SHOPPING FOR WOMEN IN ENTERPRISETweet
Women’s entrepreneurship is not just a passing media fad and it is safe to assume that it is actually a real force that is shaping new ideas for socio-economic change around the world.
Enterprises helmed by women make a significant and distinct contribution to the global economy. These enterprises also have the potential to generate jobs, stimulate economies, spur innovation, transform industries and strengthen communities.
Having said this, an important question that arises is what the industry is doing to encourage the economic participation of women entrepreneurs if the benefits are so obvious and diverse.
An evaluation of economic participation of women-led businesses reveals some of the following characteristics for women owned enterprises:
They operate primarily in the retail and wholesale sector
They are at least 50% smaller than SMEs owned by men (in terms of annual sales and total assets)
They usually borrow micro loans i.e., less than US$10,000 from formal financial institutions
They borrow primarily for the purpose of working capital financing
They usually provide land /real estate as collateral
They often pay a higher rate of interest than SMEs led by men/others
They have a limited access to capital or the knowledge to choose the right kind of financing for their businesses
They have little or limited access to an influential network
Through my work on gender equality and women’s entrepreneurship and empowerment, I have learnt that investing in women in not only a matter of ensuring social and financial equality but also yields high returns which they tend to pay forward.
Investing in women’s economic participation, therefore, has a positive multiplier effect. When women owned enterprises thrive, a wider net is cast on those that benefit from business success, as they are more likely to share the reward with others. This is why it is so important that this narrative moves from discussion and debate, to being a critical element of policy frameworks that encourage entrepreneurship and ultimately equitable socio-economic growth.
The limited participation of women in economic endeavour is both a both social and economic phenomenon. However, as the complex interdependence of business environments and social structures increase, and gender roles evolve, it is vital now, more than ever, to enhance opportunities for women entrepreneurs and create an enabling environment for their success.
The delta change will only happen successfully if we provide equal opportunities to women entrepreneurs to collaborate and co-exist. Mobilizing this segment requires changes at a policy level and the development of an enabling ecosystem. This ecosystem should enable women entrepreneurs to plan, innovate, create and sustain business growth.
It is well known that for entrepreneurs, the ecosystem is the primary factor of growth. An ecosystem for women entrepreneurs should perspicuously be representative of a set of service providers that aid access to finance, capacity building, networking opportunities, certification, training opportunities, policy, advocacy, media presence, mentors and acceptance of supply chain diversity.
The creation of robust networks that support and nurture women-led businesses could be done through innovative ways such as:
(i) A private equity fund for women – specifically designed for women-led enterprises with a
mentorship component to assist from incubation, execution, delivery and exit
(ii) An organization for advocacy and mobilization of country-level action for developing women-owned enterprises
A global organization can be created with regional and country chapters. The primary objectives of such an organization would be to review existing ecosystems and current state of women in business; identify the gaps in data; establish relevant advocacy and policy development for promotion of women-led businesses; create linkages with credit institutions and help build capacity in women-owned enterprises
The impact of such an ecosystem has been proven time and again. Yet, it is just not enough without access to capital and markets. It must be driven by motivated and persistent participants, with considerable buy-in from women entrepreneurs themselves. We can no longer simply focus on small steps or incremental growth, but set benchmarks to achieve transformational results. This needs investments that establish future leaders—from such a vital part of the population—who are able to innovate, take calculated risks and envision opportunities.
[Parul Soni is Executive Director and Practice Leader of Development Advisory Services, EY. He is also a member of the global advisory board of WeConnect International]