NEW YORK – While Africa relies on its oil and other natural resources for economic development and sustainability, it appears that one resource remains untapped: the power of businesswomen.
In this case, the solution to poverty in Sub-Saharan Africa, or SSA, may be less complicated than experts and economists think. Data from the International Finance Corporation, or IFC, shows that women are responsible for more then 80 percent of food production in this region, yet “less than 12 percent of agribusiness investments are directed at women smallholder farmers.” This percentage of output by women is considerable, given that they represent only half of the SSA population.
The Harvard Business Review reported that roughly $20 trillion in global consumer spending is controlled by women, yet due to regulations on business, they are unable to access the market freely with the same power as men. The IFC has deemed this a ‘missed opportunity’ and acknowledges the economic benefits that could be reaped if both sexes were allowed to participate in business equally.
Aware of the potential for economic growth held by women, IFC has implemented its Banking on Women strategy to help empower and advance female entrepreneurs. The program targets geographic areas home to environments conducive to the development of small to medium-sized enterprises, or SMEs, and works to invoke the support of financial institutions.
Through the use of investment capital, IFC makes it possible for banks to adhere to more inclusionary practices that allow women to access their services. IFC also provides advisement to financial institutions with the intention of readying and encouraging them to make themselves available to women. Female entrepreneurs may also be trained in areas including management, planning and financial literacy so that they can further promote their businesses with an added sense of confidence and ease.
One of history’s largest successes in this kind of banking is the acclaimed Grameen Bank, a Bangladeshi microcredit institution owned predominantly by its female shareholders who fall into the rural poor sector. While Grameen Bank is serving the purpose of providing investment capital to female entrepreneurs and SMEs, the bank has been challenged since 2010 by the country’s government which has threatened to take ownership of it which would consequently defeat its success. This threat is reflective of the reluctance of certain governments to empower women based on inherent sexism within societies.
If regions such as SSA are to truly be lifted from poverty, they must be able to take full command over all potential sources of income. This cannot be limited solely to oil exports and minimal business products in the case of SSA, rather these sources must be expanded to include those who have already shown their ability to contribute. Women are among one of the wisest candidates in which to invest, given their already high level of production. Now SSA and other under-developed areas must reform business regulations and acknowledge the clear potential of female entrepreneurs so that it may be realized in the form of economic growth and prosperity.
– Amy Russo