As Africa faces the potential for a demographic dividend, certain facts about Africa’s population offer cause for both excitement and concern.
Since the beginning of time, women have been at a disadvantage when looking for financial loans. One reason is that women have less control over land and assets that can be used as traditional collateral. This puts a real damper on her ability to launch an enterprise or, even when she manages to launch one successfully, to take it to the next level.
In Africa, women’s entrepreneurial knack is self-evident to anyone who sets foot on the continent—just look at any roadside! So, this problem is likely quite costly and holding back development. Can we solve it somehow?
As it happens, the Entrepreneurial Finance Lab, an entity that spun off from Harvard’s Center for International Development in 2010, has developed a tool using something called “psychometric testing”, which measures personal characteristics such as knowledge, skills, education, abilities, attitudes and personality traits as a means to predict how likely it is a person will pay back a loan. And it is proving quite effective. Could this be a way to finally help find a solution for women who don’t have any credit history or hold formal title to assets that are traditionally accepted as collateral?
The World Bank Group’s Global Practice for Finance and Markets (GFMDR) started thinking seriously about this, and worked to see it if it could be integrated in a Bank-funded project in Ethiopia (the Women Entrepreneurship Development Project, US$50m). Francesco Strobbe leads the project team, and started to discuss the issue with us in the World Bank’s Africa Region Gender Innovation Lab (GIL). “I thought this was a great opportunity to test some innovative measures to see if we could reach a real breakthrough with much potential for women entrepreneurs—in Ethiopia and elsewhere.”
When it comes to helping young women in Africa with both economic and social opportunity, what does the evidence tell us? Broadcaster Georges Collinet sat down with researchers and policymakers to discuss the hard evidence behind two programs that have succeeded in giving girls a better chance at getting started in their adult lives.
Women are less productive farmers than men in Sub-Saharan Africa. A new evidence-based policy report from the World Bank and the ONE Campaign, Leveling the Field: Improving Opportunities for Women Farmers in Africa, shows just how large these gender gaps are. In Ethiopia, for example, women produce 23% less per hectare than men. While this finding might not be a “big” counter-intuitive idea (or a particularly new one), it’s a costly reality that has big implications for women and their children, households, and national economies.
The policy prescription for Africa’s gender gap has seemed straightforward: help women access the same amounts of productive resources (including farm inputs) as men and they will achieve similar farm yields. Numerous flagship reports and academic papers have made this very argument.
A big idea can be rejected. It might be illegal. It might mean political suicide. In the words of Marcelo Giugale, the World Bank’s director of Economic Policy and Poverty Reduction Programs for Africa, challenging conventional wisdom isn’t always easy. But in the realm of big ideas, the risk is part of the reward.