The Impact of Access to Financial Services on Women Self-Employment in Kyrgyzstan

Abstract

Developing financial knowledge of females and improving access to financial services is one of the steps to promote women entrepreneurship and increase their participation in the labor market. Financial institutions can provide loans to start and maintain business, which in turn may help women to be financially independent and self-sufficient. In the light of ambiguous results from reviewed literature, the study tries to investigate the impact of access to financial services on women self-employment in Kyrgyzstan. The analysis is based on panel data derived from the Life in Kyrgyzstan survey for 2012 and 2013. The membership in credit and savings group was used as a proxy for the access to finance. Probit and logit estimations are chosen to employ, due to the fact that dependent variable is binary. In order to address the problem of endogeneity, Instrumental Variable approach is also employed. Results from above estimation techniques showed that being in the credit and savings group increases the probability of women self-employment.