The Importance of Female Entrepreneurs

Today, 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

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.
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.
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.
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.
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

In countries like the United States, female entrepreneurs account for 46.8 percent of the total businesses. The majority of these businesses are classified as small businesses, having fewer than 500 employees, but they generate almost $500 billion in payroll annually. This situation is worse in developing countries since women’s rights are not fully achieved and the opportunities for women to develop their own businesses are much more difficult to come by.

The reasons for Fewer Female Entrepreneurs

Why are there still fewer amounts of businesswomen than men not just in developing but in developed countries as well? Although developing countries may advocate more for women’s economic development, little is actually being done to provide more opportunities to change it. Since women’s failure rates are not that significantly different from those of men, researchers believe that gender bias is at fault and, thus, inhibiting the growth of women in the economy.

There is evidence that suggests that there are many reasons for the differences in the attitude about gender in business. One reason is that women and men often have different socioeconomic characteristics. If economists were to reform education, wealth, family and work status, those differences would disappear.

The Obstacles for Female Entrepreneurs

Africa remains one of the most successful leaders for efforts regarding female entrepreneurs. But, even the most successful countries still lack leadership, capital and professionalism, not to mention the inability to find affordable solutions in regard to childcare.

Countries like Japan have taken these shortcomings and transformed them into positive aspects of the economy. Womenomics is the idea that the advancement of women and economic development are necessarily linked. This philosophy is becoming widespread among developing nations. In Japan, these sorts of reformations can be credited to Prime Minister Shinzo Abe. Since taking office, Abe has generated a larger female labor force rate than that of the United States.

Some other countries have also made several reformations propelling womenomics. Jordan has increased women’s enrollment in schools by 37 percent. Turning these rates into economic success, however, still remains a challenge. Many studies suggest that economic growth for women needs to be viewed as desirable and attainable for the majority of society.

Female entrepreneurs also struggle with the duality of a society that places more value on a familial lifestyle. For example, a woman may own a business, but her time at work is often limited by her duties at home. Data in developing countries assert that many women leave the business lifestyle to return to familial duties.

A study regarding the results of holding executive positions for women in Norway revealed that the majority of people believe there should be established quotas to include women in management in companies. The results of the pole were 74 percent in favor of those quotas. Later studies showed that as women in the workplace reach a certain age, the stigma associated with their work duties do too.

Curbing the Stigma

Shifting the thought process among thousands of different demographic structures isn’t easy, but it is clear that the majority of the world needs higher female entrepreneurial participation rates. Reforming education, wealth, family and work status are not projects that take only months to complete, rather they need a comprehensive and flexible government that is willing to take on the challenge for years to come.

There are several ways to start thinking about reforming the factors for female entrepreneurs. Creating workshops to propel female economic empowerment is a start. The United Nations Capital Development Fund (UNCDF) is doing just that. They are working to find projects for investment as well as provide training to work under the Women’s Economic Empowerment Index (WEEI).

By ending the stigma associated duties deemed appropriate for females, both developing and thriving countries can further increase the chances of positive economic outcomes. Education and awareness programs are important components to overcoming these gender-related stigmas.

Financial Inclusion

Governmental structure and large economic aid can advance female economic empowerment too. “We’ve known for a long time that access to financial services can be a powerful driver to help people lift themselves out of poverty. With a concerted push from governments, the private sector, and multilateral institutions including the World Bank Group, we believe we can close this gap,” said World Bank President Jim Yong Kim in a meeting attempting to accelerate the growth of women’s empowerment.

The World Bank also states that simple financial education can greatly increase the chances of creating female entrepreneurs. There are so many aspects that can improve. For example, according to the World Bank, fewer than 10 percent of women in developing countries own a bank account. Access to financial institutions is an essential part of a successful business, which is why the organization started the Women Entrepreneurs Finance Initiative. This initiative will provide financing opportunities for women who own businesses in developing countries.

Donations from the World Bank Group, education and female empowerment workshops to end stigmas are some of the best ways in which the women can become involved and empowered in the workforce. It won’t happen quickly, but when it does, the economic benefits will surpass previous stigmas surrounding women in business.

– Logan Moore

Photo: Flickr

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