Dr. Abdoulaye Seck
Associate Professor
Department of Economics
Cheick Anta Diop University
Senegal
.
Background
Lessons from 8 PEP-PAGE project findings (2013-2016)
Female entrepreneurship
Nigeria, Senegal, Cameroon
Palestine, Bangladesh
Bolivia, Peru
Youth entrepreneurship
Uganda
Background
Main features of these 8 PEP projects/papers
•
Focused on the role of credit and/or risk in shaping female and youth
entrepreneurial propensity
 Issues of access to credit (gender-based discrimination)
and attitude towards risk
•
Very “policy-oriented”
 How to inform the national policy processes
Background
Widespread belief: differential treatment (credit/risk)
against female and young entrepreneurs (minority)
•
Has prompted national policies geared towards females/youth
•
Lack of solid empirical foundations (inconclusive literature)
•
Need for country-specific studies to look at:
•
Role of cultural/social/economic specificities
•
How credit & risk contribute to shape female/youth
entrepreneurial propensity
Entrepreneurship, credit, and risk:
key findings
Discrimination: two types
•
Taste-based (direct): prejudices fueled by social norms (gender/age)
•
Statistical-based (indirect): factors correlated with firm performance
(size, risk aversion,..)
Key PEP findings
•
No DIRECT (taste-based) discrimination against women in credit market
•
Evidence of INDIRECT (statistical-based) discrimination for youth/women
 Because of choice of business activities and risk profile
 Importance of “third factors” (correlated with performance)
Entrepreneurship, credit, and risk:
key findings
SMEs are more credit constrained than larger firms
• Women/youth more likely to operate small businesses
• Other way around: credit constraints prevent SMEs to expand
Collateral requirements
• Female/young entrepreneurs face more difficulties meeting them
 Land and property rights tend to favor men
Bargaining power
• Women tend to share their funds with men, while men do not
Entrepreneurship, credit, and risk:
key findings
Attitude towards risk
• “Fear of failure” (risk aversion) greater for women
• Lower self-perception of their skills
• Tendency to operate businesses with less capital intensity
• Belief that they do not need credit (lower credit amount)
• More cautious young entrepreneurs have lower demand for credit
 Indication of the unfriendliness of the credit market and
inadequacy of the financial products/loan schemes
Entrepreneurship, credit, and risk:
key findings
Additional results
• Greater access to credit improves the performance of firms and the
economy
 productivity, job creation, investment, and GDP
• Credit is at least equally beneficial to female- and male-owned firms
• Supplementing funding program with business training delivers far
greater benefits
What role for public policies
• Although no evidence of direct discrimination,
no call for an abandonment of gender- or youth-focused public policies
 Result could indicate effectiveness of these policies
• Rather, a need for widening scope and improve targeting of policies
• Change in the rationale of these policies
 Role of “third factors”: indirect, statistical-based discrimination
 Women/youth still less involved in entrepreneurship
What role for public policies
• Need to increase the public funds available to females and youth
• Recognition that granting credit will not by itself improve entrepreneurial
profile of women/youth.
 Business training programs
o Business skills: management and productivity improvement
o Technical assistance: more specific and personalized support
o Credit counseling: functioning of the credit market
 Reduction of “risk of failure”: improve women/youth self-perception of
skills and entrepreneurial potentials (media coverage of success stories)
• Need to target SME
Summary
Good understanding of the gender and youth dimension of
entrepreneurship in the focused developing countries
Crucial role of credit and risk attitude
Findings of indirect discrimination and the role of “third factors”
constitute valuable inputs for public policies
Still some unanswered questions–need for additional research/funding