Entrepreneurship

Entrepreneurship is a significant source of women’s economic opportunity – employment and income generation – for both urban and rural women in low-income countries. Women entrepreneurs may participate in a wide range of activities, from undertaking income generation projects in their homes, to selling products in open markets and the street, to owning or managing a business in a fixed location with one or more employees. Typical interventions to increase these women’s earnings include credit, savings and insurance vehicles; business training; technical assistance; women’s enterprises and women’s business networks.
Summary of Lessons
Simply put, capital alone, either as a small loan or grant, is not enough to grow women’s subsistence-level businesses.
Very poor women need more comprehensive services in order to break free from low-earning subsistence-level businesses, rather than single services or small levels of capital (in-kind, grants or loans).
Pairing a relatively high-value asset with specific business training and follow-up technical visits can expand occupational choices and increase earnings. While providing more services is often expensive up front, it leads to a greater standard of living and is also cost effective over time.
In Bangladesh, women who received a choice of a large asset (livestock valued at about USD $140) combined with specific training and follow up visits increased their earnings by 34 percent.
For women with larger, more profitable businesses, loans and grants (capital) yield larger profits, particularly when delivered inkind (e.g., in the form of inventory) so that there is less temptation to divert cash resources from the business for household uses.
Additionally, financial services delivered through mobile phones can effectively help women grow their businesses, because it allows women to keep their financial transactions private.
In Niger, households that received cash via mobile phones bought a wider variety of goods, spent less money during crisis periods and grew more types of crops than those receiving cash using other methods. The researchers hypothesized that these positive outcomes were the result of the low cost of using the mobile to transfer cash and the greater privacy the mobile gave women to elect how to spend the transfer.
Business training has been shown to improve business practices, but does not increase the profits of subsistence-level women-owned firms.
Increasing the quality and duration of training, providing follow-up customized technical assistance and targeting women running larger sized firms shows promise in helping women increase their earnings.
There is growing consensus that providing women and girls with access to reliable savings products is a smart investment that is proven to increase the earnings of self-employed women.
Research Commissions
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Improving the Productivity and Earnings of Women-Owned and/or Managed Enterprises in Developing Countries: What Works?
Christopher Woodruff, David McKenzie Full Commission -
Capital, Skills and the Economic Lives of the Poor: Recent Evidence from Field Experiments
Oriana Bandiera, Robin Burgess, Selim Gulesci, Imran Rasul, Munshi Sulaiman Full Commission -
Subsistence, Transformational and Something in Between
Elisa Gamberoni, Rachel Heath, Emily Nix Full Commission -
Breaking the metal ceiling: Female entrepreneurs who succeed in male-dominated sectors in Uganda
Francisco Campos, Markus Goldstein, Laura McGorman, Ana Maria Munoz Boudet, Obert Pimhidzai -
The Benefits of Women’s Business Networks
Vital Voices Global Partnership -
Women Who Save: A Comparative Analysis of Ecuador, Ghana and Karnataka, India
Cheryl Doss, Carmen Diana Deere, Abena D. Oduro, Hema Swaminathan Full Commission -
Financial Services for Low-Income Women: Opportunities for Economic Empowerment?
Rekha Mehra, Payal Patel, Adithi Shetty, Anne Golla Full Commission -
Mapping Demand for Women's Economic Empowerment Projects: A Global Analysis of U.N. Women's Fund for Gender Equality Proposals
Anna Wolf, Jade Hawes, Valentina Luketa, Mar Martinez Full Commission