Loan delinquency among small business owners in Ghana: the importance of gender to the lending process

Abstract

The article identifies systematic differences in commercial lending default rates and payment delinquency between firms that are operated by women and men in Ghana. Logistic and Tobit analyses that measure the incidence of loan default and months in arrears are estimated for a sample of 2039 entrepreneurial firms, of which 31% are female owned. The results indicate that single college-educated women manage their loan accounts more prudently than both men in general and married women. Other opportunities and challenges faced by women business owners in Ghana are discussed.

Microfinance, gender and entrepreneurial behaviour of families in Ghana

“…Similarly, women whose businesses are being controlled by their husbands or household heads are less efficient than their counterparts whose businesses are not controlled. The efficiency of women in utilising microfinance resources better than men is indicated in another study where female participants of microfinance programmes were less likely to be delinquent (Evans and Winston, 2008). These are the sources of the differences between men and women in microfinance outcomes with some suggesting a capability effect while others argue a socio-cultural or pure gender effect (Arku and Arku, 2009).…”