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.
Microcredit has rapidly expanded in the past years, providing access to financial services to a large population previously excluded from the financial system. However, whether it helps the poor has been a subject of intense debate on which, until very recently, there was no rigorous evidence. This paper reports the results of a randomized experiment designed to measure the impact of microcredit in rural areas of Morocco. Within the catchment areas of new MFI branches opened in areas that had previously no access to microcredit, 81 pairs of matched villages were selected.
We study the effect of entrepreneurial training on enterprise outcomes, in particular whether business training for (potential) entrepreneurs of small- and medium scale enterprises can lead to an increase in the number of business start-ups or an expansion in the size of existing businesses. We study this question by analyzing the results of business training programs that an NGO held in Central America between 2002 and 2005.
Financiers across the world structure debt contracts to limit the risk of entrepreneurial lending. However, certain debt structures that reduce risk may inhibit enterprise growth, especially among the poor. We use a field experiment to estimate the short- and long-run impacts of varying the term structure of the classic microfinance loan product.
Nearly 60% of Uganda's population is aged below 20. This generation faces health challenges associated with HIV, coupled with economic challenges arising from an uncertain transition into the labor market. We evaluate the impacts of a programme designed to em- power adolescent girls against both challenges through the simultaneous provision of: (i) life skills to build knowledge and reduce risky behaviors; (ii) vocational training enabling girls to establish small-scale enterprises. The randomized control trial tracks 4,800 girls over two years.
Can cash transfers promote employment and reduce poverty in rural Africa? Will lower youth unemployment and poverty reduce the risk of social instability? We experimentally evaluate one of Uganda's largest development programs, which provided thousands of young people nearly unconditional, unsupervised cash transfers to pay for vocational training, tools, and business start_up costs. Mid_term results after two years suggest four main findings. First, despite a lack of central monitoring and accountability, most youth invest the transfer in vocational skills and tools.
Identifying the determinants of entrepreneurship is an important research and policy goal, especially in emerging market economies where lack of capital and supporting infrastructure often imposes stringent constraints on business growth. This paper studies the impact of a comprehensive business and financial literacy program on firm outcomes of young entrepreneurs in an emerging post-conflict economy, Bosnia and Herzegovina.
In economies characterized by low labor demand and high rates of youth unemployment, entrepreneurship training has the potential to enable youth to gain skills and create their own jobs. This paper presents experimental evidence on a new entrepreneurship track that provides business training and personalized coaching to university students in Tunisia. Undergraduates in the final year of licence appliquee were given the opportunity to graduate with a business plan instead of following the standard curriculum.