LIMA, Peru—In 2010, Monica was facing bankruptcy. She and her husband had lost their jobs, sold the family car, and moved their children to a less expensive school. Then a television program about how to recycle and repurpose plastic showed her how waste could be turned into yarn and fabric. A trained designer, Monica decided to venture into production of “cloth” bags made from recycled plastic bottles and aimed at Peru’s growing market for environmentally friendly goods. With start-up loans from friends and family, she and her husband launched their new business.
Five years later, they’ve gone global with their stylish, innovative, custom-designed products—all derived from recycled plastics. They outsource manufacturing to about 16 small units in the Gammara district of Lima, which also houses their head office. Monica leads on product design and bookkeeping while her husband manages sales and marketing.
By the time Monica joined a women’s entrepreneurship program run by USAID in Lima in 2014, her business had transitioned from the “necessity” stage to the “growth” stage—meaning she was no longer selling goods just to survive but had achieved some success and was ready to expand.
Monica isn’t unique either in her challenges or her approach to overcoming them.Some 9.34 million small and medium-sized enterprises (SMEs) globally are run by women, who face multiple and specific challenges. These include exclusion from male-dominated markets, concentration in less-productive and lower-paying sectors, and gaps in business management knowledge.
Supporting businesses like Monica’s to grow not only creates badly needed jobs—it also drives growth and advances shared prosperity.
Paths to prosperity
The World Bank Group is a leader in advancing women entrepreneurs, through a range of investments and technical and analytical activities, in partnership with other institutions.
Its Women’s Leadership in Small and Medium Enterprises (WLSME) Trust Fund partners with USAID to develop innovative interventions and learn what works to support women entrepreneurs as they grow their businesses.
Grants from the WLSME Trust Fund support work in 11 countries, often leveraging external resources as part of larger projects. In June, USAID and World Bank teams met in Lima to exchange learning and early results from their work across the globe.
In Pakistan, the World Bank Group’s WomenX program combines business education with access to finance, networking, and mentoring for women entrepreneurs leading SMEs in traditional and non-traditional sectors. A city-wide survey of female entrepreneurs in Karachi—the first of its kind in the country—revealed a vibrant segment of women growth entrepreneurs, isolated from the broader business community and lacking confidence in their skills and knowledge.
WomenX is working with implementing partners on the ground, including a premier business school, to develop and deliver a localized business education curriculum aimed at bridging knowledge gaps in management skills.
Sessions on communication, negotiation, and leadership skills boost participant confidence and ability to navigate male-dominated markets. The program also facilitates networking with the business community, industry associations, and chambers of commerce to connect participants with new markets and opportunities.
Participants in the pilot report high rates of peer-to-peer networking and improved understanding of financial management as they plan for product diversification and entry into new markets.
In Togo, 83 percent of the working population are self-employed or small-scale employers, or they work in family businesses. The Togo Private Sector Development Support Project provides training and personalized mentoring to 1000 entrepreneurs, half of them women.
Research shows that entrepreneurial success is strongly related to particular behaviors in work. Personal initiative training aims to help people learn these behaviors—to become self-starting, future-oriented, proactive in seeking feedback, and persistent about reaching goals.
The Togo WLSME aims to find out how training in personal initiative and the ability to proactively overcome obstacles compares with traditional management skills training for both female and males entrepreneurs. The program includes trainees with diverse literacy and language skills: 56 percent had only primary education or less, many do not speak French, and some are non-literate.
Preliminary results suggest that five months after the training and mentoring program, entrepreneurs from both programs increased capital and labor inputs and used better business practices, including marketing, record-keeping, human resource management, operations and performance management, and information seeking practices.
From Kyrgyzstan to India, Nigeria, and Peru, those implementing the programs were struck by the extent to which women entrepreneurs face similar challenges despite the vastly different contexts in which they operate.
Entrepreneurs feel isolated but gain confidence from training programs. They benefit greatly from networks, especially peer networks developed during training. And women-led SMEs need new and better integration with financial institutions, business networks, and supply chains.
“As a one-woman army…I had struck a phase of complete isolation and my vision started to blur… [WomenX] has connected me to a world of empowered women and a target market, which has helped me move forward and do better both personally and professionally.”
A new World Bank Group gender equality strategy, to be launched in late 2015, will focus in part on creating more and better jobs for women and expanding women’s ownership, control over, and access to key productive assets such as land, technology, housing, savings, and other financial assets. SMEs have a vital role in this context, both as key drivers of job creation and as an avenue for expanding access to assets.
Business opportunities for women are meanwhile starting to open up, sometime in unexpected places. Young women are becoming leaders in tech startups in Gaza, and female tech entrepreneurs account for 35 percent of startups in the Middle East compared with 10 percent in the West. They’re building successful businesses, often using e-commerce to reach new markets.
More programs that address the unique and specific constraints on women entrepreneurs are needed for these nascent trends to take hold and sustain the kind of robust, shared growth that can lift communities out of poverty and keep them there: programs like WLSME, WomenX, and the Togo Private Sector Development Support Project.
“As a one-woman army…I had struck a phase of complete isolation and my vision started to blur,” Mariam Rehman, a footwear entrepreneur in Pakistan, said.
WomenX “has connected me to a world of empowered women and a target market, which has helped me move forward and do better both personally and professionally. Getting my story out there through the WomenX forum has shown me how valuable we each are as entrepreneurs and women.”
The training and mentoring program “transformed many aspects of my life. It opened many possibilities and woke up my hidden talents…I manage my income better now,” Adjovi Togbui, from Togo, said.
Another Togolese entrepreneur, Monique Sohounou, said her profits had “increased significantly because I am more active than before and I am able to identify changes in my environment and transform them into veritable business opportunities. I have also learned from my mistakes. Thanks to obstacles that I have overcome, my business is more prosperous than before.”