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Female entrepreneurs in AfghanistanIt is no secret that women’s rights in Afghanistan have been suffering due to decades of war and Taliban rule in the country. Afghan women have been denied employment, education, healthcare and basic freedoms for years and were punished violently by the Taliban for attempting to find work or go to school. Years after Taliban rule, women are picking up the pieces of a broken society that drove them and many other Afghans into severe poverty. Organizations such as the Women’s Economic Empowerment Rural Development Project (WEERDP) and the Afghanistan Reconstruction Trust Fund (ARTF), both funded and backed by the World Bank, set up savings and loan associations in different communities to allow Afghan women to start their own business. Female entrepreneurs in Afghanistan have the potential to help the economy and poverty within the country.

Women’s Empowerment Projects of the World Bank

International Aid to Afghanistan is essential for empowering its women and bringing communities out of poverty. The World Bank has a variety of programs dedicated to poverty eradication. It implemented the Afghanistan Rural Enterprise Development Project to support Village Savings and Loan Associations (VSLA). VLSAs operate as a community bank that gives out micro-loans to women to create employment opportunities to sustain economic growth. Examples of businesses that have been started are hair salons, tailor shops and bakeries.

While the Afghanistan Rural Enterprise Development Program closed down in 2018, it was replaced by the WEERDP and continues to be backed by the World Bank and the International Development Association (IDA) to ensure steady funding.

VSLA’s are funded by the World Bank and the IDA to ensure sustainable financial institutions are available in Afghanistan, with the hope that they will partner with larger commercial banks in the future.

Benefits of Female Entrepreneurs in Afghanistan

There are roughly 275,684 Afghan women beneficiaries of the WEERDP.  Many of them have had access to financial services for the first time with the program. Many others have taken loans, learned how to repay them and have begun saving for the future. These are valuable life skills for women who were not able to enter the workforce or gain an education in the past.

With the increase of women-run businesses in Afghanistan’s rural communities, VSLA’s can begin to partner with larger banks to begin serving bigger loans to women after seeing the success of the businesses that started with micro-loans. The support of financial institutions is important to give women the confidence to become entrepreneurs, especially in a country where the percentage of women in the workforce has been statistically low. Skills like leadership, management and problem-solving are derived from starting a business and they can be spread throughout communities to strengthen the role of women in the economy.

Skills can even be passed down through generations. Building a structure with programs like the WEERDP is vital for long-term economic growth and success because it can open doors for creativity and innovation for an economy that would benefit.

The Future of Female Entrepreneurs in Afghanistan

Increasing the number of women entrepreneurs with savvy financial skills can benefit the communities of Afghanistan in many ways. Successful women can begin to venture out into local politics and healthcare fields to build on their skills while sharing their talents with the community. Women have important input on what types of businesses are needed for their community and can reduce poverty in specialized ways.

Afghan women make up roughly half of the nation’s population, so their representation is needed to drive economic and societal progress. Having women be visible in the business sector can allow for gender equality to improve in Afghanistan over time, improving the development of the nation as a whole.

– Julia Ditmar
Photo: Flickr

Tony Elumelu FoundationThe ongoing COVID-19 pandemic is affecting nations around the world, including the nations of Africa. Many African nations responded to the pandemic with strict lockdowns and social distancing initiatives, often stronger than that of European nations. However, the people of Africa face a much more severe economic impact. Although poverty reduction measures have been met with success across the continent, roughly 500 million Africans still live in extreme poverty. The sub-Saharan areas of Africa have the highest rates of poverty in the world, estimated at 55% in 2014. Foreign direct investment is down by 40% and 49 million more Africans could fall into extreme poverty in the world’s first global poverty increase since 1988. The Tony Elumelu Foundation hopes to reduce poverty in Africa through entrepreneurship.

The Tony Elumelu Foundation

A nonprofit operating since 2010, the Tony Elumelu Foundation (TEF) fights global poverty in Africa through the funding of entrepreneurs and small enterprises, These are the very types of businesses that the pandemic impacted most, both across the world and in Africa. With an endowment of $100 million, the organization has already had significant success propagating what it terms “Africapitalism,” which is the use of the private sector for economic growth and development.

The EU Partnership

In December 2020, the European Union (EU) announced a formal partnership with the Tony Elumelu Foundation. The plan comes as part of two broader EU strategies: the EU External Investment Plan and the EU Gender Action Plan. It involves technical training and financial support for 2,500 female African entrepreneurs in 2021 across all 54 African countries through 20 million euros in increased capital. Speaking on the partnership, Tony Elumelu, the founder of the TEF, expressed delight in being able to partner with the EU and said the partnership will create great opportunities for African women who have “endured systemic obstacles to starting, growing and sustaining their businesses.” The Commissioner for EU International Partnerships, Jutta Urpilainen, stated that empowering female entrepreneurs is an integral part of creating sustainable jobs and growth.

How Entrepreneurship Helps

In Central Africa, approximately 71% of jobs are in the informal sector. These jobs are particularly vulnerable to lockdowns. The strict measures put in place as responses to COVID-19 have left many of these people jobless. Entrepreneurship creates more stable jobs and allows a country to be more self-sufficient and can be just as effective as foreign or philanthropic aid in fighting poverty.

