New Business Creation
Women-owned enterprises make substantial contributions to economic growth, and their number is increasing at a faster pace than men’s businesses. Around the developing world, women own approximately 8 to 10 million small and medium enterprises (SMEs), which account for 31 to 38 percent of all SMEs in emerging markets. Overall, entrepreneurship represents a large proportion of women’s paid work in many countries, and is thus a critical avenue through which to support women’s economic empowerment. Women’s entrepreneurship holds strong potential for spurring economic opportunity and job creation in developing countries. In addition, growing evidence suggests that economically empowering women may reap substantial benefits for the health and well-being of families and communities.
After participating in training, female entrepreneurs had higher sales and higher profits. They also had improved mental health and a better standard of living.
Our findings
Despite this potential, women face a number of barriers that hamper their economic success. In general terms, while global gender-based disparities have been substantially reduced in the areas of health and education, high gender gaps and limited progress in women’s empowerment persist in the economic domain. In entrepreneurship specifically, a multitude of gender inequalities related to time, human and financial capital, and social constraints hamper women’s entrepreneurial entry and growth potential. One of the main challenges female entrepreneurs face is limited access to finance. On average, women have less access than men to basic financial services including checking and savings accounts, as well as to formal credit. At the aggregate level, women also have less education and business experience than their male counterparts, and fewer professional networks that they can leverage to access business-related resources and advice. Legal and regulatory frameworks may also disproportionately disadvantage women.
Our efforts
Our efforts are directed to support women’s entrepreneurship development (WED) attempt to overcome such barriers to women’s business activity. We usually focus on the following five types of interventions:
- Access to finance
- Business development services (BDS), which include business training, business advice or mentoring, technology transfer, business incubation services, business formalization services and strengthening of women’s entrepreneurial associations
- Improving market access for women’s firms
- Creating favorable business enabling environments and
- Efforts to enhance women’s agency and empowerment.
Intervention
WEAN has been working on WED for more than a decade, and has recently sought to take stock of the evidence on the effectiveness of WED interventions from rigorous assessments to help guide its future interventions in the field. Until recently, there has been little robust evidence on the impact of WED interventions. However, in the past several years, a number of rigorous evaluations have investigated the impact of WED interventions on business outcomes, almost exclusively among micro-entrepreneurs. These evaluations have either examined interventions explicitly targeting women, or have reported on sex-dis-aggregated results and have included gender analysis. The purpose of this brief is to provide an overview of the recent evidence on what is known about the impact of WED interventions on women entrepreneurs, and where gaps remain.
Outcome
Entrepreneurship training designed to help women overcome the challenges they face in running their businesses can improve both firm performance and overall levels of well-being. After participating in training, female entrepreneurs had higher sales and higher profits. They also had improved mental health and a better standard of living.
To boost their performance, trained businesses improved their customer service and introduced new products, leading to the overall growth of the market in which they were operating. Both the total sales volume and number of customers recorded in the market increased.