Frank Gyimah Sackey, University Rovira i Virgili – University of Copenhagen

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Frank Gyimah Sackey, University Rovira i Virgili

Policy and Discrimination in the Microfinance Market in Africa: The Case of Ghana


The study aims at testing the Ghana Microfinance Policy set up to support the vulnerable through access to credit. We resort to the Blinder-Oaxaca decomposition to determine if there is positive discrimination in favor of women and young entrepreneurs in the rationing behavior of the microfinance companies.

This is what we should expect if the policy is effective. Our results show that even after controlling for a large number of borrower characteristics, microfinance type and credit worthiness variables, there is positive discrimination that favors female and young entrepreneurs as this discrimination is largely determined by the differential treatment these groups receive in respect of men and older borrowers from microfinance institutions. Surprisingly, our results also show that the Government microfinance type is the one whose rationing behavior is the most severe, which contradicts the Ghana Microfinance Policy designed by the same government.