Madame Ngetsi of the Democratic Republic of the Congo is one of thousands of women in the world who—despite their talent, drive, and potential to contribute to the economic development of their countries—may never be able to fulfill their dreams of starting their own businesses. Their dreams may be dashed because of outdated legislation that reproduces debilitating gender roles.
If she were a man in the DRC, Madame Ngetsi’s initial steps in starting her business would be to obtain a certificate confirming the headquarters location, notarize the articles of association, and register with the Commercial Registry. As a woman, however, a significant roadblock stands in her way: She is legally mandated to first obtain her husband’s permission to register a business. This legal requirement, found in the family code rather than in any commercial or business code, is fully in effect in the DRC. Permission letters are readily found on file at women-owned company registries. Married men face no such requirement.
International Women’s Day is when we celebrate the strides made towards equality, but it also reminds us that gender is a powerful determinant of economic opportunities, particularly in developing countries. Financial inclusion is one of the areas where we observe a gender gap—women in developing economies are still relatively more excluded from the financial sector than men, even after controlling for income and education
For the first time, we can quantify this gap using hard data and evaluate how women around the world save, borrow, make payments and manage risk, both inside and outside the formal financial sector. With the release of the Global Financial Inclusion (Global Findex) data, we now have a comprehensive, individual-level, and publicly-available database that allows for comparisons based on more than 150,000 nationally representative adults in 148 economies in 2011. The dataset includes over 40 indicators, but here we’ll focus on three main categories: account ownership, savings behavior and credit.
While it’s International Women’s Day tomorrow, many of us at infoDev are trying every day to make women, specifically women innovators, central to our strategy of supporting high-growth entrepreneurs in developing countries. But this is easier said than done as women are notoriously under-represented in tech-related industries and even more so in the area that I work in – clean technology – which is largely manufacturing and therefore male, dominated.
I recently attended one of the largest renewable energy forums in the Caribbean attracting investors, experts and entrepreneurs from around the region. As I looked around the room, I spotted only a handful of women. And this is not an isolated case. I see this scenario play out whenever I meet climate and clean energy entrepreneurs at events like this around the world.
12-12-12 marks an auspicious day on which couples are rushing to get married. Globally, many women and men have been waiting for this day to mark as the day they got married. Those who miss it will need to wait 100 years to have another chance like this one again. But depending on where in the world they are, getting married will mean different things for these women, their career and future business opportunities.
In many economies around the world women are legally prevented from conducting basic transactions which are necessary precursors to entrepreneurship and employment. Women, particularly married women, can be barred from actions such as opening bank accounts, determining where to work or live, and having the ability to move freely. In some economies married women need their husbands’ permission to carry out such actions.
Just a few weeks ago, I launched a new World Bank report on gender in Pakistan – Is the microfinance sector in Pakistan serving women entrepreneurs? The report highlighted some troubling patterns which emerged from a review of the microfinance sector there, mainly that most women borrowers are actually acting as loan conduits for the men in their family, that much of the sector is engaging in de facto discriminatory practices, and that women who are actually running businesses in Pakistan have little interest in using microfinance products, because the products offered are unsuitable for their business needs. These are pretty counterintuitive findings, and have us questioning whether these observations are specific to Pakistan, or if these practices are more widespread.
As a follow up to that work, our team was given a great opportunity to organize a session at the recent FPD Forum on Supporting Women Entrepreneurs Around the Globe: Challenges and Opportunities. We saw this session as a way to raise the profile around this important agenda (beyond Pakistan), and ask some very important questions about how the Bank is supporting women in the private sector, what the key challenges to reaching this market segment might be, take stock of what we’ve learned about the impact of our work to date, and hear about the innovative work others are doing in this space.
The social and economic challenges of the Middle East and Northern African (MENA) region are all very well-known: the region has the world’s highest general unemployment rate (10 per cent – versus a global average 6 per cent) and the lowest female labor participation (26 per cent in the MENA region versus 52 per cent on average in the rest of the world). But recently, there are signs that this is changing.
Take for example last month’s ‘pitching contest’ by young entrepreneurs at the ArabNet conference in Lebanon, where 40% of the pitches came from women – a much higher percentage than is typical at similar conferences in Europe. And there are testimonies by female entrepreneurs like May Habib, founder of the Dubai-based Arabic translation service Qordoba.com which uses a lot of freelance female workers in the region. She mentioned in a recent interview that the internet has transformed women's opportunities. "More flexible work options, freelance, home-based work, low capital requirements; you can see why starting a company on a small scale is a much more viable thing for women to do than get a corporate job”.
The idea for looking into the issue of microfinance outreach to women in Pakistan had been of interest to the World Bank for some time. Outreach of the microfinance sector to women borrowers had always been extremely low – hovering between 50 to 60 percent of borrowers. Compared to the rest of the region, where we see outreach to women in the 90 percent range in India, Bangladesh, and Nepal, it raised the question as to why similar targets could not be achieved in Pakistan. We reviewed a number of possible explanations, but none of them seemed satisfactory. On top of that, Pakistan is probably one of the most progressive microfinance sectors in the World. The central bank has developed the most enabling regulations possible, Pakistan continues to top the Economist Intelligence Unit list of the most enabling regulatory environment, innovations in branchless banking and new modes of financial service delivery are being incubated here, and the microfinance network in Pakistan continues to be regarded as world class. So, given all the positive attributes around the sector, why was it not possible to more effectively reach this important constituency?
As World Bank Managing Director Caroline Anstey said in her remarks at last Thursday’s event on women in the private sector, women make up nearly 50 percent of the world’s population. Despite this, they are only 40.8 percent of the formal global labor market. This gap represents a vast economic potential that could have the power to create jobs, drive economic growth and transform the global economy as we currently know it—shaky, stagnant and according to some of the data, in recession.
Please watch Women Entrepreneurship to Reshape the Economy through Innovation in MENA, at the European Development Days live on Tuesday October 16 at 11:00 AM cet
Across the developing world, women business owners are far more prevalent at the informal and micro-scale than growth oriented small and medium sized enterprises. Women still face an uneven playing field in education, employment, earnings, and decision-making power.
The Middle East and Northern African (MENA) region faces its own particular set of challenges. In the aftermath of the Arab Spring, the development of strong economies and opportunities for both men and women to pursue a livelihood without barriers is integral to the future of the region. There is an enormous enterprise and job creation agenda to be fulfilled in the Middle East. A recent study by the OECD notes that today, only 27% of women in the region join the labor force, compared to 51% in other low, middle and high-income economies, and only 11% are self-employed, against 22% of men.