The director of Value for Women sums up the findings of her organization’s research on what women in emerging markets need in order to launch more successful businesses.
By Rebecca Fries (Director, Value for Women)
Women entrepreneurs in Nairobi, Kenya told me recently that there is a need for appropriate role models that they can relate to, as well as for women’s success stories to be shared widely in media. They also said that mentoring was key to their success, and their inputs suggest that tiered mentoring is an effective way to foster growth, as participants are matched based on growth stage of the business and the needs of the entrepreneur.
“I open a magazine, and it’s the same person I have been seeing for the last 5-10 years on the cover. And the people they are showing me are people in corporate Kenya. How is that going to inspire me?” – Kenyan entrepreneur
Participants in our study overwhelmingly indicated that moral support from family was also key to their success, and that the lack of this support is a major deterrent to growth. Clear also was that as women become successful entrepreneurs, they are still expected to fulfill ‘traditional’ roles in the household, caring for family members´ basic daily needs and well being, and that this burden has yet to be shared by their male partners and household members.
Women-led Enterprise Makes Economic Sense
…and is good for families and communities. Investing in women-led small and growing business is key for overall economic growth in emerging economies, and increased evidence makes clear that women’s leadership as entrepreneurs has positive effects on women themselves, on families and on communities. For women to succeed in growing their businesses and to being competitive in the small and growing business sector (i.e., beyond microfinance) they need equal access to financial capital and simultaneous access to appropriate capacity development and support.
Women face different social pressures and challenges that increase the need for informal supports from family and peers, as well as from other women entrepreneurs. While technical capacity development services are key, it is also important to recognize the need for support that includes role modelling by other successful women and mentoring that is appropriate to the context and to the industry the business works in. Examples and models of male entrepreneurs are easier to find and even ubiquitous, and women also need to be inspired by relatable success stories.
Why the Focus on Women?
In order for women to be successful in the small and growing business sector, it is important to recognize underlying issues that affect their access to the skills, resources and opportunities needed to thrive. An imbalance of power exists globally between women and men, which leads to differential access to opportunities, to resources and assets. This limits personal, social and economic growth for women, men, families and communities; and is a product of discrimination, which is upheld by cultural norms, values, and beliefs about gender roles. This imbalance in conditions and the positions of men and women in society has resulted in greater obstacles for women in changing their own situation, including a women’s path to successful entrepreneurship. Progress down this path is often hindered by social and cultural expectations that women cannot be successful in the business world, as success in this world has often been defined historically by male participation.
The playing field is even more unequal for indigenous women, women of colour, and women who experience multiple discriminations. In addition, one-in-three women in the world experience violence — a major barrier to women’s economic and social participation. This complex reality is difficult to sum up, and is not universal nor homogeneous for women. However, it is important to recognize that this reality effects how women’s path to success is determined, and also points to the need to overcome these complex social and cultural barriers in addition to barriers in accessing the skills, tools and finance women need to become drivers of economic change in the SME sector.
Positive Effects on Women, Families and Communities
The research carried out on opportunities and barriers to women’s participation in entrepreneurship results pointed to positive effects of women-led businesses on economies, on women themselves, their families and communities. Women told researchers that in addition to increased self-confidence, being an entrepreneur also inspired them to use their power to invest in their families and communities. They also indicated investment in employee growth, and the provision of a more positive work environment for employees compared to their male counterparts. They also reported feeling inspired to act as role models for next generation of women entrepreneurs.
Barriers to Investment in Women-led Enterprise
Despite increasing recognition of the benefits of investing in women-led enterprise globally, barriers still exist for women, especially in emerging economies. Barriers are often related to accessing appropriate finance for businesses falling within the “missing middle” range — between the top end of microfinance loans and the bottom end of commercial bank business loans. This is typical in the SME-SGB sector, but often exacerbated for women in the sector, due to cultural norms that can hinder access to loans, including loan officer bias, the lack of access to assets or collateral, as well as differential access to support services such as capacity building, networking, and mentoring.
The research highlights a need for holistic and integrated support services for women entrepreneurs, in order to help them compete on a level playing field with men. This implies helping them overcoming barriers related to access to finance and access to capacity development, as well as diminishing the cultural and social barriers that limit women’s ability to participate as freely as men in the small and growing business sector. The great news is there is growing interest on behalf of organizations and networks to figure out how to do this, and this study reflects that interests of many investors, commercial banks, capacity developers, NGOs and academics invested in collaborating to increase investment in women.
The research study was carried out by Value for Women Ltd, with financial support from the Aspen Network of Development Entrepreneurs, the active participation of the members of the network, as well as financial support from BiD Network and ING Bank Sustainability and the Cherie Blair Foundation for Women.
Value for Women Ltd is a UK-based social enterprise that recently released a research video and report titled “Beyond the Threshold: Investing in Women-Led Small and Growing Businesses: that provides recommendations for investors, commercial banks, capacity development organizations on how to maximize their support to women in the small and growing business sector, with a focus on emerging economies.
Rebecca is the director of Value for Women and resides in Mexico City. She has worked for over a decade advising on gender issues with several international NGOs in Latin America. Rebecca leads Value for Women’s underlying aim to promote transformative change towards gender equality through economic empowerment of women.