# What it’s Like for Women Entrepreneurs in Developing Countries
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-03-17
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Entrepreneurship in Developing Countries: The Challenges
Meta Description: Discover the obstacles women face in entrepreneurship in developing countries, from cultural barriers to legal discrimination. Learn more here.
URL: https://financedigest.com/what-its-like-for-women-entrepreneurs-in-developing-countrieshtml

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_By_ **_Donna Rosa,_** _Founder and Chief Entrepreneurship Officer, EFour Enterprises LLC_

If you think entrepreneurship is hard, try doing it in a developing country.  If you’re female, double or triple the difficulty.  Women face so many obstacles that the dearth of successful [business ownership is one reason why developing](https://www.financedigest.com/brand-metrics-continues-on-steep-growth-trajectory-with-appointment-of-vp-business-development-in-the-us.html "Brand Metrics continues on steep growth trajectory with appointment of VP Business Development in the US") countries aren’t, well, developing.

**The Entrepreneurial Landscape**

It helps to first understand what entrepreneurship looks like in the developing world. It is estimated that 65-70% of businesses are microenterprises, 20% are small enterprises, and 5-10% are medium-size. They can be formal or informal, the latter referring to non-registered businesses. According to the ILO, 93% of the [world’s informal employment is in emerging and developing countries](https://www.financedigest.com/richest-countries-in-the-world.html "Richest countries in the world"), and women make up about 58%.

What’s more important to recognize is the diversity of the entrepreneurs themselves, male and female.  They are not a homogenous group and fall along a continuum, from smallholder farmers and craft sellers to technopreneur MBAs competing in the global arena, and everything in between.  This discussion focuses on women in the low-to-middle segment of that range.

**Entrepreneurs of Necessity**

For both [men and women](https://www.financedigest.com/bloom-uk-launches-fourth-annual-co-mentoring-scheme-the-exchange-for-senior-and-c-suite-men-and-women.html "Bloom UK launches fourth annual co-mentoring scheme, The Exchange, for senior and C-suite men and women") in low-income countries working as an employee is the exception, not the norm. Only 7% of females and 18% of males over age 15 are [wage workers](https://www.financedigest.com/apples-australian-workers-go-on-christmas-strike-demanding-better-wages-work-terms.html "Apple’s Australian workers go on Christmas strike demanding better wages, work terms") in both formal and informal businesses.  There are so few jobs available that people must find a way to sell something in order to survive, giving birth to a myriad of microenterprises.  This is especially true for women, who are often excluded from employment opportunities even if qualified.  For this reason, female-owned businesses are actually the majority in many low-income areas.

According to the [World Bank](https://www.financedigest.com/post-crash-banking-regulation-is-transforming-the-world-of-corporate-lending-for-the-better.html "Post-crash banking regulation is transforming the world of corporate lending – for the better"), women entrepreneurs are more likely to operate in the informal sector or in traditional female sectors. In Africa 63% of females in the non-agricultural labor force are self-employed in the informal sector. Women’s [businesses tend to be small](https://www.financedigest.com/how-banks-will-evolve-to-support-small-business-owners.html "How banks will evolve to support small business owners") and home-based, which allows them to maintain home and childcare responsibilities, sometimes with help from extended family members. In other cases women are [expected to stay home](https://www.financedigest.com/smart-home-devices-market-is-expected-to-grow-at-a-healthy-cagr-of-over-18-during-the-study-forecast-period-2021-2031.html "Smart Home Devices Market is expected to grow at a healthy CAGR of over 18% during the study forecast period 2021-2031"). Additionally, venturing out alone can be dangerous, so home-based is the only option.

**The Burdens Women Bear**

In business, women in developing [countries must deal](https://www.financedigest.com/eu-countries-eye-deal-on-more-energy-measures-within-weeks.html "EU countries eye deal on more energy measures within weeks") with obstacles that men do not.  Some are cultural and others are legislated discrimination, but either way, women are routinely and systematically excluded from economic opportunities.

