Author: Shilpa Bhongir
In July 2006, The New York Times profiled Narcisa Kavazovic, a Bosnian woman who first started her sewing business in an abandoned garage in Sarajevo. What began as a small effort to sell sheets and pillows to support her family has now grown into a burgeoning business with 20 workers comprised of mostly women.
Kavazovic, who was also featured in a Dec. 2011 Ted Talk, exemplifies the many female entrepreneurs who are making impacts in their economies. Smart, successful and talented women are change-makers in their societies, but as they try to advance and strengthen their businesses, they are faced with a lack of adequate financial assistance and social support from their respective countries. To overcome such a challenge, there must be a shift in the global attitude towards women’s ambitions.
In today’s economic development climate, women are the beneficiaries of only micro-loans when their ambitions warrant more than just minimal support. For women like Kavazovic who have demonstrated success and hope to expand their businesses further, more must be done to provide medium and large loan packages which specifically target women.
Female entrepreneurs are critical components of successful economics in developing countries throughout the world. A 2006 World Bank Report states that increased women’s labor force participation and earnings historically precipitate reduced poverty and faster growth. According to studies cited by Kiva, one of the largest non-profit microfinance lending agencies, female entrepreneurs tend to use their profits from small businesses to give back to the community by sending their children to school, improving their family’s nutrition and living conditions and employing members of their communities. Women are taking the reins of entrepreneurship throughout the developing world, particularly in Africa where the rate of female entrepreneurship is higher than in any other region in the world, according to the World Bank.
The statistics are clear: expanding women’s economic opportunities is smart economic decision-making. And throughout the world, women’s businesses help support 50 percent of informal employment, according to the World Bank’s 2012 World Development Report (WDR) “Gender Equality and Development.” Women are not only prolific in the entrepreneurial world – their endeavors are making real change.
Thus, it is unacceptable that they do not have the access to greater capital and that they still face barriers to expansion. Women are making more than micro impacts in their countries – so why are they left with only micro aid?
For starters, women operating in developing countries may not have access to local capital or infrastructure. Smaller villages may not have proper banking systems that can lend large sums of money to women, or the adequate facilities demanded by the business.
Secondly, women may need training and business development services to achieve requisite advancement. Many women entrepreneurs operating at a local level have a low rate of financial literacy and some microfinancing projects do not provide tailored training programs, according to the World Bank.
Thirdly, women are still less educated in some countries and more likely to suffer career interruptions than men, though gaps have narrowed, according to the 2012 WDR.
Without access to training and education to manage large loans, women are unlikely to receive larger sums of money because they may be viewed as greater risks to lending agencies. Such perceptions also stem from cultural barriers and social norms that prevent women from moving further in their businesses.
Limitations on civil liberties, property rights and overall perceptions of traditional female roles as caretakers can negatively affect a woman’s ability to move up in the workforce or gain a substantial support network. Some argue that women who subscribe to traditional gender roles are less likely to seek management positions, and therefore hinder their own entrepeneurial potential. However when provided with and reaching for the same amount of resources, female entrepreneurs are just as productive as their male counterparts, according to the 2012 WDR. This comparison highlights the point that women aren’t tapping into their full entrepreneurial potential.
Though more resources are certainly needed to support women empowerment, progress is taking shape. In 2012, the World Bank’s International Development Association began the Women Entrepreneur Development Project to provide women in Ethiopia with appropriate skills and employment opportunities. The project provides greater access to financial services, working capital and investment as well as education and business networks that can be tailored to individual female entrepreneurs. Such networks help women access the tools they need to ensure that their loans are handled responsibly and that their businesses can be sustained, even elevated.
Furthermore, both corporations and non-governmental organizations (NGOs) have turned their focus towards addressing female entrepreneurs’ needs. For example, Coca Cola, Dell and Goldman Sachs have created programs to train female entrepreneurs, and the NGO Oxfam launched an investment fund to increase bank lending to developing countries.
Still, a meaningful solution for empowering women in the economy requires a dynamic effort between public and private forces as well as normative shifts in society. Domestic economies need to bolster educational trading programs and increase access to larger financial assistance and loans.
With access to training, capital and social support, women can take even greater strides towards stimulative economic development. It’s time women have the resources to pursue their ambitions – ones that extend beyond than simply the micro level.
Shilpa Bhongir is an undeclared first-year. She can be reached bhongir@oxy.edu.
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