Introduction

The coronavirus pandemic imposes not only a global health threat but also an economic shutdown in many countries especially in developing countries like Tunisia.Microfinance has since a long time ago assumed a basic part in destitution easing. It surrenders individuals a hand, engaging them to assist themselves for the way out of poverty. However, the role of microfinance within COVID-19 recovery efforts is even more prominent (Onwuka 2021). The award in 2006 of the Nobel Peace Prize to Muhammad Yunus has made it possible to widely publicize micro-credit as one of the effective tools for the fight against poverty, and even the empowerment of the poor and especially of poor women (Elizabeth 2007). Financing of women’s micro-enterprises is a priority of the microfinance financial system, simply because it is reported that women are the priority target of micro-credit institutions (Guérin and Servet 2003). Women entrepreneurs in developing countries, however, face several additional barriers to enterprise such as lack of access to capital, land, and business premises because asset ownership is male-dominated (Roomi 2005), and they usually require small loans for business start-ups (S. Mahmood 2011).

The basic measures of women’s empowerment are constructed mainly to capture the multidimensional nature of the situation of women (Mason 1986) concerning the main indicators, such as mobility, decision-making, and independence. It is part of the “gender and development” approach, which has taken over from the “integration of women in development.” Hashemi et al. (1996) argue that the most challenging task in conducting female empowerment assessments is to develop a valid and reliable measurement index, as accountability can be viewed from different angles.

Microfinance is a sector which concerns the arrangements for allocating small amounts of credit to low-income people, who are excluded from the banking system, and to positively influence their living conditions through the granting of loans that boost the activity of economic units. Women, who belong to a vulnerable social category, are the most affected by this phenomenon. They were often excluded from development programs. International circles then became aware of the need to reduce inequalities between men and women while considering their role in development plans and projects. This awareness will also promote a series of measures to improve their status in society. It was then that the concept of “integrating women into development” was launched (Hoffmann and Marius-Gnanou 2002).

During the 1970s, it was recognized that most development programs tended to ignore women’s specific problems. The concept of “women’s inclusion in development” gained recognition as the international community became more aware of the need to reduce gender inequalities and the importance of women in reproductive function and agricultural production. Empowerment may seem like an obvious solution. Microfinance institutions encourage women in developing countries to start micro-enterprises to overcome economic and social barriers. To integrate with development and combat poverty and exclusion, poor women have used the informal sector to create a source of income. In Tunisia, as in developing countries, tackling poverty, exclusion and inequality are critical objectives, and the informal sector plays a significant role in achieving these goals. However, this sector has grown with the emergence of microfinance or micro-credit. However, micro-finance appears to be a tool for emancipation and promotion of the status of women, with multiple objectives:

- Create a source of income for women and facilitate their financial independence.

- stabilize and professionalize their entrepreneurial activities.

- improve their status within the family.

- Increase self-esteem.

The impact of microfinance on women entrepreneurs and their micro-enterprises remains under-explored; however, the focus of the larger ongoing research project from which these initial findings are reported.

Very few studies have justified the relation between microfinance and entrepreneurship development in developing countries. Therefore, the question of whether microfinance improves or worsens entrepreneurship still merits further research. In short, there are significant gaps in the relevant literature on developing countries, including Tunisia, remains to be studied further.

A study by Chowdhury and Jahangir (2008) found that the microfinance program does not promote women’s entrepreneurship at the household level in Bangladesh, but it helps to increase the capital of already established businesses. However, Neeti et al. (2021) found that microfinance implementation tools— micro-credit, micro-savings, skill development, business assistance have the significant relationship with entrepreneurship development.

This study makes two main contributions in the existing literature. First, it extends previous studies by providing new empirical evidence of the effect of microfinance on Women Entrepreneurship development in Tunisia during COVID-19 pandemic. Second, to better understand this relationship, this study builds on complexity theory based on fsQCA. This approach has been widely used in recent years in various domains, because fsQCA controls correctly for endogeneity, noisy data and collinearity between independent variables (Ragin 2008; Woodside 2014). Using this approach, researchers have the opportunity to gain a deeper and richer perspective on the data.

