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Understanding Micro- and Small-Growth Entrepreneurs in Vietnam, Pakistan and Peru

A synthesis of market assessments and research to understand the needs of micro- and small enterprises, particularly women-owned, across three countries.

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Executive Summary

Despite recent progress in addressing challenges faced by women entrepreneurs, the COVID-19 pandemic has put the fragility of many of these gains into the spotlight by disproportionately impacting women workers and women-owned enterprises (WOEs). According to a study1 of women-owned micro-and small and medium enterprises (MSMEs) across 32 countries, 84% of the businesses were significantly impacted by COVID-19. Almost four in 10 women entrepreneurs (38%) reported that their business “will or may have to close as a result.”

These enterprises now face new challenges that will need to be addressed if economies are to regain their losses in an equitable way. The ability and will of governments, financial institutions and various support organizations to address those issues will determine how close we come to unleashing the true economic potential of women entrepreneurs.

The Ignite program, supported by the Mastercard Center for Inclusive Growth, is an opportunity to help make strivers, or growth-oriented businesses, more resilient in Pakistan, Peru and Vietnam. Understanding the emerging unmet needs through market assessments and insight research was the first step in this process, and this report provides an overview of “the current state of strivers” across these countries. The insights presented here have been triangulated with other qualitative exercises to develop programming that responds to these needs. Information on Ignite activities in each of the three countries can be found in the Ignite Mid-grant Progress Report.

Key findings from all market assessments and research

  • Social norms and other gender-based barriers, such as disproportionate burdens of caregiving, continue to hold female entrepreneurs back by reducing the time available for their businesses (up to 1.8 hours per week compared with men), limiting mobility, restricting meaningful access to skills and education, and adversely impacting their confidence levels.
  • The economic impact of COVID-19 has been nearly universal, with almost all the strivers (86% in PK, 81% in PE, 92% in VN) * reporting a decline in revenues. In the aftermath of the pandemic, the top three drivers of resilience and growth among female strivers are 1) access to finance; 2) network linkages; and 3) technology adoption.
  • The adoption of formal financial services remains low among women strivers. Two factors contribute to low uptake of formal credit products (3% PK, 46% PE, 20% VN): a trust deficit in financial institutions and unfavorable product terms. Female strivers also have a low incidence of overall savings (14% PK, 43% PE, 66%VN) and rely on informal savings (77% PK, 48% PE, 38% VN) for mostly personal use.
  • High awareness levels of digital financial services (98% PK, 90% VN) present an opportunity to catalyze adoption, especially as a resilience strategy post-pandemic. Levels of trial vary from low to high depending on the country context (currently 68% PK, 25% PE, 82% VN) and there are early signs that pandemic-induced market disruptions will contribute to continued growth in usage.
  • There is a gap in the adoption of “good” business practices, with most businesses relying only on basic input/output record-keeping (60% PK, 84% VN). Prevalence of advanced or more complex business practices, an indicator of growth aspiration, remains low, including business planning (38% PK, 41% VN) and market research (35% PK, 38% PE, 27% VN).
  • There is a clear demand among strivers for business skills capacity building (47% PK, 45% VN), but little willingness to pay (US$60-$260)3 for enrollment in a skills development program. Marketing, sales, business planning and finance are among some of the top training topics in demand.

*Note: The following abbreviations will be used throughout to indicate data specific to a country: PK = Pakistan, PE = Peru, VN = Vietnam

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