AbstractLimited access to finance remains one of the major barriers for women
entrepreneurs in Africa. This paper presents a model of start-ups in which firms’ sales
and profits depend on their productivity and access to credit. However, due to the lack
of collateral assets such as land, female entrepreneurs have more constrained access to
credit than do men. Testing the model on data from the World Bank Enterprise Surveys in
Eswatini, Lesotho, and Zimbabwe, we find land ownership to be important for female
entrepreneurial performance in terms of sales levels. These results suggest that the
small Southern African economies would benefit from removing obstacles to female land
tenure and enabling financial institutions to lend against movable collateral. Although
land ownership is linked with higher sales levels, it is less critical for sales growth
and innovation where access to short term loans for working capital seems to be
key.
Macroeconomics Implications of Female Entrepreneurs Facing Financial Frictions to Access to Credit: A DSGE Model Approach in Cameroon