Even after the effects of the pandemic subside, Africa still has much to do to eradicate poverty. Fostering entrepreneurship is an innovative approach to this economic problem, one that the Tony Elumelu Foundation has seen significant results with, with more than 9,000 entrepreneurs mentored before the partnership with the EU. The full impact of these endeavors remains to be seen but the potential exists for African entrepreneurs to have a major impact on poverty in Africa. The TEF’s partnership with the EU will only intensify these positive impacts.

– Bradley Cisternino
Photo: Flickr

female_entrepreneurs
The World Bank recently established a line of credit for female entrepreneurs in the world’s poorest nations. The program has already helped more than 3,000 female entrepreneurs in Ethiopia start their own businesses and escape poverty.

In poor communities, women are far less likely than men to own valuable assets to use as collateral to get a loan. Without these loans, many business ventures never make it off the ground.

An estimated 70 percent of women who own small or medium-sized businesses are unable to stabilize and improve them because of a lack of funding credit. This challenge creates a huge loss in potential income within a community.

According to World Bank economists Francesco Strobbe and Salman Alibhai, investing in female-owned businesses results in one of the “highest return opportunities available in emerging markets.”

The World Bank is helping to put an end to this opportunity loss and stagnation of female business opportunities by offering female entrepreneurs loans through the International Development Association and several international development organizations in Canada and the United Kingdom.

Between January 2014 and September 2015, Ethiopia’s Women’s Entrepreneurship Development Project disbursed 768 million birr (about $38 million) worth of credit to 3,227 female entrepreneurs. Currently, nearly $2 million in credit is being disbursed each month with an average individual loan size of approximately 219,605 birr (approximately $11,000).

Research shows that female entrepreneurs are more likely to hire other women to work in their businesses, opening up employment opportunities in communities where positions for women were scarce before.

Thus far, 76 percent of the women who have taken advantage of the program are first-time borrowers, unlocking untapped capital and opening up a new route to closing the gendered financial gap.

Despite the majority being first-time borrowers with little to no collateral, the repayment rate is 99.4 percent. Besides the success of the small loans, the program also offers entrepreneurship training to inspired women throughout the nation.

So far, more than 5,000 women have taken advantage of training and hope to enter into the exciting realm of business ownership. This trend is likely to drive down the overall rate of unemployment throughout Ethiopia, which currently stands at 17 percent.

Claire Colby

Sources: CIA World Factbook, World Bank
Photo: Flickr

Beadsforlife
In 2004, BeadforLife was formed to provide women the opportunity to grow by giving them the tools to launch their own businesses. In the past 10 years, members of the beading program have initiated over 2,200 micro-businesses that operate on a very small scale.

Women who are part of the beading program have one task: rolling beads. By doing this, it gives the women a consistent source of income so they are no longer living on less than a dollar a day. The beading program is 18 months long, and every year, about three to four new groups are made. Each group consists of 40 to 60 women that go through three months of training on how to bead recycled paper into jewelry.

In addition to the training that the women get for beading, they also receive training in areas like business so that they will gain the skills needed to launch their own businesses one day. So far, statistical data has proven this method to be successful.

On average, while enrolled in the beading program, women’s income increases to seven to ten times their previous income. For these women, earning a steady income means more than just having money. An income means that they can eat healthier, get the right health care, put their kids in schools and also improve the living conditions for their family.

As part of the program, women must save some of their money so it can go toward a business of their own one day. This is a requirement, because it ensures that most of the women will continue to make money after the program. The promise of a stable future, makes the longevity of the program more effective. There are common businesses that women tend to open and those are: poultry rearing, restaurants, retail stores, vegetable stands, tailoring and renting rooms in their own homes.

BeadforLife has helped thousands of women get their families out of poverty. The organization reaches more than 1.2 million people and has raised millions to fight poverty. Due to the growth and success of the organization, it has expanded its line of products. In Northern Uganda the branch of the program buys Shea nuts. Currently, BeadforLife is partnered with over 760 women to buy Shea nuts during harvest. Products made from the women in this program are available for purchase on the organization’s website.

– Brooke Smith

Sources: BeadForLife, ONE
Photo: Flickr

Indian TREAD Program Empowers WomenThe government of India introduced the Trade Related Entrepreneurship and Assistance Development (TREAD) plan to help women in rural areas of the country. The intent is for greater economic empowerment of such women through financing, training, information and counseling activities, all related to the trade of products and services within the marketplace.

Their research has shown that one of the main barriers for supporting women out of poverty is that distribution and access to credit are next to impossible without an intermediary. So the TREAD plan will work with community NGOs to make sure funds are actually placed in the hands of women. Then, additional infrastructure will be provided for counseling, training, and assistance in selling goods in the market.

Obviously, impoverished women do not have the collateral needed to secure a loan through traditional lending institutions, so this project, with the support of the government, takes down that barrier. Government grants will fund 30% of a project within TREAD, and the rest will be loaned from banks that are participating.

Additionally, NGOs can receive state government grants for undertaking activities aimed at the empowerment of women, such as field surveys, research studies, evaluation studies, designing of training modules, and more. TREAD is a holistic approach to development, identifying what is needed, what works, using real-world solutions to implement change, offering support, and bringing together various institutions to work together.

– Mary Purcell

Source: DCMSME
Photo: ecouterre