Abstract
This paper investigates whether there is a gender bias in granting credit for businesses from Eastern Sub-Saharan Africa. It is first necessary to determine whether firms are credit-constrained. In order to identify the status of the firms with respect to credit, two recently introduced methods that can identify the credit-constrained status of firms are used. The paper uses World Bank’s Enterprise Survey Program data set from 2013 to investigate this question. The empirical results obtained, after controlling for a large number of firm-level characteristics and using country-level dummies, reveal that female-owned firms appear to have more access to credit than their male counterparts. The paper also shows that the female-owned firms in the region finance their capital according to the Pecking Order Hypothesis.
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