SEATTLE — Only a limited number of women in developing countries open businesses. Lack of access to capital and overall education, along with societal restraints, hold back female entrepreneurship. Former first lady Michelle Obama who said, “Educated girls grow into successful women…as they should they reach back and help other woman and girls along after them.” Investing in female entrepreneurship has a lasting impact on the systemic conditions that contribute to gender inequality, like the proportion of women that make their own money.
In most developing countries, women are seen as child bearers and are more prepped for marriage than business. Most girls in poorer countries marry early and have families quicker. With a lack of access to education regarding puberty, the rate of pregnancy is significantly higher.
A pilot program in Uganda took girl participants and provided vocational training along with education on reproductive issues, such as sex and marriage. After two years, 72 percent of participants were more likely to engage in income-generating activities.
Societal pressures and restrictions also limit female entrepreneurship. In several African countries, a male relative’s signature is needed to create a bank account or apply for a loan. This is why programs, such as the 10,000 women initiative conducted by Goldman Sachs, are so important.
Access to capital eliminates one of the key components of gender inequality and thus, affects rates of female entrepreneurship. However, if society as a whole does not support these businesses, they cannot flourish.
As reported by the International Finance Corporation, nearly 70 percent of female-owned small and medium-sized businesses in the developing world are reported to be unserved or underserved by financial institutions. With loans not common, women have a lack of access to funding.
With loan facilities created by Goldman Sachs, 100,000 female entrepreneurs have been given access to credit. While this does not completely eliminate the problem, it does enable even more women in poor countries to start enterprises. Uganda is an example of a country that would be perfect for a capital-based program combined with education to improve female entrepreneurship. Even though female entrepreneurship isn’t prevalent, it is accepted.
If certain factors are eliminated, programs granting access to capital and education can actually significantly improve female entrepreneurship rates. The potential for growth is visible. For certain developing countries, like Bangladesh, society must change in order to eliminate gender equality because women are not seen as workers. In other instances, specific programs to educate or provide access to capital can effectively alleviate the barriers female entrepreneurs face.
In developing countries, conditions of poverty, such as societal pressure and widespread unemployment, direct the role of provider to men. Educating girls and women helps alleviate the problem by making the school and business environments more competitive, with the next innovation or product just a short idea away from being funded.
– Nick Katsos