The micro-finance or micro-credit system has emerged as the most appropriate instrument for financing the needs of low-income populations, particularly women. Since the Washington summit in 1997, micro-credit has had two main objectives: to reduce poverty or exclusion and contribute to promoting women's entrepreneurship. And this dual objective gives a new approach to microfinance institutions.

In Tunisia, the micro-credit system was implemented in March 1999 to promote national solidarity. Similarly, these micro-credit programs aim at the economic and social integration of the poor, creating sources of income, and improving the living conditions of the poorest.

The participation of Tunisian women in these programs is remarkable, and the rate of her participation rises from one year to another from 38% in 2005 to 57% in 2019 (African Development Bank 2019).Footnote 1 This shows the Tunisian woman's awareness of creating financial autonomy to improve her living conditions and integrate economically and socially through the creation of productive projects.

Context of micro-credit in Tunisia

Despite the diversity of funding programs, a segment of the population remains away from the various funding instruments. This population could not turn to commercial banks because of the lack of guarantees and qualifications. In addition, it was necessary to create a financing instrument that would allow the poorest to take charge of themselves and have a source of income while settling on the land of their ancestors. This is how the micro-credit system was born in Tunisia, which enabled the poorest social stratum to fight against poverty and banish the assisted mentality.

Inter-Arab Enda

Founded in 1990, the NGO Enda Inter-arabe began its activity by supporting ecological and development projects. It introduced micro-credit in 1995 to reach people excluded from adequate financing. In 2015, after serving 500,000 clients, Enda evolved and decided to transfer its micro-credit activities to Enda Tamweel, the NGO focusing on supporting entrepreneurship. Over the years, it has become a reference institution in Tunisia and the Arab world in microfinance. Today, the two structures combine a tailor-made offer to contribute to the financial empowerment of marginalized populations, including women and youth and farmers and ranchers.

The non-governmental organization (NGO) Enda Inter-Arabe, has been awarded the rating «Alpha» by the rating agency "Micro Rate" for its financial performance and «Excellent» for its social performance. With the awarding of the "alpha" rating ("alpha + " being the maximum rating), Enda progressed and obtained one of the best ratings issued by the agency, among more than 450 ratings made on MFIs from Latin America Eastern Europe and Africa. The result of the study, dating from May 2010, confirms a continuous annual increase since the first rating in 2005.

It should be noted that, in the interest of transparency and improvement of its services, Enda has used rating agencies to evaluate its social and financial activities since 2005. With 130,000 active customers, a total of 358 million Tunisian dinars granted, and 630,000 loans awarded since 1995 (figures for May 2010), Enda called on the credit risk rating agency MicroRate, to perform the MFI's fourth rating to assess and optimize activities.

Thus, the rating obtained by Enda, qualified as excellent by the rating agency, is explained by the work undertaken on three axes: the diversification of the proposed products, the consolidation of the structure of Enda Inter-Arabe, and the reorganization of its portfolio. The rating agency explained that this result was justified by the particular effort made on sound management, securing diversified funds, and maintaining a relatively low-interest rate (compared to others rated by the agency).

Micro-rate also described Enda Inter-Arabe’s social outcomes as excellent. The agency based its assessment on the efforts made to protect clients and improve their services. Other factors were taken into account: sound financial management, which helped to support social activities in favor of clients but also of staff, the decentralization project, the development of new products that have effectively affected the target populations of micro-credit, and a strong culture of social engagement.

Tunisian solidarity bank (BTS)

The Tunisian Solidarity Bank (BTS) was created in 1997 on the initiative of the Tunisian State to finance young graduates of higher education and vocational training. She specializes in microfinance for the promotion of tiny enterprises (TPE). It has a capital of 60 million dinars (54% public and 46% private) with a shareholder base (more than 220,000 shareholders).

The BTS thus appears as a microfinance institution but borrows several characteristics of solidarity finance. Moreover, it is an independent institution. In fact, there is no intermediary between the bank and the entrepreneur. The BTS is an institution inspired by the Grameen Bank. This is one of the first experiences of implementing micro-credit practices (Manaï 2005). For this, BTS is the crucial experiment that can be studied. It finances projects not eligible for credit under the traditional banking system. The major innovation is its most extensive geographical and sectoral intervention. The target population is most widespread, with a particular interest for higher education graduates. The BTS is the first experiment that allows the poor to obtain small loans (without guarantees) that facilitates the exercise of an independent and income-generating activity (Benarous 2004). The question remains whether this institution respects the missions assigned to it to meet the objectives of its creation. To answer this question, we can rely on the analysis of the creative texts and internal documents of the BTS.

Moreover, the population sought by the BTS is mainly made up of young graduates and qualified professionals, inhabited by the idea of a profitable project and wishing to establish themselves for their own account but who have neither the means nor sufficient collateral to request credit from another bank.

Micro-credits granted by associations

Micro-credit is any credit aimed at helping economic and social integration. These micro-credits are granted to finance the acquisition of small inputs necessary for production or in the form of working capital. These credits may also be given to financing needs to improve living conditions." The associations do not have the right to distribute profits, and the reimbursement by the beneficiaries is made to the associations which keep the proceeds of interest and return the principal to the BTS. However, these associations are under the control of the Department of Finance and must maintain regular accounting. They shall also be subject to external audit if deemed necessary. If an association fails to fulfill its obligations, it may be subject to the withdrawal of its authorization to register loan contracts and value-added tax.

A maximum of 4000 dinars characterizes the micro-credit system in Tunisia for productive activities and 700 dinars for improving living conditions, a maximum interest rate of 5% per annum, and a maximum repayment period of 3 years with the possibility of deductibility. In addition, the amounts used for each association for granting micro-credit must be at least 95% of the resources allocated to the micro-credit credit, and the total amount of credit granted by each association for the financing of needs for the improvement of living conditions must not exceed 20% of the resources. Also, micro-credits are eligible for the FNG National Guarantee Fund (90% taken over by the FNG and 10% by the association).

Finally, the association receives an installation fee of 15,000 Dinars and an operating fee of 20 Dinars per file with a ceiling of 10,000 Dinars per year.

On this basis, we propose in the framework of this paper to identify the contribution of micro-credit to the capacity building of women in Tunisia. The literature review on the various works established on the relationship between microfinance and female entrepreneurship will be examined in the second section. The third section will report the empirical methodology adopted (sample presentation, test and comments). The conclusion, which is the subject of the fourth section, will take up the main lessons learned from the empirical study carried out in this paper.

Objectives of the study

The objective of this study is to examine the impact of microfinance on women's entrepreneurship and empowerment in Tunisia.

  1. i.

    To examine the role of microfinance on women's entrepreneurship development and empowerment in Tunisia.

  2. ii.

    To examine the relationship between micro-credit, micro-savings, Payment deadline, Business sector, skills development programs, age and women entrepreneurship using microfinance services in Tunisia.

Hypothesis

The following null hypotheses were constructed and tested.

Hypothesis 01: There is a significant relationship between micro-credit and women entrepreneurial development in using microfinance services in Tunisia.

Hypothesis 02: There is a significant relationship between micro-savings and women entrepreneurial development using microfinance services in Tunisia.

Hypothesis 03: There is a significant relationship between age and women entrepreneurship using microfinance services in Tunisia.

Hypothesis 04: There is a significant relationship between skills development and entrepreneurship using microfinance services in Tunisia.

Hypothesis 05: There is a significant relationship between Business sector and entrepreneurship using microfinance services in Tunisia.

Literature review

Studies of Women's entrepreneurship and empowerment have been the subject of several studies. These studies were done either at the request of funding agencies or as academic work or to better target the use of funds to achieve specific social and economic objectives. Chatterjee et al. (2018) show that group-based financial services to micro-enterprises empower women borrowers and translate into economic upliftment. Neeti Mathur et al. (2021) found that microfinance implementation tools— micro-credit, micro-savings, skill development, business assistance have the significant link with entrepreneurship development. Attention has been paid to microfinance as one of the contributors to poverty reduction, women's empowerment, health, education, democratization, and environmental improvement (Mayoux 2001a; Chandrasekar and Prakash, 2010).

