Blended Finance and Female Entrepreneurship

We combine micro data from a credit registry with firm-level administrative tax records to trace the impacts of a large-scale blended finance program for female entrepreneurs in Turkey. We find that participating banks durably increase lending to women---both in absolute terms and relative to male entrepreneurs. Banks lend more to pre-existing female borrowers, poach clients from other banks, and crowd in first-time borrowers. Compared with a matched control group, treated female entrepreneurs grow their operations significantly faster and are six percentage points less likely to default within three years after the start of the program. These effects are not spatially uniform as banks use the program strategically to increase market shares in districts where they lag their competitors.