On any given day, running a business as a woman is an uphill battle. From pay inequity to unpaid care and restricted access to funding and financial services, the barriers for women-owned micro, small and medium enterprises (MSME) have always been unacceptably high.
The COVID-19 pandemic has shown us the price of ignoring such disparities—and forced business, government and non-profits to examine how the systems in our society perpetuate inequality. During 2020, millions of women left the workforce, businesses shuttered and savings dried up. And now as the pandemic accelerates the move toward a digital economy, women risk being left farther behind if we do not intervene with support and greater access to digital tools.
In low and middle income countries, there are up to 35 million formal MSMEs and 124 million informal MSMEs with at least one female owner. To ensure these women entrepreneurs can survive and thrive in the digital economy they need access to three critical enablers: capital, digital tools and skills, and a supportive environment so they can access and use these tools to their fullest.
Give women access and skills
“E-commerce is the new knowledge which small businesses are lacking,” says Nguyen Thi Hien, age 26. Hien took over her family business in Hanoi, Vietnam, which produces and sells pork products, and was on a steep learning curve when COVID-19 hit. Much of her business is face to face and as her wholesale clients dried up, she realized she needed to turn to online retail sales to survive. But she faced two big barriers. She needed capital, she said, and she needed the skills in online commerce to expand to new markets.
She is not alone. In low- and middle-income countries, more than 300 million fewer women than men access the internet on a cellphone, the preferred method of conducting online business.
Hien joined the Ignite program to help her pivot to digital. A partnership between CARE and the Mastercard Center for Inclusive Growth, the Ignite program supports growth-oriented women entrepreneurs by opening up much-needed access to financial and digital resources while building their business capacity and networks. The program takes a holistic, multifaceted approach to connecting women to the resources and networks they need to remain resilient and grow.
For Hien, Ignite provided just what she needed. “I feel that the courses were designed in a short, concise, and time-saving manner, yet they covered the exact topics I needed,” she said.
Break down gender barriers
Underlying the access challenges are socio-economic obstacles that penalize women entrepreneurs: time poverty, harmful gender norms and unpaid care, to name a few. Approaches to expand financial access and support women in developing their digital skills, will have limited impact unless we proactively address these often invisible but substantial barriers.
For that to happen we must listen to and involve women throughout the process of developing innovative solutions around access, products and services. Ultimately, the real upending of the status quo will only happen when women are in leadership positions, taking their rightful place alongside male leaders.
Actions for leaders
To drive inclusive digitalization, we must look holistically at women’s lives to see what is holding them back. The list of barriers is long, but the obstacles are not inevitable. A female digital revolution is possible. Working in partnership with governments and local communities we can systematically tackle these barriers and the current fragile state of women’s engagement in the economy, especially the digital economy.
Building toward more sustainable and inclusive economies is everyone’s responsibility.
- Governments must work to create a favorable environment for women-led small and micro businesses, including lowering the cost to and risk in lending to women, ensuring connectivity and internet access is a public good and enacting policies that promote women’s socio-economic autonomy.
- The private sector must recognize the business case for gender equity, designing new products with a gender lens and ensuring women are included in the design process.
- Financial service providers must expand women’s access to capital by reassessing risk models that exclude them and creating new ones based on more holistic data. They can introduce digital channels for lending and hire more female staff in leadership roles.
- Civil society must recognize women’s economic aspirations and engage men and boys in supporting women’s leadership of micro and small businesses.
- Everyone must be willing to go beyond traditional models of partnerships.
By adopting a human-centric, market-based approach to supporting women entrepreneurs, as we do in our Ignite program, we can ensure sustainable change that makes both business and social sense for private sector partners and women entrepreneurs alike.
This pandemic presents us with an opportunity to reimagine how those in the financial and digital ecosystems can support and finance women entrepreneurs so that they can become valued customers and recognized leaders in the recovery. What will you do to build back equal?
Find out more about the Ignite Program at www.care.org/ignite
Payal Dalal is Senior Vice President, Social Impact, International Markets at the Mastercard Center for Inclusive Growth, and Hilary Mathews is Senior Director, Gender Justice at CARE.