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How Access to Credit Affects Self-employment: Differences by Gender during India's Rural Banking Reform

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  • Nidhiya Menon
  • Yana van der Meulen Rodgers

Abstract

Household survey data for 1983-2000 from India's National Sample Survey Organisation are used to examine the impact of credit on self-employment among men and women in rural labour households. Results indicate that credit access encourages women's self-employment as own-account workers and employers, while it discourages men's self-employment as unpaid family workers. Ownership of land, a key form of collateral, also serves as a strong predictor of self-employment. Among the lower castes in India, self-employment is less likely for scheduled castes prone to wage activity, but more likely for scheduled tribes prone to entrepreneurial work.

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  • Nidhiya Menon & Yana van der Meulen Rodgers, 2011. "How Access to Credit Affects Self-employment: Differences by Gender during India's Rural Banking Reform," Journal of Development Studies, Taylor & Francis Journals, vol. 47(1), pages 48-69.
    • Handle: RePEc:taf:jdevst:v:47:y:2011:i:1:p:48-69
    DOI: 10.1080/00220381003706486
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    2. Chakravarty, Satya R. & Pal, Rupayan, 2013. "Financial inclusion in India: An axiomatic approach," Journal of Policy Modeling, Elsevier, vol. 35(5), pages 813-837.
    3. Sandhya Garg & Samarth Gupta, 2021. "Financial Access and Gender Gap in Entrepreneurship and Employment: Evidence from Rural India," IEG Working Papers 442, Institute of Economic Growth.
    4. Eshetu, Haimanot & Legesse, Belaineh & Nuru, Seid & Beyene, Fekadu, 2018. "The Impact of Micro-Credit Intervention on Female Labor Force Participation in Income-Generating Activities in Rural Households of North Wollo, Ethiopia," Ethiopian Journal of Economics, Ethiopian Economics Association, vol. 27(02), October.
    5. Small, Sarah F. & van der Meulen Rodgers, Yana, 2023. "The gendered effects of investing in physical and social infrastructure," World Development, Elsevier, vol. 171(C).
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    10. Obed I. Ojonta & Jonathan E. Ogbuabor & Edith C. Obiefuna, 2024. "Impact of Employment on Access to Credit of Non-agricultural Household Enterprises in Nigeria," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(4), pages 17556-17578, December.
    11. John K. Pattison‐Williams & Philippe Marcoul & Sandeep Mohapatra, 2023. "Intrahousehold moral hazard frictions and household poverty traps in rural India," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 31(1), pages 67-96, January.
    12. Li, Changsheng & Ma, Wanglin & Mishra, Ashok K. & Gao, Liangliang, 2020. "Access to credit and farmland rental market participation: Evidence from rural China," China Economic Review, Elsevier, vol. 63(C).
    13. Han, Linghui & Hare, Denise, 2013. "The link between credit markets and self-employment choice among households in rural China," Journal of Asian Economics, Elsevier, vol. 26(C), pages 52-64.
    14. Jia, Xiangping & Xiang, Cheng & Huang, Jikun, 2013. "Microfinance, self-employment, and entrepreneurs in less developed areas of rural China," China Economic Review, Elsevier, vol. 27(C), pages 94-103.
    15. De Vita, Luisa & Mari, Michela & Poggesi, Sara, 2014. "Women entrepreneurs in and from developing countries: Evidences from the literature," European Management Journal, Elsevier, vol. 32(3), pages 451-460.
    16. Bairagya, Indrajit & Bhattacharya, Tulika & Bhattacharjee, Manojit, 2020. "Impact of Credit Accessibility on the Earnings of Self-employed Businesses in India," Journal of Asian Economics, Elsevier, vol. 69(C).
    17. Nidhiya Menon & Yana van der Meulen Rodgers, 2013. "Credit and self-employment," Chapters, in: Deborah M. Figart & Tonia L. Warnecke (ed.), Handbook of Research on Gender and Economic Life, chapter 22, pages 359-377, Edward Elgar Publishing.
    18. Sandhya Garg & Samarth Gupta & Sushanta Mallick, 2025. "Financial Access and Entrepreneurship by Gender: Evidence from Rural India," Small Business Economics, Springer, vol. 64(2), pages 729-754, February.

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