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Women and MicrofinanceThe importance of women has been well-documented over time, despite historical disparities in their socioeconomic status. More often than not, women living in impoverished countries face numerous barriers to their financial independence. Although they have entrepreneurial visions for their future, the lack of funding forces their dreams to slowly fade away. In this same vein, at least 1 billion women in these nations do not have access to regular bank services. Perhaps it is time for a new marriage — women and microfinance.

However, the good news is that microfinance has helped countless underprivileged women pursue their aspirations of business ownership. Together, women and microfinance have the potential to destroy the old customs that have stifled women from entering the workforce.

What is Microfinance?

Microfinance is a lending service that provides small, manageable loans to unemployed or low-income people who would otherwise lack access to financial services. Microfinance has already transformed the lives of many women. With the help of organizations like the Pakistan-based Kashf foundation, which has supported impoverished female entrepreneurs since 1996, and FINCA, financial freedom has become an obtainable goal for many. One narrative from a former client, Shamsha Naveed, represents a common yet important testimony of the abuse numerous poor women suffer in Pakistan. Moreover, Naveed’s narrative highlights as well, the economic promise women now have.

Shamsha’s Story: The Power of Female Entrepreneurship

For years, Naveed’s husband sexually abused their daughter and tortured Shamsha mentally and physically. She eventually realized her only option was to leave her cruel marriage and move back in with her parents. Not wanting to be a financial liability to her mother and father, Naveed began stitching people’s clothes as a means to earn an income.

Since her stitching job required her to travel door-to-door, she often encountered insults that blamed her for her failed marriage and lack of fair payment for her work. Yet, despite this harassment and exploitation, Naveed persevered and eventually found her way to the Kashf Foundation where she enrolled in specialized career classes. Eventually, she obtained a loan. Naveed’s business is now flourishing, employing a staff of more than 20 workers which allows this female entrepreneur to successfully pay for her children’s education.

The Foundation of International Community Assistance (FINCA)

The Foundation of International Community Assistance (FINCA) is another top microfinance lending institution. FINCA has long championed the cause of female empowerment. Since the mid-1980s, more than 4 million women have benefited from the organization’s assistance. Additionally, in April 2018, the microcredit company opened a women-only branch in Afghanistan. Not only does the location provide specific lending services to women, but it also offers targeted financial literacy classes and financial products. The Afghanistan office has a staff consisting of more than 90 female employees, including female branch managers.

It simply makes financial sense for emerging nations to foster and harness the earning power of women. Women’s inclusion contributes to regions’ overall economic growth and stability. Furthermore, diversified workplaces promote heightened employee engagement and creativity. An employer whose business fosters gender equality will appeal to a wide range of talented individuals. This, in turn, demonstrates to potential employees that the company values contributions from all people.

Building Bridges to Prosperity

Lending institutions such as the Kashf Foundation and FINCA are well-aware that women are marginalized in developing countries. However, these organizations also understand that financial investment goes beyond money. The true value these female entrepreneurs bring is felt not just by their families, but also by their overall economies. As women and microfinance continue to build bridges that educate, inspire and cultivate confidence in female entrepreneurship — there is hope for transitioning many from poverty to prosperity.

– Kim Patterson
Photo: Pexels

Social Entrepreneurship in Developing CountriesToday, social entrepreneurship is growing rapidly in size, scope and support. An unprecedented number of organizations are using entrepreneurship as a strategy to address social problems like poverty, at-risk youth and hunger. Social entrepreneurs are developing creative and innovative organizations that give people the tools, education and resources to become an entrepreneur. As entrepreneurs, they can serve their own communities, improving health, decreasing hunger, creating safer environments and accessing clean water. Here are five organizations using social entrepreneurship to help create jobs in developing countries.

