Despite the majority of women in rural Benin developing microenterprises, most remain financially excluded. A variety of government and financial institution programs have aimed to address this problem by offering microcredit. However, most of these programs have been marked by low repayment rates. A team of local researchers found that informal financing can be better than formal credit for increasing the profits of women-led rural microenterprises, depending on the age and education level of the woman entrepreneur, and the type of activity she is operating. The flexibility of financing through social networks appears to be the main advantage of informal credit.
Find out more about the research methods, findings and policy recommendations in the following PEP publications:
