While there is much concern over the lack of female entrepreneurs in first world countries, the gender gap in developing countries is even greater. Poverty, lack of proper identifying information, and little to no access to banking services, leaves more than 1.3 billion women out of the formal financial system. These women then lack the basic financial tools necessary for asset ownership and economic empowerment. But is this the only obstacle?
Oftentimes women are the sole breadwinners or are responsible for the day-to-day chores necessary to keep their family fed and clothed. This becomes a major challenge to starting a business. Not only is access to capital necessary to fund the early investment of their venture but it’s also needed to hire out their current role so they can put the time and effort into building a thriving business. To walk away from their current responsibilities and obligations is not an option without a safety net.
So how do we assist the growth of female entrepreneurship? No differently than we do entrepreneurship as a whole. While we may want to focus on gender related issues that prohibit women in business, without solving the overarching financial inclusion problem we are basically putting the cart before the horse. We need to address the main issues plaguing the unbanked then move on to the more specific gender challenges.
How is this done? It's a domino effect. By providing solutions to the identity verification gap, banks and financial institutions can mitigate fraud and comply with governmental regulatory requirements necessary for opening accounts. Individuals can then open bank accounts and begin safely and effectively saving money towards their goals. Then when the time comes, they can demonstrate financial stability and apply for access to additional capital. Once these basic issues are addressed we can then focus on the fringe challenges that are more gender related such as legal and cultural discrimination.