Existing studies on the impact of micro-finance on women's empowerment vary considerably in terms of the findings of these studies and the measures and indicators of women's empowerment used. In the existing literature, it is clear that there is no consistent measure of female empowerment; however, some indicators have always been seen as the most critical determinants of empowerment in most studies.

Some of these critical indicators used include mobility, political and legal awareness, economic security (Hashemi et al. 1996, Steele et al. 1998), decision-making capacity (Mizan 1993; Pitt et al. 2006, Steele et al. 1998), and increasing assets and controlling those assets (Goetz and Gupta 1996; Montgomery 2005). It is intended that targeting micro-finance programs toward women can empower them in various aspects of their lives. In addition, women are considered reasonable credit risks (Garikipati 2008) and are therefore less likely to abuse the credit they receive. While some studies show that micro-finance has developed at the confidence level of women by helping them increase their income opportunities (Hashemi et al. 1996; Pitt et al. 2006), others suggest that loans given to women in most cases end up with their husbands or under their control, which in the long run makes women even more vulnerable (Garikipati 2012; Rahman et al. 2009).

Women's empowerment was also associated with the length of time. Women were considered clients of MFIs. Above all, women's solidarity groups confirm that women's participation in micro-credit programs helps develop social networks while improving levels of access to the economy and financial resources. The establishment of these social networks allows women to know each other. It also increases the level of awareness and political and social inclusion among women (Bali et al. 2014).

In addition, with the support of IMFs (which includes micro-credit and training), women can gain better control over their financial assets, including their savings and income (Li et al. 2011a). This, in the long term, affects their participation in household decision-making (Hashemi et al. 1996; Pitt et al. 2006). Most MFIs aim to help women achieve financial independence. For example, it is said that women can become economically self-sufficient when they begin to take control of their financial assets (Li et al. 2011a). Anderson and Eswaran (2009) point out that with economic emancipation, there is an increase in female empowerment, usually highlighted in purchasing decision-making. In addition, Armendariz de Aghion and Morduch (2005) argue that micro-finance affects women's bargaining power and the level of resources available. Steele et al. (1998) often find that micro-finance has not significantly impacted women's decision-making capacity. Rahman et al. (2009) also found no significant impact of micro-finance on women's empowerment.

In this respect, although micro-finance positively affects women's empowerment and the accumulation of resources, existence, however, various dimensions of empowerment, some of which are hampered by the presence of social and cultural constraints. For example, Montgomery et al. (1996) argue that micro-credit programs exacerbate discrimination against women and reinforce gender inequality. In some cases, men are excluded from micro-credit programs, which reinforces inequalities, generating friction between men and women in the family. This is because men feel threatened. After all, they are convinced that they may be less favorable to women (see, for example, Mayoux 1999; Armendariz de Aghion and Morduch 2005).

Most studies are either examining the context of the environment in which microfinance operates or investigating the potential effect on macroeconomic variables, such as gross domestic product or inequality. There is some evidence to suggest that microfinance is indeed effective and beneficial to clients (Imai et al. 2010; Imai and Azam 2012), while other wide-ranging literatures suggest the opposite (Hulme and Mosley 1996; Hulme 2000; Copestake 2002; Hoque 2005; Shaw 2004; Nghiem et al. 2012). This study's interest is to clarify a theme that has not been much discussed, namely the direct link between microfinance and women's entrepreneurship and empowerment.

Research methodology

The data source

The population studied is the total number of women receiving micro-credit during 2021, 450 women from development associations in the Monastir and Sousse regions. It was based on the records of the requests for micro-credits made by these women to associations belonging to the Governorate of Monastir and Sousse.

For the research study, 450 respondents were selected. These respondents were beneficiaries of micro-credit associations and engaged in their own business, such as artisans, retailers, small-scale manufacturers, producers of agricultural products. The data used are based on 450 loan application files issued within these associations.

These data are qualitative and quantitative concerning socio-demographic characteristics and the borrowing of women.

