In this paper, we examine the impact of microcredit on labor supply of men and women and
subsequently investigate whether microcredit can reduce employment gap between men and
women in Egypt. Overall, we show no significant effects of microcredit on labor supply of men.
Yet, we find a strong effect on employment of women aged 22 to 65. Borrowing from a microcredit
source increases the probability of working for women by 0.071. Since the proportion of working
of women was around 2.1%, it implies microcredit can increase the proportion of working of
women by around 30 percent. Using decomposition analysis, we find that micro-credit can reduce
the employment gap between men and women by 0.43 percentage points. If 20 percent of women
obtain microcredit, the employment gap between men and women would be decreased by 4.3
percentage points.