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Desarro. soc. | eISSN 1900-7760 | ISSN 0120-3584

Impacts of Financial Inclusion on Micro-Businesses: Factors Explaining Business Growth

No. 100 (2025-07-17)
  • David Rodriguez-Gonzalez
    Harvard Business School
  • Andres Garcia-Suaza
    Universidad del Rosario
    ORCID iD: https://orcid.org/0000-0003-4987-0712
  • Alexander Sarango-Iturralde
    University of Paris I: Panthéon-Sorbonne
  • Juan Diego Mayorga
    Universidad del Rosario
  • Alvaro Pretel-Meneses
    Fundación WWB
  • Soraya Husain-Talero
    Fundación WWB
  • Lina Zarama
    Fundación WWB
  • Juan Camilo Urbano
    Fundación WWB
  • Daniel Giron
    Fundación WWB
  • Natalia Medina
    Fundación WWB
  • Aura Barberan
    Fundación WWB
https://doi.org/10.13043/DYS.100.3

Abstract

Access to financial markets, digitization, and formality have been identified as key factors associated with firm performance. This paper presents a detailed descriptive analysis of the income gap among a group of micro-businesses (MBs) in Colombia’s Pacific region, examining how various factors relate to this gap. Using data from MBs participating in a program by Foundation WWB Colombia and applying the Oaxaca-Blinder decomposition, the analysis shows that formal MBs owned by men—with stronger financial inclusion and digital skills—tend to generate higher income than their counterparts. Complementary qualitative fieldwork reveals that micro-entrepreneurs often perceive informal credit as more attractive than bank credit due to its easier access and greater payment flexibility. These findings suggest that policies promoting women's empowerment, formalization, digital literacy, and access to financial services may contribute to narrowing these income gaps among MBs in Colombian’s Pacific Region.

Keywords: financing, digital skills, informal sector, gender, Colombia

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