Not all that glitters is gold: Financial access, microfinance, and female unemployment in sub‐Saharan Africa

Abstract

The present study assesses the relevance of microfinance institutions (MFIs) in the effect of financial access on gender economic inclusion in 44 countries in sub‐Saharan Africa (SSA) for the period 2004–2018. The adopted empirical strategy is interactive quantile regressions that are tailored to account for both simultaneity and unobserved heterogeneity. Two MFI dynamics are employed: MFIs per 1,000 km2 and MFIs per 100,000 adults. Financial access is measured in terms of female bank account ownership while gender inclusion is measured in terms of reducing female unemployment. We find that MFIs per 1,000 km2 must reach thresholds of between 2.328 and 2.490 at the 90th quantile of the female unemployment distribution in order for female bank account ownership to reduce female unemployment. The partial validity of the tested hypothesis is clarified and we note a few policy implications.