South-South: Empowering and Growing Women-led Business Session N°5

Women-led MSMEs make up about 35% of MSMEs in developing and emerging markets (8–10 million businesses) and play a key role in economic growth and job creation. Globally, 252 million women are entrepreneurs, and 153 million run established businesses. However, their enterprises grow more slowly than male-led MSMEs due to challenges such as limited access to finance, regulatory and institutional barriers, lack of capacity-building support, household responsibilities, and concentration in low-growth sectors.

The leading financial and management-related barriers to women for starting microenterprises are lack of capital, entrepreneurial, and management skills, respectively. Further, finances continue to be their biggest challenge despite the importance of developing women’s businesses.

Compared to men, women are less likely to engage with financial institutions or maintain a bank account. Although financial inclusion expanded rapidly between 2014 and 2017, with men’s account ownership in developing countries rising from 60% to 67% and women’s from 51% to 59%, the gender gap has persistently on this dimension remained at 9 percentage points in emerging markets since 2011.

Women-led MSMEs face financing gaps due to cultural and social norms, lack of collateral, and limited skills or capacity. Their businesses are typically smaller, more informal, and concentrated in low-value, gender-stereotyped sectors (like cooking, sewing, or salons). Female ownership declines as firm size increases, and most women entrepreneurs operate in consumer-oriented sectors with low barriers to entry and limited capital needs. In Africa, Asia, and Latin America and the Caribbean, around 75 percent of female entrepreneurs are in consumer-oriented sectors (against 45 percent of male entrepreneurs). These patterns are reinforced by women’s disproportionate household responsibilities and the tendency to run businesses part-time.

In the agricultural sector, women are predominantly engaged in primary production and informal activities, often in less visible parts of the value chain, with limited participation in marketing or sales despite contributing significantly to production. They are more involved in food crops—commonly referred to as “women’s crops”—while cash crops are typically associated with men. Women play multiple roles across the agri-food sector as smallholder farmers, owners, managers, or employees of agribusinesses of different sizes, contributing along the entire value chain from input provision and production to processing, packaging, marketing, and sales. However, this structural situation limits their access to formal financing mechanisms and has led many women to establish informal financing schemes to support one another. Having their own account gives women more influence over household finances, enabling greater independence and strengthening their economic empowerment. Financial accounts make it easier, safer, and more affordable to receive wages from employers, send remittances to family members, and pay for goods and services. Mobile money accounts allow even low-income households to save and better cope with financial shocks.

Advancing gender equality by improving women entrepreneurs’ access to finance is essential for boosting productivity, driving economic growth and reducing poverty. Closing the gender gap in credit access could raise developing country growth rates by 1.1% , but it requires greater awareness of the subtle obstacles that prevent women from obtaining available funds, as well as efforts to integrate them into financial networks. By overcoming these challenges, more women will be informed about financing options, gain access to supportive networks, and approach investors or financial institutions with greater confidence while feeling assured in the value of their businesses.