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AbstractThis research estimated the impact of credit uptake (formal, informal, and family) on youth entrepreneurship performance in Benin using panel data from a World Bank survey on enterprise formalization. To address potential endogeneity and ensure the robustness of results, we employed multiple models and estimation techniques (fixed‐effects and Lewbel approach). Our results showed that, while formal credit was most important for larger firms, smaller firms benefited mainly from flexible (informal or family) credit. The impact of credit uptake was generally higher for female‐owned firms. There were also variations in uptake according to the firm owner's age. The impact of formal credit was relatively higher for older firm owners while informal credit impacted more younger owners. The findings highlight the importance of informal and family credit sources, especially for start‐ups and small firms.

In recent years, economic development discourse has moved beyond increasing economic growth to ensuring that growth also leads to reduction in poverty and inequality. This motivates the current study to examine the relationship between economic growth and poverty in Benin. We used data from the 2006 and 2011 Benin Demographic and Health Surveys and computed a multidimensional poverty index using multiple correspondence analysis. The distribution of growth pro‐poorness was analyzed using the Growth Incidence Curves and Non‐Income Growth Incidence Curve. Average multidimensional poverty rate was estimated to be about 55.3 percent. The findings show that while growth has generally been pro‐poor in Benin, there exist disparities across rural and urban households, and for women as well as the elderly. The findings reinforce the need for broader poverty measures and refocusing poverty reduction strategies to marginalized groups in Benin.