Information asymmetry and self denial in gender participation in commercial banks� credit markets in emerging economies in Ghana

Abstract

Micro and small women entrepreneurs� participation in commercial banks� credit markets remains a huge challenge even after the liberalization of the financial sector. The present study sought to examine factors that influence gender participation in the credit markets of commercial banks. The sample size comprised 678 respondents to questionnaires for the study. At the individual level, the study tested that no significant relationship exists between a borrower�s individual characteristics and credit participation, and that no significant relationship exists between individual�s gender and credit participation. Also, at the firm level, the study tested that no significant relationship occurs between credit market conditions and credit market participation, and that no significant relationship occurs between individual�s firm characteristics and credit market participation. However, the findings reject all these null hypotheses for the alternates. Using the Heckman two-step model, we observed that participation increases for male and the young, entrepreneurs in the commerce sector, those closer to the bank and those who have previously participated in the market. Yet, participation reduces for entrepreneurs with secondary education and those with larger household size. Also, the likelihood to participate is influenced by being a male, having larger assets value and easiness of loan processing. Moreover, the Fairlie decomposition analysis shows a credit participation gap between men and women entrepreneurs that is largely influenced by differences in their individual and firm characteristics. The major implication is that male entrepreneurs have more favorable individual, firm and credit market conditions than female entrepreneurs for credit market participation. Thus, government policies to empower women are desirable. � 2020 Journal of the Canadian Council for Small Business and Entrepreneurship/Conseil Canadien de la PME et de l�entrepreneuriat.