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.

 

Mapping Demand for Women's Economic Empowerment Projects: A Global Analysis of U.N. Women's Fund for Gender Equality Proposals

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What kinds of economic empowerment programs would implementing organizations around the world ask for if they could speak directly to donors? While practitioners and policy-makers often use research to gain a clearer understanding of what types of programs work well for women, it is rare to have insight into the kinds of projects that are most in demand in various contexts around the world.

Breaking the metal ceiling: Female entrepreneurs who succeed in male-dominated sectors in Uganda

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Expanding access to commercial credit is a key ingredient of financial development strategies. There is less consensus on whether expanding access to consumer credit helps borrowers, particularly when loans are extended at high interest rates. Popular skepticism about "unproductive," "usurious" lending is fueled by research highlighting behavioral biases that may induce overborrowing. We estimate the impacts of expanding access to consumer credit at a 200% annual percentage rate (APR) using a field experiment and follow-up data collection.

Financial Services for Low-Income Women: Opportunities for Economic Empowerment?

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M-Pesa is a mobile phone based money transfer system in Kenya which grew at a blistering pace following its inception in 2007. We examine how M-Pesa is used as well as its economic impacts. Analyzing data from two waves of individual data on financial access in Kenya, we find that increased use of M-Pesa lowers the propensity of people to use informal savings mechanisms such as ROSCAS, but raises the probability of their being banked. Using aggregate data, we calculate the velocity of M-Pesa at between 11.0 and 14.6 person-to-person transfers per month.

Women Who Save: A Comparative Analysis of Ecuador, Ghana and Karnataka, India

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Expanding access to commercial credit is a key ingredient of financial development strategies. There is less consensus on whether expanding access to consumer credit helps borrowers, particularly when loans are extended at high interest rates. Popular skepticism about "unproductive," "usurious" lending is fueled by research highlighting behavioral biases that may induce overborrowing. We estimate the impacts of expanding access to consumer credit at a 200% annual percentage rate (APR) using a field experiment and follow-up data collection.

The Benefits of Women’s Business Networks

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Individuals and business owners engage in an increasingly complex array of financial decisions that are critical for their success and well-being. Yet a growing literature documents that in both developed and developing countries, a large fraction of the population is unprepared to make these decisions. Evidence on potential remedies is limited and mixed. Two randomized trials test the impact of financial training on firm-level and individual outcomes for microentrepreneurs in the Dominican Republic. We find no significant effect from a standard, fundamentals-based accounting training.

Subsistence, Transformational and Something in Between

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Microcredit has spread extremely rapidly since its beginnings in the late 1970s, but whether and how much it helps the poor is the subject of intense debate. This paper reports on the first randomized evaluation of the impact of introducing microcredit in a new market. Half of 104 slums in Hyderabad, India were randomly selected for opening of an MFI branch while the remainder were not. We show that the intervention increased total MFI borrowing, and study the effects on the creation and the profitability of small businesses, investment, and consumption.

Capital, Skills and the Economic Lives of the Poor: Recent Evidence from Field Experiments

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Expanding access to commercial credit is a key ingredient of financial development strategies. There is less consensus on whether expanding access to consumer credit helps borrowers, particularly when loans are extended at high interest rates. Popular skepticism about "unproductive," "usurious" lending is fueled by research highlighting behavioral biases that may induce overborrowing. We estimate the impacts of expanding access to consumer credit at a 200% annual percentage rate (APR) using a field experiment and follow-up data collection.

Improving the Productivity and Earnings of Women-Owned and/or Managed Enterprises in Developing Countries: What Works?

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Individuals and business owners engage in an increasingly complex array of financial decisions that are critical for their success and well-being. Yet a growing literature documents that in both developed and developing countries, a large fraction of the population is unprepared to make these decisions. Evidence on potential remedies is limited and mixed.

The Labor Market Impacts of Youth Training in the Dominican Republic

We report the impacts of a job training program operated in the Dominican Republic. A random sample of applicants was selected to undergo training, and information was gathered 10-14 months after graduation. Unfortunately, people originally assigned to treat- ment who failed to show up were not included in the follow-up survey, potentially compromising the evaluation design. We present estimates of the program effect, including comparisons that ignore the potential nonrandomness of "no-show" behavior, and estimates that model selectivity parametrically.

Failure vs. Displacement: Why an Innovative Anti-Poverty Program Showed No Net Impact

We present results from a randomized trial of an innovative anti-poverty program in India. Instead of a safety net, the program provides "ultra-poor" households with inputs to create a new livelihood and attain economic independence. We find no statistically significant evidence of lasting net impact on consumption, income or asset accumulation. The main impact was the re-optimization of time use: sharp gains in income from the new livelihood were fully offset by lower earnings from wage labor.

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