Inter‐temporal and spatial variation in credit access to Indian unorganized women entrepreneurs

Abstract

This study investigates the inter‐temporal and spatial variation in credit access to women entrepreneurs in the unorganized sector using two latest rounds of nationally representative datasets on unorganized enterprises in India. The study applies a cross‐sectional distributional check to identify the variations. Probit model with reference category and average marginal effects is used to determine the predictors of access to formal credit (FC). A robustness test has been performed using a pooled probit method. Results are discussed in line with relevant literature as well as empirical findings. The analysis confirms the existence of regional disparities in credit access to women enterprises. Factors like engagement in diversified activities and maintenance of accounting records being registered with relevant authorities have an important bearing on the probabilities to access FC. It is alarming to observe the marginal improvement over 5 years in the credit share of women‐owned unorganized enterprises. Policy shortcomings are discussed on the basis of inferential statistics.