This May day, a call to support the world’s accidental entrepreneurs

Media Contact

Anne McPherson

Vice President, Global Communications email [email protected]

Across the globe, from stalls in outdoor markets, the sitting rooms of modest homes, the sides of busy roads, and elsewhere, poor women are operating their own small businesses by the millions — selling a variety of goods and services, from fruit to cell phones, used clothing to the trendiest hairstyles.

Some aspire to entrepreneurship and can think of no better way to earn a living. But most operate a small business because job opportunities are scarce and they have to do something to keep food on the table, children in school and cope with inevitable life crises. These are the accidental entrepreneurs, eking out a modest living but not thriving.

And it is easy to see why: Many women entrepreneurs are considered “ultra poor,” part of the 1.4 billion people worldwide who are on the bottom of the socio-economic ladder, living on less than $1.25 a day and lacking formal education. They can’t afford essential services like healthcare. And they don’t have access to the credit, networks or mentorship that can help them grow their businesses; most have never stepped foot into a bank.

The International Center for Research on Women (ICRW) is committed to understanding the unique constraints this specific group of women entrepreneurs face, and, in particular, how gender inequality keeps them embedded in poverty. By building the evidence base on what types of economic and social interventions are most helpful to women entrepreneurs in developing countries, we can accelerate their movement out of poverty and into greater prosperity. And research clearly shows that when women prosper economically, their families and communities benefit enormously.

In our effort to continue deepening our research on women’s labor, ICRW has partnered with the International Labour Organization (ILO) to evaluate the impact of one of its longstanding programs for low-income women entrepreneurs. Called Gender and Enterprise Together, or GET Ahead, the training program has been working since 2004 to equip women in more than a dozen countries with key business skills – and confidence – to enhance their small-scale enterprises.

Specifically, ICRW is collecting and analyzing qualitative data to help determine the profitability, growth and survival of small-scale businesses owned by women in four counties in Kenya, all of whom participated in GET Ahead trainings last year. Another partner organization, Innovations for Poverty Action, which specializes in rigorous randomized evaluations, is leading the quantitative data collection and analysis with additional support from the World Bank.

Even though the women I met on a recent data-gathering trip to Kenya are deeply engaged in business – everything from selling fish to running hair salons – they began the training without the skills and habits of a business person. For instance, not knowing how to calculate profits, protect their finances from emergency incursions, seek a loan or market their business. Part of what GET Ahead strives to do is cultivate these business skills among the 18- to 56-year-old women who participate in the training program—helping them transform from accidental entrepreneurs into business people.

Yet small scale women entrepreneurs in Kenya, Bangladesh, Guatemala and elsewhere around the world face unique, gender-related obstacles that hamper their ability to refine their business acumen and grow their small enterprises.

Research shows that women entrepreneurs are often pressured or feel socially obligated to provide money to extended family members or their community once they start experiencing some financial success. They are forced to dig into their profits to support others rather than reinvest in their business. Meanwhile, finding funding to start or help enhance their business is extremely difficult. Securing a bank loan usually requires collateral, which in many countries typically means showing the bank a title deed to a piece of property. However, even when there is a property title, it is typically in a man’s name, meaning that women entrepreneurs must negotiate with their husbands to get a loan – a requirement that cuts into women’s autonomy. And, even if the land is jointly owned, in many countries, women still need their husbands’ permission to offer the title as collateral while men are typically not required to seek their wife’s permission.

Indeed, despite the potential of the ultra poor and other women entrepreneurs, research shows that they often have little access to business or management training and entrepreneurial networks. Goldman Sachs’s 10,000 Women initiative is an example of an initiative trying to fill that gap by providing women who run small- and medium-sized enterprises with a business and management education, access to networks and links to capital. ICRW’s evaluation of the program in India showed that when women had an opportunity to improve their business skills, their confidence mushroomed and their businesses flourished.

Women who aren’t entrepreneurs also face similar constraints in terms of progressing in their careers, whether their workplace is in a kitchen or on a factory floor. For instance, we know that although women comprise approximately 80 percent of the global garment industry workforce, relatively few advance to higher-level management positions, as they have limited opportunities to acquire the skill set to enable their professional and personal growth. Gap Inc.’s Personal Advancement & Career Enhancement or P.A.C.E. program – which equips women garment factor workers with key personal and professional skills – is helping to shift that, according to ICRW’s analysis of the program’s impact in six factory sites.

We need thousands more thoughtful interventions such as P.A.C.E., 10,000 Women and GET Ahead to empower working women around the globe. Women have ample energy, ambition and drive to be economically productive and successful whether at a workplace or in their own business—we need institutions to do their part too:

Financial institutions need to better tailor and market their products and services to women and governments must change land tenure laws or enforce the laws already on the books. Employers need to end discriminatory labor practices and provide low-cost, high-quality access to childcare for families. Schools must equally prepare girls and boys for the jobs and businesses of the future. And, communities and law enforcement must make sure women feel safe when they venture into public spaces for work or to tend their businesses.

By applying such a multifaceted approach, we can ensure that women are not relegated to forever toiling at the margins of economies but are thriving, along with men, at their centers.