Think bigger

Gayle Tzemach Lemmon argues that women in poor countries need resources to tap their entrepreneurial potential and ease the path to taking small ventures and building them up.

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Microfinance can be an important start on the entrepreneurial path, but all too often conversations about women begin and end with the micro. Today, when we think of “entrepreneurs”, we tend to think of men, and when we think of “microfinance,” we tend to think of women. It is time to move beyond the micro when it comes to women.

When I first started reporting on women entrepreneurs in conflict and post-conflict zones in 2005, nearly everyone, from International Monetary Fund officials in their offices to development workers in the field, told me the only women I would find would be “selling cheese by the side of the road.” Women, I was told again and again, did not own the kind of growing businesses that created jobs and economic growth. This, it seemed, was strictly the purview of men.

Although the percentage of women involved in entrepreneurship is generally lower than that of men, there are however exceptions. In Ghana, for example, there are 120 female entrepreneurs for every 100 male entrepreneurs.

Photo: Miguel Samper/Mercy Corps

Even in the poorest and most traditional countries, women own businesses that go well beyond the micro. In Rwanda, I met a gas station owner with several workers, and a woman selling fruits and vegetables – not on “the side of the road” but rather for export to Belgium twice a week. Her work created jobs for eight people at the time, including her husband, and supported her own and several other adopted children. In Sarajevo, Bosnia-Herzegovina, I met a textile entrepreneur, with a new factory near the old front lines, whose company selling bed and bath linens employed 20 people, mostly women, who could now afford to send their own children to school.

In Afghanistan, a country famous for being among the toughest environments for women to thrive, I met a young woman who dared to turn down a well-paying job offer filled with perks from an international aid organization in order to start a business consultancy that she believed would create jobs for herself and many others. “If I go and work with an international agency, they will give me a very high salary, but it is just for me and my family, it will not support other people,” Kamila Sidiqi told me at the time, in 2005. “If I work to start my own company, I will train a lot of people, I will help a lot of people.” Her story is told in The Dressmaker of Khair Khana, a book I wrote that was published in 2011.

According to research conducted by Ernst & Young, women own 40 to 50% of businesses in the developing world, and data from the Centre for Women’s Business Research reveals that in the United States women-owned firms have an economic impact of US$2.8 trillion annually. These trends provide great potential as the belief in the power of growing businesses to help lift a community out of poverty is shared by women across borders and continents. Women around the world are actively building better communities, and though the contexts are different, the challenges they face look remarkably similar:

Similar challenges

First, women face barriers in accessing capital. Globally, female entrepreneurs say that obtaining finances is their greatest obstacle to starting or growing a business. Discriminatory laws and traditions regarding property ownership and inheritance practices exacerbate difficulties women face in accessing collateral for loans. Inheritance often skips over women, and land remains in the hands – and names – of men, leaving women without guarantees acceptable to banks. Many women who already own businesses must thus use cash from their profits to sustain their enterprises, a limitation that hampers their ability to invest and to take on larger contracts.

Second, women face limited access to diversified markets. Social and cultural constraints contribute to women’s reduced mobility, making it difficult for them to develop business networks beyond their local communities. Business networks and associations, when well run, can help to address this constraint, but funding is often spotty for these. Additionally, reaching international buyers is expensive and time-consuming. Women struggle to find new business opportunities as their networks strain to compete with more the expansive networks of male entrepreneurs.

Third, women often lack business management and technical skills, a disadvantage that is a result of broader gender disparities in access to quality education. For example, women account for roughly two-thirds of the world’s 793 million illiterate adults, and in spite of an increase in the ratio of girls enrolled in primary and secondary school, higher enrollment rates have not translated into equal gains for women’s economic empowerment and participation. Business education programmes for women are important because, as the International Centre for Research on Women has found, they “go far beyond technical skills building.” By providing women with the opportunity to expand their businesses, training also increases overall economic productivity and social investment, as women are more likely to invest in education and health care for themselves and their families.

Entrepreneurial potential

Despite these numerous obstacles, the female entrepreneurs I met never gave up. Today, their tenacity should be matched by an investment in resources to tap their entrepreneurial potential and ease the path to taking small ventures and building them bigger. Mentoring women starting businesses and creating financial products tailored to their needs would benefit not just their families, but their economies. As US Secretary of State, Hillary Clinton, explained in a March 2011 article for Bloomberg, women are an emerging market, and when they “have freedom to start businesses, the economic, political, and social benefits ripple out far beyond their own home.” By ignoring half of the entrepreneurial talent pool, countries across the globe cap their economic potential.

Organizations like Mercy Corps, Goldman Sachs’ 10,000 Women, Bpeace, and Peace Dividend Trust, among others, have focused their attention on these businesswomen in nations like El Salvador, Liberia, and Afghanistan, helping entrepreneurs to unearth market opportunities and learn the skills their growing ventures require. Their work should not be the exception, but instead become the rule as the world moves beyond the micro – and dreams bigger for women.

In the past decade, microfinance has won converts worldwide as the best way to lift women out of poverty. Stories of women owning cows, selling flowers, and sewing handicrafts have spread, while the recognition of women’s importance as partners in fighting poverty and creating a more stable world has grown.

Yet, while microfinance is undoubtedly part of the solution, we risk confusing it with the entire solution when it comes to women. While focusing on the virtues of the small, we have largely ignored the medium, along with the contributions and the struggles facing women worldwide who are working to turn start-ups into thriving large businesses.

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● Gayle Tzemach Lemmon is a Fellow at the Council on Foreign Relations, and the author of The Dressmaker of Khair Khana. Since 2005, she has reported on women entrepreneurs in conflict and post-conflict zones, including Afghanistan, Rwanda, and Bosnia-Herzegovina, and now serves as a contributing editor-at-large for Newsweek/Daily Beast. You can find more of her work at www.gaylelemmon.com/journalism/