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The objective of this study is to ascertain if women entrepreneurs face
discrimination in accessing formal credit in a developing economy using
Nigerian data. Adopting direct measures of credit constraint, this study could not
find any statistically significant discrimination against women in formal credit
regardless of the firm size. This is evident by the non-significance of the gender
coefficient in the probit estimations at different firm sizes as well as no
statistically significant difference found in the Fairlie decomposition of the
credit constraint by gender. The results show that medium size firms are
significantly less likely to suffer credit constraint compared to smaller firms,
while on the other hand, wood and furniture, and textile enterprises have
significantly higher probability of being credit constrained. However, even
though our results show there is no significant gender discrimination in the
formal credit markets, access to formal credit by small and medium enterprises
in Nigeria still remain very low at an average of about 29%. Thus, monetary
authorities should support credit expansion policies for medium and small
enterprises. Again, direct government involvement by the use of intervention
funds targeted at small and medium enterprises would make impact. This is
among the first studies in Nigeria to find no statistically significant difference or
discrimination by gender using Fairlie decomposition of credit constraint.
