Abstract

Access to financial services by women-owned businesses, especially for ethnic minorities in developing countries, is a critical issue in the development and growth of new and small businesses around the world. According to a report by the International Finance Corporation (IFC), an estimated 70% of women-owned formal sector small and medium enterprises in developing countries are underserved by financial institutions, resulting in a global financing gap of around $285 billion. Prior research findings further suggest that women-owned firms are charged higher interest rates and require greater collateral to meet financing terms, indicating that loan officers interact with female business owners in a discriminatory fashion (Carter, Shaw, Lam, & Wilson, 2007; Coleman, 2000; Fay & Williams, 1993; Buttner & Rosen, 1992). In this study, we compare access to credit for indigenous and non-indigenous, men- and women-owned small businesses in Guatemala. Our main hypothesis was that being female and indigenous lead to different likelihoods and terms of loan awards as well as different perceptions and experiences related to customer service.

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