Investing in Women Entrepreneurs
Through our Women Mean Business campaign, we highlight the multiple reasons why more investment in women entrepreneurs is needed. We also share our specific recommendations.
As we navigate through the COVID-19 pandemic, we call on decision makers to support women-led micro and small enterprises as an explicit part of international COVID-19 responses. Through our Women in Enterprise programme, supported by the H&M Foundation, we have shown that, with the right support, women entrepreneurs living in poverty can contribute to community resilience and economic recovery during and after this crisis.
A Major Opportunity
Women mean business. This is particularly the case in low-income countries. 37.8% of women in low-income countries intend to start a business within three years.1 Women are committed to their businesses: Participants in CARE’s Women in Enterprise programme re-invested 39% of their income back into their business. The number of women entrepreneurs using their savings for business purposes increased from 53% to 78%.
Women represent the biggest opportunity for economic growth. Research finds that, in a full-potential scenario in which women play an identical role in labour markets to men, as much as 28 trillion USD, or 26%, could be added to global annual GDP in 2025.2
Women increase their income and savings. Globally in the Women in Enterprise programme, daily enterprise earnings increased by 91%. Bank account ownership more than doubled globally, and in Sierra Leone it more than quadrupled.
Investing in low-income communities creates impact. Over 92% of women entrepreneurs said the training helped improve their businesses. Our data shows that groups and networks build women’s agency, providing them with increased access to finance, knowledge and skills. There were multiple examples of community impact during the programme, such as in Ivory Coast where one women’s group built a community health centre with their group savings.
Women stay in business. Across 59 countries, the average global rate for business discontinuance is about 10% lower for women than for men.3 Women entrepreneurs are generally known for strong survival skills in business compared to men, which could be explained by a more carefully planned approach to business strategy.4
Women are good customers. Data from banks serving 22 million customers in 18 countries shows that women outpace men in overall growth in volume of credit (15% vs. 10%) and volume of deposits (17% vs. 14%). Women are strong savers and prudent borrowers, with lower nonperforming loans than men (2.9% vs. 4.2%).5
Entrepreneurship is empowering. Running a business and having an income helped women gain a stronger position at home and in the community. Our data shows that women’s achievements make them feel empowered: having more income, paying the bills without problems, being able to make decisions and being respected by family and community members. We also saw a 33% increase in women taking up leadership positions within their communities.
The case for investing in women entrepreneurs is even stronger when considering the multitude of barriers they face. These include, but are not limited to: harmful gender norms; limited access to finance; lack of business assets; unpaid care; lack of education and skills; an inaccessible business environment; and a global pandemic, resulting in an economic crash.
- Include low-income communities: When funding or supporting women’s enterprise development, ensure this includes women in low-income communities. Enterprise development in these communities provides a pathway to ending (extreme) poverty, advances gender equality and improves women’s economic justice and rights.
- Invest in skills development: Support women with effective business, management, and life skills training to help them advance their businesses and provide a valuable contribution to their families, communities and economies.
- Listen to women: Strengthen women’s visibility, collective voice and representation, for example by supporting role models. Take a participatory approach with women in the development of programming. Invest in redressing harmful social norms that restrict women.
- Invest in peer support: Support the development of women’s groups and networks to help strengthen women’s agency. Peer support can also increase access to finance, knowledge and skills.
- Improve financial inclusion: Develop gender-specific financial products and services, for example by removing collateral requirements or offering alternative solutions, such as loans based on savings group transactions and activities.
- Engage men and boys: Men are critical partners in increasing women’s agency by sharing unpaid care responsibilities, supporting enterprise development and increasing women’s access to markets, products and services.
- Improve the business environment: Work together with local, regional and national Governments to: allocate funding; increase participation in decision-making; improve accessibility for women, such as more accessible business registration processes and better access to markets.
- Support the business case and knowledge base: Gather evidence on value generation and business development, and collect sex and age disaggregated data on enterprise development.
COVID-19 response: Put gender equality front and centre
The COVID-19 crisis risks losing decades of progress on women’s economic justice and rights. It creates an even greater urgency for investing in women entrepreneurs. Here’s what has to happen:
- Provide immediate financial support, including cash grants to meet basic needs.
- Ensure women’s voice, co-leadership, and balanced representation in decision-making bodies and processes.
- Collect sex and age disaggregated data. Collecting this is essential to making informed decisions and providing gender responsive support to business owners and economic recovery.
- Integrate a gender lens throughout the economic response to ensure relief packages reach women and meet their needs.
We will not wait
The women that we work with across the globe women have shown themselves to be astute in business, with their success meaning they are able to support their families and even elevate whole communities out of poverty. As Narcisa from Peru demonstrates: “I want to let people know that women are capable of starting and growing their own businesses and contributing to their communities.”
Pre COVID-19 the World Economic Forum predicted that it would take 257 years before there was economic parity between men and women. This will no doubt be pushed even further back as a result of the global pandemic. We cannot and will not wait. More investment in women entrepreneurs is urgently needed, now more than ever.
1 Global Entrepreneurship Monitor, “GEM 2018/2019 Women’s Entrepreneurship Report”, 2019
2 McKinsey Global Institute, “The Power of Parity: How advancing women’s equality can add $12 trillion to global growth”, 2015
3 Global Entrepreneurship Monitor, “GEM 2018/2019 Women’s Entrepreneurship Report”, 2019
4 Global Entrepreneurship Monitor, “GEM 2018/2019 Women’s Entrepreneurship Report”, 2019
5 United Nations Secretary-General’s Special Advocate for Inclusive Finance for Development, “Annual report”, 2018