Data processing is on the basis of basic statistics (number and percentage), logistic regression and Qualitative comparative analysis (QCA).

Our objective is to study the role of micro-credit granted by development associations of women entrepreneurship development in Tunisia.

Modeling methods

Binary logit model

The logistic function used is defined as:

$${Z}_{i} =\mathrm{log}\left(\frac{{p}_{i}}{1-{p}_{i}}\right)$$

where "p" is the probability of entrepreneurship development, from the previous relation, we can have the probability p, that is:

$${p}_{i}= \frac{\mathrm{Exp}({Z}_{i})}{1+\mathrm{Exp}({Z}_{i})}$$

where Zi is the dependent variable. It represents the Development (or not) of the Entrepreneurship.

Entrepreneurship Development: Judged on the basis of the questions like increase in assets of business, family income, turnover of the business, number of buyers, and loan repayment capacity (Neeti Mathur et al. 2021). Table 1 presents all the independent variables of the model.

Table 1 Independent variables
Full size table

FsQCA

Qualitative comparative analysis (QCA) is a technique that is capable of bridging the gap between qualitative and quantitative analyses (Rihoux and Ragin 2009). This method has attracted significant attention on various domains, such as marking (Capatina et al. 2017; Meneses et al. 2016); tourism (Olya and Mehran 2017; Olya and Al-ansi 2018), finance (Isaksson and Woodside 2016; Vizcaíno and Chousa 2016) and economics (Arts and Koning 2017; Aloysius and Zhang 2019). The fsQCA (fuzzy-set Qualitative Comparative Analysis, or AQC) method, developed in political science by Ragin (1987) then democratized in management by Fiss (2009) and (2011). It allows both to take into account the specificities of the cases while adopting a holistic and rigorous approach, thus combining the advantages of qualitative and quantitative methods. The fsQCA method thus makes it possible to highlight the causal complexity underlying many phenomena in social sciences, i.e., phenomena subject to three sources of complexity (Vergne and Depeyre 2016; Ragin 2008). In our study, we used the fsQCA method to examine the robustness of the results found previously.

The fsQCA technique requires that all the variables be calibrated in fuzzy logic with values ranging from 0 to 1. Thus, all the variables will be transformed into continuous variables from 0 to 1, which define their membership level.

The formula for calculation of consistency and coverage can be calculated as follows:

Consistency (\({X}_{j}\le {Y}_{j})=\sum \left\{\mathrm{min}\left({X}_{j}, {Y}_{j}\right)\right\}/\sum \left({X}_{j}\right)\)

Coverage \(\left({X}_{j}\le {Y}_{j}\right)=\sum \left\{\mathrm{min}\left({X}_{j},{Y}_{j}\right)\right\}/\sum \left({Y}_{j}\right)\)

Xj is the membership score in the set of causal conditions, and Yj is the membership score in the outcome condition.

Results and discussion

Results of binomial logit model

As we specified previously, the use of a logistic regression for the modeling of a binary variable is the most appropriate because of the nature of the studied endogenous variable. This technique makes it possible to predict the values taken by a discrete variable from a series of continuous or binary explanatory variables (Trabelsi M and Chichti J 2011).

This paper aims to study the induced effects of the participation of women entrepreneurs in micro-loan programs and test the impact of these micro-credits on entrepreneurship development. Table 2 summarizes the model estimation results using the STATA 14 software.

Table 2 Results of binomial Logit model
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This result indicates that the variables Amount of Micro-credit (AMOUNT) and "Skill development" are positive and statistically significant. This result is evident since the more significant the benefit, the better the situation. On the other hand, we find that the age variable is negative and statistically significant, indicating that micro-credit has a better effect for young women entrepreneurs for creators in the realization of their projects.

