Just what does it take to make a successful female entrepeneur in the developing world? At least part of the answer is that a woman needs a relatively effective way to save money. A new paper on Savings Constraints and Microenterprise Development reports on the results of an experiment in Kenya that provided zero-interest savings accounts to village microentreprenuers:
...formal savings accounts had substantial positive impacts on business investment for women, but no effect for men...roughly a 40% increase in average investment, four to six months after the opening of the account.
Apparently, women who keep their savings at home - either in the form of cold, hard cash or assets like livestock - have a more difficult time than men at turning that money into a productive investment. Although the problem could be that women may be "present-biased" - economists' jargon for have-to-have-the-new-handbag-now behavior - I am more inclined toward another explanation:
...many women in developing countries face constant demands on their income (from relatives or neighbors), and it may be difficult to refuse requests for money if the cash is readily available in the house.
Whichever explanation you prefer, the results are compelling: access to savings vehicles is probably just as important as credit in facilitating the development of female-owned microenterprises.