How can we better serve women entrepreneurs?

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. 

We brought together the perspectives of another donor in this space (USAID), a woman entrepreneur from Pakistan who has designed an innovative approach to changing perceptions on women in business there, a director from an NGO that serves women from the bottom of the pyramid, and myself to bring in the perspective of a World Bank project leader. 

I can’t speak for the other presenters or participants, but I thought it was a fascinating session.  For one thing, the room was standing room only, and remained that way for the duration of the session.  What a great endorsement of the priority this issue is beginning to assume at the bank!  But more importantly, the substance of the discussions was incredibly thought-provoking.  I walked away with a number of key takeaways, which are worth pondering in the coming months as we begin to develop a pilot business line around supporting women entrepreneurs. 

Firstly, most of the evidence on measuring the impact or outcomes of our efforts to support women in the private sector suggests a pretty consistent and troubling pattern:  our programs and investments are not paying off for the women we are trying to serve, and in some cases may be having negative and costly consequences¹ .  Therefore, we need to take a good, hard look at the programs we are designing, and think about a thoughtful re-engineering process.  We also need to hold ourselves to a high standard when it comes to the results agenda – up until now, most of us have assumed that our work had important payoffs for women.  We no longer have the luxury of assumptions on this, and need to be more consistent and rigorous in measuring the impacts of our investments. 

Secondly, I believe we may really need to re-think our focus on replicability and scale.  The more we try to standardize and scale up our approaches, the more we may be missing the target in terms of impact.  I’ve personally always been a huge believer in the power of scale and sustainability.  But, given what we’ve seen happen at the field level, not only in our work, but in the work supported by others, I’m no longer convinced scale and replicability are the way to really change the trajectory for women entrepreneurs.  I’m getting more and more convinced that quality and customization may be critical factors for us to have an impact on women-run businesses – especially for businesswomen who are working in challenging environments, and where women are particularly disempowered.

Lastly, I’ve been struck lately by the evidence to suggest that a single instrument, in the form of access to finance or business training, can be effective on its own.  What struggling business women may need is a more customized package of support, that focuses less on a single bullet solution, and more on creating an ecosystem that allows businesses with growth potential to push the productivity frontier.  For example, access to networks and mentoring are in high demand by women, and may be an important key to unlocking growth potential. 

I mistakenly used to think that by working on microfinance I was de facto working to support women entrepreneurs.  I am now questioning that assumption.  And I hope you do too. 
 

^{1 Further reading:}

Female Microenterprises and the Fly-paper Effect: Evidence from a Randomized Experiment in Ghana

Business training and female enterprise start-up, growth, and dynamics: Experimental evidence from Sri Lanka

Does a picture paint a thousand words ? Evidence from a microcredit marketing experiment

Teaching Entrepreneurship: Impact of Business Training on Microfinance Clients and Institutions