The second variable, "DURATION," is significant at the 5% threshold, but its coefficient is negative, implying that the higher the monthly payment, the more the tendency toward the probability of project defeat. So, to ensure that the situation of an entrepreneur (woman), who has just applied for a micro-credit, will be improved after indebtedness, we must think about reducing the monthly payments or tolerating more in the amounts granted. Based on the data collected, it was noted that there is a difference between the amount requested and the amount awarded in most cases. So, if the concern of those in charge is to improve the situation of a person living in precarious situations, we must tolerate the amounts granted, and why not consider going further to the ceiling. At the 10% threshold, the only family status variable determines the characteristics of women and, more particularly, the variable "MARITAL." The single woman does not have much charge by comparing her with a married woman who has children. So the credit obtained improves the situation of a single. The reason for indebtedness variable for « MSAVING» is also significant at the 10% threshold, which implies that the micro-credit obtained improves the beneficiary's standard of living.

For the department, variable for "Education" is not significant. This comes back, perhaps, to the follow-up carried out with the women beneficiaries. The amount obtained may not result in a period of one year. Therefore, it is not possible to know if the women beneficiaries, for reasons of education, are satisfied. Moreover, and for greater relevance, follow-up should normally be done after loan payment and not within one year. This represents a limit to our empirical study. Another limitation in our research is that observing situations after indebtedness is not a direct observation on the ground. It was a telephone report in which the women concerned could hide the truth and may not give accurate information.

In conclusion, and from what we have obtained from the results, it must be deduced that the micro-credit policy has given the funded women an opportunity to get out of precarity and enable them to improve their business.

Results of fsQCA

Table 3 presents the causal configuration in predicting low and high scores of women entrepreneurship development in Tunisia.

Table 3 Causal recipes of entrepreneurship development
Full size table

The main objective of this estimate is to examine the relationship between micro-credit, Micro-saving, skills development programs, micro-credit payment deadline, Business sector and age of beneficiaries of micro-credit allocated by MFIs (microfinance institutions) in Tunisia.

One consistent and sufficient causal recipe explained the Entrepreneurship Development (coverage: 0.131, consistency: 0.773). The model (M1) suggests that females with high amounts of micro-credit, low repayment period (DURATION), and working in service sector have a high score of Entrepreneurship Development. These factors have a positive effect on opportunity for entrepreneurial activity. These results are in line with Karlan and Valdivia (2011) and Neeti Mathur et al. (2021), who concluded that microfinance has had a positive impact on entrepreneurship development.

The second model (M2) suggests that young married female working in service activity which low amount of micro-credit and high micro-savings, lead to have a high score of Entrepreneurship Development.

The third model indicates that older, less-educated female working in service sector, who benefited from low amount of micro-credit and useful in improving the earning capacity, results in increase in assets of business and loan repayment capacity.

Model 4 advises that female working in service benefited from low amount of micro-credit and less deadline of repayment lead to the improvement of the assets of business which confirms the significant relationship between micro-credit and entrepreneurial development in using microfinance services in Tunisia.

Conclusion and policy implications

Throughout this chapter, an attempt was made to provide an overview of the Tunisian experience with micro-credit. The evolution of microfinance and Women’s entrepreneurship in Tunisia was the subject of two first sections.The last section relates to an empirical investigation: the study of the results of a small survey carried out among certain women receiving micro-credit from these development associations. The main objective of this study is to investigate the effects of microfinance on women's entrepreneurship and empowerment in Tunisia It has been found that microfinance implementation tools— micro-credit, micro-savings, skill development, Business sector have the significant relationship with entrepreneurship development. Micro-finance has spread remarkably, thanks to the proliferation of agencies that help and finance people with low income. Its emergence has been fostered by information from informal finance and the desire to institutionalize everyday practices, by the need to integrate the financial excluded, and by broadening the concepts of sustainable development relating to decent living conditions and the participation of women. Tunisia's microfinance experience is rich and has benefited from the arrival of new players in the 1990s. Micro-credit policy is the main step in this development process. In collaboration with other organizations, such as NGOs and specialized financing funds, the Tunisian Solidarity Bank plays a crucial role in applying for micro-finance projects, entrepreneurship development and improve the living conditions of households. The credits are effectively accessible to the people or the gatherings to begin the business, which prompts new employment opportunities, which address the joblessness issue. Microfinance works at a fundamental level by providing support, it works without loan collateral and provides skills development assistance to marginalized rural people.