The Impacts of Access to Finance on Household Welfare: A Mixed Methods Approach for Women and the Youth in The Gambia
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Date
2022
Authors
Manja, Laston Petro
Badjie, Isatou A.
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Abstract
Poor access to finance remains one of the key challenges faced by households and
businesses in The Gambia, in the face of an underdeveloped financial market. With
up to 69% of the population remaining financially excluded, women and the youth
are further disadvantaged as they are reported to face peculiar challenges in access to
finance, in spite of efforts taken by the government. This study, therefore, examined
the impacts of various forms of finance for these marginalized groups by supporting
quantitative analyses from the Third Integrated Household Survey (IHS3) data with
some qualitative information. Adopting the endogenous regime switching (ERS)
regression approach, due to non-randomness of access to finance, the study found
that access to credit generally improves welfare of women and youth households,
especially in terms of income and non-food consumption expenditure. However, in
the current administrative system of formal finance, access to finance reduces food
consumption expenditure, especially for women. For the youth, estimates of treatment
effects show that informal credit is welfare-degrading, especially in terms of total
consumption expenditure. Various policy implications are drawn from the results.
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Keywords
Financial access; Household welfare; Women; Youth; ERS; The Gambia.