In the context of World Bank support to Papua New Guinea, CGA’s Hamid Alavi expanded the ability of women entrepreneurs to access finance. Women entrepreneurs in PNG are more likely than their male colleagues to be in the informal sector, running smaller firms mainly in service sectors and thus operating in lower value added sectors. Women entrepreneurs have lower access to finance than male entrepreneurs. Not only are they less likely to take out a loan, but the terms of borrowing can also be less favorable for women, including higher interest rates, be required to collateralize a higher share of the loan, and have shorter-term loans.
Access to finance for women is limited by non-financial barriers. These can include conditions in the broader business environment that may differentially affect women’s and men’s businesses (e.g., the legal and regulatory environment or the quality of available infrastructure); personal characteristics of the entrepreneurs (e.g., differentials in education or management training).