Culturally, the hurdles begin in girlhood, when females have less access to education than boys. Later on, women can be restricted in family decision-making, creating subordination and dependency.  If a woman does [manage to open a small enterprise](https://www.financedigest.com/managing-mobility-in-the-enterprise-must-have-consideration.html "Managing mobility in the enterprise must have consideration"), she must juggle responsibility for child-rearing and running the home on top of managing the business, with little support.  [Small wonder that low self-confidence and lack of negotiation skills become a lifelong struggle](https://www.financedigest.com/pakistan-floods-add-to-pain-for-struggling-small-businesses.html "Pakistan floods add to pain for struggling small businesses"), and are especially limiting in a business environment.

Legally, women are discriminated against in family law (marriage, divorce, and inheritance) as well as land rights and [labor markets](https://www.financedigest.com/u-s-labor-market-powers-ahead-as-weekly-jobless-claims-fall-layoffs-hit-24-year-low.html "U.S. labor market powers ahead as weekly jobless claims fall, layoffs hit 24-year low"). These laws [impact women’s ability to operate in a business](https://www.financedigest.com/exclusive-qatarenergy-boss-says-world-cup-tension-will-not-impact-german-business.html "Exclusive-QatarEnergy boss says World Cup tension will not impact German business") environment even more than business regulations.  They determine whether women can make independent economic decisions, enter into contracts, or own, manage, or inherit assets and property.

**Financial Fences**

Female-unfriendly legal structures make it difficult for women to obtain [bank accounts and access](https://www.financedigest.com/hair-care-shouldnt-break-the-bank-transplant-surgery-should-be-accessible-and-affordable-for-all-men.html "Hair-Care Shouldn’t Break The Bank – Transplant Surgery Should Be Accessible and Affordable For All Men") much-needed credit. In Sub-Saharan Africa and the [Middle East](https://www.financedigest.com/stanchart-sees-asia-middle-east-as-bright-spots-in-weak-global-economy.html "StanChart sees Asia, Middle East as bright spots in weak global economy") & North Africa, fewer than 40% of women have a financial account.  Female entrepreneurs must use their own [savings or borrow money](https://www.financedigest.com/how-to-save-money-for-a-car.html "How to save money for a car") from family and friends to start businesses.  While they sometimes obtain micro-loans that can get them started or keep them afloat, the modest amounts do not enable significant expansion.

An astounding 70-80% of formal women-owned small and medium enterprises (SMEs) in developing [countries are unable to obtain the capital they need](https://www.financedigest.com/5-countries-you-need-to-have-an-offshore-account-in.html "5 Countries You Need To Have An Offshore Account In"), strangling business growth.  It is no surprise that [women’s businesses](https://www.financedigest.com/overcoming-challenges-faced-by-women-in-business.html "Overcoming challenges faced by women in business") are smaller, less profitable, and slower-growing than their male counterparts.  Understandably, they tend to be more concerned with [business survival rather than growth](https://www.financedigest.com/uk-businesses-call-for-looser-immigration-rules-to-boost-growth.html "UK businesses call for looser immigration rules to boost growth").

Other factors play a role, too.  Women frequently lack the business networks, contacts, and access to markets to build [successful businesses](https://www.financedigest.com/why-mobile-apps-are-crucial-for-a-successful-business.html "Why Mobile Apps are Crucial for a Successful Business"). They start businesses lacking business skills, education, or experience.

**Fit for Females**

Financial systems have generally been designed by and for men.  For example, loans usually require collateral.  Because [men can own land and other assets and women](https://www.financedigest.com/the-us-womens-lingerie-and-mens-underwear-market-to-be-driven-by-the-non-stoical-approach.html "The Us Womens Lingerie And Mens Underwear Market To Be Driven By The Non-Stoical Approach") often can’t, they are immediately shut out of opportunities to borrow. New lending and [investment mechanisms tailored for women are needed](https://www.financedigest.com/5-reasons-why-women-need-to-get-into-property-investing.html "5 Reasons why women need to get into property investing").

