Abstract:
Despite government’s huge investments in the informal sector activities, women are
constrained in the credit market mainly due to culture; norms and lack of collateral securities as
majority of women do not have control over productive capital. As a way of improving access to
credit by women, the Government recently launched a number of women empowerment policies
among them is the improved access to credit from financial institutions. Using individual firm
level data and a methodological approach consisting of endogenous switching regression
approach, this study intends to empirically investigate whether the improved credit access by
women is justified in Zimbabwe. An endogenous switching regression is appropriate to deal with
individual heterogeneity and examine whether access to credit is gender-based. The results
showed that there is no discrimination in the credit market as there is no significant difference in
access to credit between male and female entrepreneurs. However, there is a slight significant
improvement in firm performance due to access to credit. The study recommends that Microcredit be made more flexible and to incorporate special relief non-financial intermediations to
meet so as cater for the gender needs of household and community.
