Prof. John Rand of the Department of Economics, University of Copenhagen, has asserted that male –owned small enterprises are grossly disadvantaged mainly due to pure female gender favouritism in loans to micro and small firms.
Prof. Rand made this assertion during the University of Ghana’s 4th Development Policy & Practice Talk organised by its Development Policy Poverty Monitoring and Evaluation (DPPME) Center of Research Excellence, in conjunction with the Institute of Statistical, Social and Economic Research (ISSER) and the Centre for Sustainable Enterprise Development (CSED).
Prof. Rand at the Development Policy and Practice Talk
The Centre for Sustainable Enterprise Development (CSED) is currently headed by Prof. Robert Hinson, Department of Marketing & Entrepreneurship, University of Ghana Business School.
Speaking on the theme, ‘SME Credit Constraints: Revisiting the Gender Dimension of an Old Development Policy Challenge, also the title of his research, he established that though there are numerous studies on the gender-credit relationship in households, little is known about gender discrimination in credit allocation among formal entrepreneurs in Africa.
Participants in attendance
He argued favouristism, and not superior managerial skills, is the primary reason why female-owned small enterprises are less likely to be credit constrained since the gap is reversed for medium-size enterprises.
According to him, the ‘over-shooting’, i.e. recent focus on serving female-owned smaller enterprises credit demand, may have distorted credit allocation in a non-optimal manner.
Despite the favouritism factor as key in ensuring the credit safety of female-owned small enterprises, he maintained the disparity in gender differences in credit constraints is small and affected by size, sector, and location.
Disparity in gender differences in credit constraints is small and affected by size, sector, and location: Prof. Rand
Prof. Rand consequently recommended donors and policy makers, instead of calling for more credit to small female-owned enterprises, rather focus the effort on improving the functioning and competitiveness of the financial sector.
Ghana, he stressed, must therefore employ an industrial strategy that goes beyond investment climate concerns since, though central to economic success, it may not be enough to overcome the advantages of the world’s existing industrial locations.
Participants included media personnel and actors in industry
This, Ghana could do, by adopting and committing to long-term strategic development plans, diversify instead of specialising in a single industry, and be willing to take risks, he concluded.
The Talk has thus far hosted professors Klaus Grunert, Soeren Jeppesen, and Mette Morsing, all of Denmark’s University of Copenhagen, who have spoken extensively on ‘Food Marketing and Poverty Alleviation’; ‘Corporate Social Responsibility and Small and Medium Enterprises’; and ‘Corporate Social Responsibility and MNEs’, respectively.
Prof. Rand, in a pose with the Chairman of the programme, Dr. William Baah Boateng, Dpt. of Economics, UG
Prof. Rand being interviewed by the media after the event
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