints on the demand side. We also find rather modest impacts of existing formalisation policies that encapsulate distinct stick and carrot strategies, as well as business versus workers targeting. We conclude that promoting social and solidarity enterprises, and extending microfinance to informal enterprises, are promising policies for the creation of decent jobs.

Contact Us

Not readable? Change text. captcha txt