The Guardian
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New Research Unveils Path For Women Entrepreneurs


A new research by an international funded economic empowerment and poverty reduction programme, the Partnership for Economic Policy (PEP) has recommended direct disbursement of credit to women entrepreneurs for the purposes of setting up or expansion of their businesses.

The recommendation of the research undertaken by Dr. Emmanuel O. Nwosu and Dr. Anthony Orji, both of the University of Nigeria (UNN) Nsukka, for PEP, found that women-led businesses, most of which fall under the micro and small scale categories, were dangerously discriminated against in the granting of credit by Nigerian financial institutions.

The partnership for Economic Policy (PEP) is an international organisation that links researchers globally to enhance capacity for development policy analysis in developing countries. PEP research contributes to informing national and international debates related to economic policy, poverty, gender and sustainable development. 

In 2012, with the support of UK Department for International Development (DFID) or UK Aid, and the International Development Research Development Centre (IDRC) of Canada, PEP launched a new programme to support and build capacities for Policy Analyses and on Growth and Employment (PAGE) in developing countries. The Nigerian local PEP research is one of the outcomes, and it focused to establish “whether Nigerian female entrepreneurs have difficulties in accessing formal credit in Nigeria, relative to their male counterparts, and how such credit may affect their firms’ performance.”

The report, which was submitted to PEP in Abuja at the weekend found out that against the widely held perception, there was no deliberate discrimination against credit for female-owned SMEs in Nigeria but a general discrimination against the SMEs sector where majority of Nigerian entrepreneurs fall into.

According to the report exclusively obtained by The Guardian: “Contrary to the results of recent cross-country studies (that included Nigeria), the researchers did not find evidence of significant discrimination against women in formal credit markets in Nigeria. However, the results show that micro/small enterprises are significantly more credit-constrained relative to medium enterprises.” 

It continued: “Therefore, that women entrepreneurs are mostly involved in small and micro credit is nonetheless a big constraint to the growth of women enterprises at the level in Nigeria.”

On the other hand, their findings also reveal that access to formal credit has significant impact on enterprise performance indicators. Firms that are credit-constrained have relatively much lower output per worker, capital per worker and investment in fixed assets for expansion, as compared to firms that are not credit-constrained. And this is even more produced for women-owned enterprises.

“For these reasons and because their results show that access to credit contributes to improving the performance of SMEs, the researchers conclude that government policies should aim to expand formal credit access in Nigeria both by providing necessary funds for small firms. Indeed, as micro/small firms, most of which are owned by women, are found to be more credit constrained in the formal markets compared to medium firms, they should be given priority in related government interventions, such as the recent SMEs intervention funded by the Central Bank of Nigeria, in order to achieve greater impact in terms of poverty alleviation.”

The research concludes that although it is difficult for government to instruct formal financial institutions on how to supply credit in a deregulated financial system, direct intervention through the provision of funds targeted to SMEs should have an impact on related practices and help ease credit constraints for these firms. Governments and monetary authorities should also support credit expansion policies for SMEs by creating an enabling intermediation in Nigeria.

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1 Comment
  • chikeattah

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