The irony is that women in [developing countries](https://www.financedigest.com/britain-launches-trade-system-for-developing-countries.html "Britain launches trade system for developing countries") are actually better credit risks than men.  They tend to be more careful and financially responsible than men, including [loan](https://www.financedigest.com/bounce-back-loans-what-to-do-if-you-cant-repay-2.html "Bounce Back Loans: what to do if you can’t repay?") repayments.  Research from Bank of New York Mellon some years ago claimed that better access to finance for women could [unlock $330 billion](https://www.financedigest.com/cryptoverse-ethereum-upgrade-to-unlock-33-billion.html "Cryptoverse: Ethereum upgrade to unlock billion") in annual global revenue.

Credit criteria better suited to women can also be developed.  Repayment histories from village savings and loans (VSLAs) and [mobile phone payments](https://www.financedigest.com/what-is-the-optimum-mobile-payment-mix.html "What is the optimum mobile payment mix?") can establish creditworthiness, as can business cash flow or accounts receivable lending.

**The Best ROI**

[Investing in developing-country women makes sense both economically](https://www.financedigest.com/the-politics-economics-and-investment-implications-of-brexit.html "The politics, economics and investment implications of Brexit") and socially.

The [international donor community has figured out that when they enable women](https://www.financedigest.com/bloom-uk-celebrates-500-new-members-as-it-looks-ahead-to-international-womens-day-and-launches-its-2022-mentoring-scheme.html "Bloom UK celebrates 500 new members as it looks ahead to International Women’s Day and launches its 2022 mentoring scheme") they realize solid returns.  When women acquire business [skills and develop](https://www.financedigest.com/what-skills-and-areas-of-knowledge-should-finance-teams-develop-during-2023.html "What Skills and Areas of Knowledge Should Finance Teams Develop During 2023? ") incomes, they use more of that money for their families and communities than men do.  It pays [back nicely in terms](https://www.financedigest.com/ubisoft-vows-to-get-back-to-operating-margin-above-20-in-medium-term.html "Ubisoft vows to get back to operating margin above 20% in medium term") of better education and health for

their children, as well as reduced poverty. Agricultural [productivity improves](https://www.financedigest.com/demand-for-meatless-products-and-vegetable-proteins-is-expected-to-improve-nutritional-yeast-market-sale.html "Demand For Meatless Products And Vegetable Proteins Is Expected To Improve Nutritional Yeast Market Sale"), and women are far less likely than men to default on loans. An [investment in women](https://www.financedigest.com/the-investment-gap-for-women-entrepreneurs.html "The Investment Gap for Women Entrepreneurs") has a huge multiplier effect, yet they remain marginalized in many ways, including business.

There is no good [reason not to empower women in developing](https://www.financedigest.com/reasons-to-hire-a-web-developer-for-your-business-website.html "Reasons to Hire a Web Developer for Your Business Website") countries. After all, full [employment of half](https://www.financedigest.com/more-than-half-of-workers-are-open-to-leaving-their-current-employers.html "MORE THAN HALF OF WORKERS ARE OPEN TO LEAVING THEIR CURRENT EMPLOYERS") the population would pretty much zero out poverty.

EFour Enterprises provides remote business coaching to [entrepreneurs in developing countries and emerging](https://www.financedigest.com/how-leadership-helps-emerging-entrepreneurs-according-to-dr-parwiz-daud.html "How Leadership Helps Emerging Entrepreneurs, According to Dr. Parwiz Daud") economies.

[www.efourenterprises.com](https://www.efourenterprises.com/)

[www.donnamrosa.com](https://www.donnamrosa.com/)

linkedin.com/in/donnarosa


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