> Posted by Christy Stickney, Independent Consultant and CFI Fellow

Say the words ‘women’ and ‘entrepreneurship’ together and donors and philanthropists will rush to give you money. It’s one of the hot topics in development today.

But where are the women in small and medium enterprises (SMEs)? In my study with the Center for Financial Inclusion, Emerging SMEs: Secrets to Growth from Micro to Small Enterprise, I asked this question, both directly and indirectly, as I met with entrepreneurs who had started microenterprises that grew to be SMEs, with the help of finance from microfinance banks in Peru, Ecuador and the Dominican Republic. I called these growth-oriented businesses emerging SMEs. These are my observations about women’s involvement with emerging SMEs.

Only a very small proportion of emerging SMEs are led by women. In my research only one of fourteen of the high growth enterprises identified in the study was led by a woman. Although the access-to-credit hurdle had been largely addressed within the study group, as evidenced by their extensive business borrowing, women were highly underrepresented as leaders of emerging SMEs.

Women tended to allow family responsibilities to shape their business roles and engagement levels. In particular, women entrepreneurs prioritized child-care responsibilities, as well as attending to ailing family members and aging parents.

Women were much more likely than men to diversify their economic ventures. Women tended not only to engage in multiple businesses, but also to invest in home improvements, rental properties, and the businesses and home-building endeavors of other family members. On the other hand, the emerging SMEs were characterized by single-focused dedication. Women’s business strategies appeared to aim toward creating value in family well-being and household equity and to reduce a family’s financial risk, benefitting both the family and the lending institution.

Women were very present as co-owners of emerging SMEs, occupying valuable support roles alongside male family members. In fact, the majority of high growth enterprises I encountered were jointly owned between an entrepreneur and his wife, or sister. In many cases the woman managed the business’s finances or handled customer relations while the man managed production. These roles align well with a woman’s need to be near the home, or attending to family responsibilities during certain hours of the day.

A few of the higher growth businesses had been started by women, and later transitioned to male leadership. In these cases, once the business reached a certain size, the owner’s husband or son joined her, and then carried the business forward into greater growth. One such example was that of Magda, who ran a small cafe just outside a university in Quito, Ecuador. When she was finally granted a coveted commercial site on the campus, her husband also joined her, providing much of the vision for the restaurant’s growth and future projections. “Siempre se necesita dos cabezas” (One always needs two minds.), he commented, referring to the virtues of their joint involvement in the business. Similarly, Francisco helped his wife set up a poultry-selling stand on a busy corner of their street in Guayaquil. However, once they moved off the street and into their own shop, which coincided with the arrival of their first child, he left his employment at a poultry farm to assume the leadership of their growing poultry-processing business.

Possibly, women entrepreneurs would feel greater freedom to engage more fully in growing their businesses if family care needs were being met by others. Such was the case of Esperanza, a small business owner who started a private school in her low-income neighborhood of Santo Domingo, in the Dominican Republic.  Esperanza was managing a staff of 12 teachers, and planning for an ambitious expansion of her school facilities. To support her, her mother ran the school cafeteria and cared for Esperanza’s two young kids.

So, what should we make of this? As women accommodate their business aspirations and involvement to their personal realities, do we also need to adjust? Should we recognize the value of the less dynamic businesses of women: to provide essential income to the family, allow women to make non-business contributions to family well-being and protect families against risk through diversification? Or do we push forward in ensuring that women entrepreneurs have the necessary institutional support to resolve their family care concerns, should they choose to pursue business growth?

Probably both!

We’d love to hear your thoughts. What do you think is the path forward?

Image credit: Accion

Have you read?

Rental Properties: A Popular Pension Plan for Aging Entrepreneurs?

Emerging SMEs: Secrets to Growing from Micro to Small Enterprise

From Micro to Small Business: What’s the Secret Sauce?