Microcredit: an answer to the gender problem in funding?
Accepted: 5 May 2011 / Published online: 3 June 2011
Ó Springer Science+Business Media, LLC. 2011
Abstract Microﬁnance institutions (MFIs) target
people excluded from the traditional banking system.
By providing start-up capital to these under-ﬁnanced
individuals, they enable a greater number of women
to start their own business, particularly in sectors
where initial capital requirements are high. Our study
follows a portfolio of 3,640 microcredit applicants in
France over the 2000–2006 time period, identifying
MFI client proﬁles and bringing to light gender
differences in borrowers compared to a wider sample
of entrepreneurs. This study shows that the male–
female gap found amongst company creators is also
maintained amongst the clienteles of MFIs. Empirical
results also suggest that gender is a decisive factor
regarding the amount of credit provided to borrowers
when comparing with other factors in the borrower
and ﬁrm proﬁle. Thus to a certain extent, MFIs are
found to reinforce gender inequalities in France.
Keywords Microcredit Á Gender Á Entrepreneurship Á
JEL Classiﬁcations G21 Á J16 Á L26 Á M13
Microﬁnance ambitions in industrialized countries
slightly differ from the better-known traditional
objectives in developing countries. Microcredits are
very small loans (less than 40% of per capita income)
granted to people who are totally or partially
excluded from the banking system. In developing
countries, the aim of microcredit is to reduce poverty,
promote self-employment and improve the empow-
erment of socially excluded persons, particularly
women. In industrialized countries, the goal is ﬁrstly
to reduce poverty by encouraging self-employment.
In this way, microcredit meets two types of need. On
the one hand, it enables people excluded from the
banking system to create their own business. On the
other, it provides extra funding to entrepreneurs by
creating a leverage effect with respect to bank credit.
There are two reasons why women should be
particularly concerned by microcredit. First, they are
more likely to be affected by unemployment and
poverty. In France, for example, the unemployment
rate for women in 2007 was 8.5%, as opposed to
7.4% for men.
The part-time employment rate is
29.2%, but only 3.7% for men.
Women represent the
majority of non-working people, of long-term
S. Brana (&)
University of Bordeaux, Lareﬁ, Avenue Le
33608 Pessac, France
In France, 31% of microcredit borrowers are unemployed
Data for European countries can be found in European
Small Bus Econ (2013) 40:87–100