> 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
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February 24, 2017 at 3:57 pm
Bobbi Gray
Christy, as you know, I so appreciate your research and the extra attention you’ve taken to sharing this research with others. I believe there are some important implications –in many different areas—that we all need to be considering. (This is lengthy, so apologies now.)
First of all, I simply want to validate that in the research you’ve conducted, we’ve found similar dynamics even at the microentrepreneur level –not just looking at SMEs, and in other places around the globe.
In a recent blog piece (here: http://www.grameenfoundation.org/blog/venus-and-mars-together-or-separate-financial-inclusion#.WLCECW8rLIU), I raise the issue that we often design financial services (or even integrated business training and financial services, etc.) with either a man or a woman in mind—never really considering or addressing that they are part of a household unit that has combined needs and some interesting intra-household dynamics that really determine how effectively people can engage and utilize financial services. I realize it’s challenging to design products that can address all access and use challenges, but I think we’ve fundamentally missed the opportunity to think about how people within a household really are using some services—what is the husband’s role/what is the wife’s role/what is the role of a son/daughter/mother-in-law…you name them. For example, in one of the studies with our partner in Guatemala, we learned that you couldn’t assume that the woman client was actually the “entrepreneur”—even though she joins the organization as an “entrepreneur.” She may be taking the loan for husband’s or son’s business and she’s just really the conduit to the credit. But we’re training her on business education that she may have no need or desire to use and we’re hoping we’ll achieve our mission to empower her and see progress in HER life. Should we equally be looking at change at the higher household-level –which in turn can make her life better? This means understanding much more about her household unit than just her alone.
In one of our projects in Mexico, we piloted a project where we provided business education to the family unit involved in the business—helping each family member see their role and understand the basics of running a business. Unfortunately, this is one of those projects where there wasn’t an evaluation budget, but we know anecdotally, that this had a huge impact on the each member –because they saw themselves as a real team, aiming for a common goal and they could see how they could better support each other in the business.
In Guatemala and Mexico, we uncovered this issue you raise about caretaking as well—and it was like the lightbulb went off for me. How could I expect a mom, who has a young infant, to have the bandwidth in her day to make a new business substantially grow while raising her child? Being a mom of 3 kids, I’m lucky I can send them off to daycare and school, otherwise, responding to this blog alone would require me staying up until they go to bed. This is not to say I believe all women are limited in the same way, but even in Burkina Faso, we listen to women who get up at dawn, work for 2-3 hours to prepare their family for the day, go to the field for a couple of hours, come home to make lunch or meet their children at home from school, and then maybe go back to work? And I assume in my theory of change that she’s going to change the legacy of her family in the 2-3 hours of productivity she’s allowed in the day? Many of the women mention picking an income-generating activity that allows them to balance caring for their children with earning some level of income. Most of the time, this also means she has to do this from her home which can have its own limitations.
Grameen Foundation has an interesting project in the Philippines working with coconut smallholder farmers, where through research we’ve discovered that within these smallholder households, the women are the ones that play a huge financial planning role –so they are the ones linked to financial training and the financial services —in service of the family business—coconut farming (highlighted here: https://www.youtube.com/watch?v=4Wy8mqb6-uc). Her husband is the coconut farmer. I think we have to get better at thinking about how our products/services/support play into household dynamics like these. I’ll be excited to see what we learn from our client outcomes research here.
While I think our focus on women is important—and is often backed by research that shows empowering women, helping them become productive results in positive impacts at the household and societal level—I don’t think we can assume that by only working with her, we’re going to change her trajectory. I think we have to get better at understanding the nuances of what happens within her household and meet her there in that reality –and think about how to engage her husband and support structure. Otherwise, I think we create too many expectations for change and impact for the magical female entrepreneur who alone is going to change the world, with a child on her back, a hoe in her hand, –all while skipping backward.
I think your research should continue to result in some interesting conversations and hopefully more examples of how anyone in the financial inclusion or women’s entrepreneurship space are thinking and responding to these issues.
-Bobbi Gray, Research Director, Grameen Foundation