Women entrepreneurs’ access to microfinance and cooperative finance in Latin america: differences between opportunity and necessity entrepreneurship

Female entrepreneurship is limited by problems of access to traditional financing. This study aims to evaluate the relationship between female entrepreneurship with two alternative sources of financing: microfinance and cooperativism in Latin America. Specifically, this relationship is analyzed by distinguishing between female entrepreneurship driven by opportunity and that which arises out of necessity. To meet the proposed objective, a random effects panel data model was used to evaluate data from seven countries, for the period between 2012 and 2020. The models were designed to test the incidence of microfinance and cooperativism variables on female entrepreneurship, categorizing them as necessity-based and opportunity-based. The results show a positive relationship between microfinance and cooperativism with female entrepreneurship. When distinguishing by type of entrepreneurship, a positive relationship was held for opportunity entrepreneurship, while a negative association was found between alternative sources of finance and necessity entrepreneurship. However, there is no conclusive relationship in the case of male entrepreneurship. The results suggest a need to increase both the number of institutions and the volume of loans in microfinance and cooperativism to strengthen female entrepreneurship. This paper contributes to the literature by finding that the incidence of financing alternatives enhances female entrepreneurship in Latin America, a region with one of the highest rates of entrepreneurship globally.