Unlocking Women’s Economic Power isn’t Rocket Science

Unlocking Women’s Economic Power isn’t Rocket Science

By Rathi Mani-Kandt

What if I told you that the financial sector has been favoring the wrong gender – that often women entrepreneurs are a better credit-risk than men and their businesses have higher returns? 

Women put their profits back into their families and communities. They create more jobs and bring greater prosperity. In fact, investing in women’s economic power could boost the global economy by as much as $10 trillion  by 2030 – twice the GDP of Japan, the world’s third largest economy!

Results from the Ignite program, a partnership between CARE and the Mastercard Center for Inclusive Growth, supporting women-led small businesses, confirm global data that women make stronger entrepreneurs and better loan clients than men. But despite growing evidence of a massive missed opportunity, women entrepreneurs are prevented from fulfilling their potential due to numerous barriers, including: harmful social norms, limited access to capital, networks and training, and discriminatory laws in 176 countries

“Starting a business is especially difficult for women in a male-dominated society like Pakistan,” Fariha Irfan, an Ignite participant in Rawalpindi, Pakistan told me when I met her earlier this year. “At every step we need men to assist us, whether that’s our husbands or our brothers,” she said. 

Because she didn’t qualify for a bank loan, Fariha sought the capital for her handicrafts business from her husband but hit another wall when COVID-19 put an end to face-to-face sales. Ignite helped Fariha access the skills and resources she needed to develop an online presence and extend her sales globally. With lots of hard work and a little assistance, Fariha grew her business into a thriving enterprise that helps support her family of six as well as several local artisans.

A win-win situation 

Investing in women isn’t just the right thing to do, it is smart economics. Which is why CARE and the  Center for Inclusive Growth are renewing our partnership to launch Strive Women, a new four-year program that will continue to work in Pakistan, Peru and Vietnam; strengthening the financial health and resilience of more than 300,000 small businesses and unlocking greater access to adapted financial products, critical support services and markets.

The success of Ignite clearly shows the appetite and justification for women to gain more financial power. From 2020 to 2023, Ignite directly assisted over 150,000 growth-oriented small businesses in Pakistan, Peru and Vietnam, unlocking $154.9 million in loans and providing a return 29 times greater than  the initial investment by the Mastercard Impact Fund of $5.26 million. 

We achieved this by leveraging the expertise of both partners in developing gender equality programming and our broad networks locally and globally. We convened, connected, and catalyzed over 35 local partners (11 core service delivery partners) to develop effective solutions to hurdles faced by women entrepreneurs like Fariha in three very different markets and contexts. Our partners benefitted – repayment rates on loans to women-led businesses in the three countries were 95 to 100 percent, with zero defaulters on one loan product in Pakistan – and so did the women of Ignite. When the three-year program concluded earlier this year, eight out of ten entrepreneurs had increased their sales, nine out ten said the quality of their lives had improved, and a similar figure (89 percent) felt more confident about being able to run a business.  The full Ignite Learnings report can be accessed here and the close-out video here.

Our recipe for success

Ignite’s holistic, market-based approach enabled access to capital and critical support services, fostered empowerment, and dismantled barriers for women entrepreneurs with three simple, yet impactful strategies: 

  • Creating financial products and services through women-centered design processes that improved access and usage for women, while driving good business for financial service providers. 
  • Investing in strategic and diverse partnerships to enable greater reach, deliver a wider range of services, and promote long-term sustainability of services for women entrepreneurs. 
  • Employing strategic and targeted outreach campaigns to influence the small business ecosystem; drive awareness and uptake of adapted products; and address restrictive norms and behaviors that uniquely impact women.

Unlocking women’s economic power isn’t rocket science. All it requires is that we commit to and intentionally invest in prioritizing and designing products and services that women want and need with the recognition that in doing so we’re capitalizing on an enormous triple-bottom-line opportunity. For example, “Emprendiendo Mujer”, a loan product we co-designed with Financiera Confianza in Peru doesn’t require a woman’s credit history or consider her husband’s debt (unlike other products there), and even includes breast cancer screening. It’s been so successful, it’s being copied by competitors. Similarly, in Pakistan, where digital and financial literacy are low, we combined social media with mobile money wallets to enable women without bank accounts or credit cards to receive payments. And in Vietnam we developed networks that helped women entrepreneurs create critical connections with other actors in the value chain, such as customers and suppliers. 

Striving and innovating

The innovative partnership with the Center for Inclusive Growth and $9 million investment in Strive Women from the Mastercard Impact Fund will enable CARE to expand its role as a market convener for women-led small businesses in Pakistan, Peru, and Vietnam. We will deepen and grow our partnerships and build dynamic ecosystems with even more stakeholders to spark new ideas, design useful and affordable women-centered products, and provide insights into how to leverage and scale innovation to close the gender gap. 

Excitingly, Strive Women also gives us an opportunity to ideate and create market-based solutions for two of the most pressing issues for women in our time: childcare and climate change. Women bear disproportionate responsibility for childcare, spending more than 2.4 hours per day on average, on unpaid care work compared to men. Strive Women will explore solutions to childcare to reduce women’s stress and time poverty.

Likewise, with women and girls experiencing the greatest impact of climate change, Strive Women will increase financing and assistance for green businesses and practices as we experiment with adaptations to the crisis and activate sustainable support for these businesses. 

Hand-in-hand with women and like-minded partners, we are growing resilient, inclusive ecosystems and economies where women can unlock their full economic power, not only because it’s the right thing to do, but because failure to do so will mean we have lost a real multi-trillion-dollar opportunity.

If you are committed to the financial health and inclusion of women entrepreneurs, join us to build a more equitable ecosystem.

Find out more about CARE’s Strive Women Program supported by the Mastercard Center for Inclusive Growth.

About the Author

rathiRathi Mani-Kandt is a Director of Women’s Entrepreneurship and Financial Inclusion, CARE USA 

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.