Better Loans or Better Borrowers? Impact of Meso-Credit on Female-Owned Enterprises in Ethiopia

Abstract

The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.

Ethiopia Gender Diagnostic Report

“…A study from the World Bank's Women Entrepreneurship Development Project (WEDP) in Ethiopia suggests that offering larger loans to growth-oriented women entrepreneurs can improve firm performance by promoting business growth and boosting employment levels. 28…”

Africa's Pulse, No. 18, October 2018: An Analysis of Issues Shaping Africa’s Economic Future

“…The larger, 12 individual liability mesoloans (870 percent larger than the previous average borrowing size) had a significant impact on accelerating business growth and boosting employment levels: increases of 25 percent in profits and 17 percent in net employment for women entrepreneurs three years after taking the loan. WEDP MFIs are also frequently developing new loan products and recognizing new forms of collateral, such as vehicles, personal guarantees, and even business inventory, to secure loans (Alibhai, Buehren, and Papineni 2018).…”

Effect of deposit mobilization on the technical efficiency of rural saving and credit cooperatives: Evidence from Ethiopia

“…For this reason, mobilizing funds and directing them for the most productive purpose is the primary challenge, and this requires efficient rural financial institutions. For this to happen, increasing efficiency and competitiveness of micro and small-scale enterprises is a focus of the Growth and Transformation Plan II (2016-20) in Ethiopia (Alibhai, Buehren, & Papineni, 2018). Ethiopia has a financial sector strategy with the objective to link the financial sector to agricultural-development-led industrialization, and bring about the development of a sound and liberalized financial system with the eventual aim of efficient financial intermediation serving the development of agriculture and industry.…”