Does improved access to financial sources improve women’s entrepreneurship? To explore this issue, we construct a novel dataset of village-level financial access defined in terms of distance of each un-banked village to the nearest banked-centre and merge it with village-level enterprise data from rural India. Using a difference-in-differences research design, we find that proximity to a banked-centre within 5km of an un-banked village increases female entrepreneurship in the non-agricultural sector which is driven by an uptake of institutional credit. The male-owned enterprises shift from agricultural to non-agricultural activities. Results are robust to several additional tests. We conclude that ensuring better credit access through widespread banking outreach can boost women entrepreneurship in rural areas.
STEG Working Paper Series • Research Theme 2: Labour, Home Production, and Structural Transformation at the Level of the Household, Cross-Cutting Issue 1: Gender