5 Examples of Social Entrepreneurship in Developing Countries

  1. The Adventure Project
    The Adventure Project works in developing countries seeking out partnerships with organizations creating jobs for their communities. Some organizations include KickStart, LifeLine, Living Goods, Water for People, and WaterAid. The organization chooses partners based on their measurable social impact, a proven track record of success, and readiness to scale. Since its inception, the Adventure Project has empowered 798 people to find a job. This has led to thriving local economies, improved environmental conditions and even reduced mortality rates. In Kenya, cooking over an open fire posed a huge health risk to both people and the environment. Now, stoves are made and sold locally. Masons create stoves and vendors earn commissions for their sales. And because they’re using 50 percent less charcoal, families are saving 20 percent of daily expenses. In other countries, villagers have been trained as health care agents, selling more than 60 products at affordable prices. These health care agents also care for more than 800 people in their communities.
  2. Indego Africa
    Indego Africa is a nonprofit social enterprise that supports women in Rwanda through economic empowerment and education. This enterprise aims to break intergenerational cycles of poverty. To do so, Indego Africa provides female artisans with the tools and support necessary to become independent businesswomen and drive local development.Partnering with 18 cooperatives of female artisans, Indego Africa sells handcrafted products through an e-commerce site, collaborations with designers and brands and at boutiques worldwide. To develop their entrepreneurial skills, Indego Africa provides artisans with training in quality control, design and product management. Indego currently employs over 600 women, 58 percent of whom make over $2 a day. According to the World Bank, $2 a day marks the entry point into Africa’s growing middle class.
  3. Mercardo Global
    Mercardo Global is a social enterprise organization that links indigenous artisans in rural Latin American communities to international sales opportunities. As a result, this organization helps provide sustainable income-earning opportunities, access to business training and community-based education programs. Mercado Global also increases access to microloans for technology, such as sewing machines and floor looms. Mercado Global believes income alone cannot solve long-term problems. Therefore, the organization focuses on both business education and leadership training. In doing so, Mercado Global enables artisans to address systemic problems within their communities. Artisans are given microloans, ideally to purchase equipment that allows them to work more efficiently. They then pay back their loans, allowing another artisan to attain one. Forty-four percent of Mercado Global entrepreneurs held a leadership position within their cooperatives in the last three years. Ninety-six percent participate in the finances of their households. And 77 percent of women voted in their last community election.
  4. Solar Sister
    Everyone should have access to clean energy. And the team behind Solar Sister believes women are a key part of the solution to the clean energy challenge. In sub-Saharan Africa, more than 600 million people have no access to electricity. Moreover, more than 700 million must rely on harmful fuels. However, women bear the majority burden of this energy poverty and disproportionately shoulder the harmful effects. In order to address this issue and create more equity around clean energy and economic opportunities, Solar Sister invests in women’s enterprises in off-grid communities. By doing so, the Solar Sister team builds networks of women entrepreneurs. Women are first given access to clean, renewable energy. Then, they participate in a direct sales network to build sustainable businesses. Centering local women in a rapidly growing clean energy sector is essential to eradicating poverty. This allows helps achieve sustainable solutions to climate change and a host of development issues. Evidence shows the income of self-employed rural women with access to energy is more than double the income of those without access to energy. For rural female wage or salary workers, access to energy is correlated with 59 percent higher wages. Solar Sister is currently helping over 1,200 entrepreneurs. The team is also partnering with Global Alliance for Clean Cookstoves, Sustainable Energy for All, U.N. Women and Women in Solar Energy.
  5. United Prosperity
    United Prosperity is a nonprofit organization providing an online lending platform connecting lenders to poor entrepreneurs across the globe. A Kiva-like peer-to-peer loaning system allows anyone with spare cash to guarantee loans to entrepreneurs in need. Lenders select the entrepreneur they want to support and lend any amount they wish. United Prosperity then consolidates the loan amount and passes it on to the entrepreneur through a local bank. For every $1 given by the lender, the bank makes a nearly $2 loan to the entrepreneur through a partner Microfinance Institution (MFI). Once a loan or a loan guarantee has been made, the entrepreneur’s progress is tracked online. When loans are repaid, lenders get their money back. They then have the opportunity to recycle it by lending or guaranteeing the loan to another entrepreneur. These microloans aim to help entrepreneurs, mostly women, grow their small businesses. United Prosperity has transferred more than $280,000 in loans to 1,300 entrepreneurs. Moreover, MFI helps build entrepreneurs’ credit history with local banking systems, thus encouraging more banks to lend to them.

These organizations are wonderful examples of how social enterprises have effectively empowered locals in the social entrepreneurship space. Through innovation, investment in local resources and talent, and measurement practices, these organizations have helped social entrepreneurs around the world to scale and grow. In doing so, they also address social problems like poverty, at-risk youth and hunger in their community. The results have been improved health, increased economic opportunities, safer environments and increased access to clean water and energy.

Leroy Adams
Photo: Flickr

 EconomyWomen are dominating the African workforce and increasing revenue in many countries. This domination has led many countries to recognize how female entrepreneurship drives the economy through innovation and success as technology continues to advance.

Companies such as Mastercard are traveling to Egypt, Nigeria and South Africa to partner with nonprofit organizations aimed at teaching young girls why they should enter the workforce and how they can make an impact. With these partnerships, organizations, such as the Mini Enterprise Programme, hope that girls and women will take the initiative to enter the workforce in the near future.

In Ghana, women make up more than half of the labor force; if maximally utilized, the additional personnel could lead to increased production of good services by 2.5 percent within one year. One of the benefits of being able to export more products in a year is the increased revenue it brings in to the country. Female entrepreneurship drives the economy in Ghana by helping to build more jobs and providing more opportunities for other women to enter the force.

Female entrepreneurship also drives the economy by using education to teach youth. Companies work with organizations to empower young girls, as they have recognized the potential young girls have to drive the economy in the future. Many women in the field have stepped up as role models and proven that they can start businesses just as successfully as a man.

Furthermore, women are working faster than men to start businesses in many African countries. According to the World Bank, the time required to start a business for women and men increased about a day between 2015 and 2016,  however, women were still, overall, faster than men by one day.

The opportunity to involve women is a positive step forward not only for the economy but for the alleviation of poverty experienced by many around the world. Approximately six out of 10 of the world’s poorest people are women. They are usually the primary caretakers of the family, yet are often denied the opportunity to earn an adequate living.

The initiatives set out by Mastercard and other organizations give hope to women suffering from poverty and promote the continued empowerment of women. Empowering young girls has led to more African countries seeing the benefits of having female entrepreneurship drive their economies.

– Seriah Sargenton

Photo: Flickr