Blended Finance and Female Entrepreneurship

Blended finance programs combine public and private funds to ease access to credit for underserved firm segments. While these programs have become widespread in many emerging markets, evidence on their impact remains lacking. We merge credit registry data, firm-level tax records, and matched employer-employee data to analyze a typical blended finance program for female entrepreneurs in Turkey. Our synthetic difference-in-differences results reveal a 22% average increase in the share of credit allocated to women by participating banks, a sustained effect driven by higher lending to existing, poached, and first-time female borrowers. Beneficiary firms, especially those with higher capital productivity, experience increased investment, employment, sales, profits, and supplier diversification, as well as lower exit rates. Our results offer new empirical insights into the mechanisms driving effective financial inclusion policies.