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televisionThe Investment Climate Reform (ICR) Agency recently hosted a conference in Rwanda on empowering women entrepreneurs. The event was attended by more than 150 leaders involved in development policy and planning from nearly 40 countries in the Africa, Caribbean and Pacific (ACP) region. ICR Agency is a partner of the European Union, the British Council, the German Cooperation and the ACP Secretariat.
The most impactful finding is that the financing gap for women’s entrepreneurship development is $3.4 trillion ($1.7 trillion) by 2024. Despite the efforts of ACP countries, evidence shows that women still have difficulty accessing credit. The study further shows that businesses owned/managed by women have better credit options and the lowest non-performing loan rates than those owned/managed by male businesses.
The presence of Caribbean representatives at the conference undoubtedly shows the great progress made in its development agenda. Through progressive reforms, the Caribbean has been able to address many of the issues that currently plague several African markets. Some of the factors reportedly hindering women’s empowerment on the continent include:
• Access to technology, mainly in rural areas
• Large informal sector resulting in limited or no access to banking services
• Strong patriarchal culture hinders women from participating in business management
• Lack of collateral to provide credit securitization
• Limited or no rights to borrow money, start a business, or even own property that can be used as collateral for business development.
The Caribbean region is not constrained by these issues in 2024, thanks to legislative reforms and social progress. World Bank research shows that many countries in the region are middle-income countries with a high quality of life. Some African countries admit that they are actively pursuing reforms, recognizing their position on the development trajectory and the need for sustainable economic growth. Take the host country Rwanda, which achieved a commendable result in 2024, with 61% Women make up 50% of parliament and 50% of the executive and judiciary branches of government. On female entrepreneurship, the Rwanda Development Board reported that through the country’s reforms, women-owned businesses have increased from 27% of all businesses in 2017 to 34% in 2022.
Although the region has made great progress, there is still much work to be done. The study found that countries with gender-equal policy institutions and inclusive frameworks are better able to achieve sustainable economic development.
An article by Jeanette Awai confirms a positive correlation between female entrepreneurship and economic growth. Many points have been made, including:
• Women entrepreneurs have valuable skills: they are good at multi-tasking, communication and understanding customer needs. These skills contribute to running a successful business.
• Focus on sustainability and community: Caribbean women are known for their resourcefulness and environmentally friendly practices. Women-led businesses are more likely to be environmentally conscious.
• Innovation and filling market gaps: Women entrepreneurs are entering traditionally male-dominated fields and launching social enterprises that address social issues.
• Economic benefits: Research shows that closing the gender gap in corporate leadership could significantly increase global GDP. Investing in women-owned businesses is good for the economy.
• Diversity of perspective: Women entrepreneurs bring new ideas and approaches that foster innovation and growth.
However, women still face significant challenges in starting their own businesses, chief among which is a lack of capital. The data suggests that more positive action is needed, given the need for the Caribbean to achieve sustainable economic growth post-COVID-19 and the ongoing challenges posed by global supply chain disruptions.
According to a report from Republic Bank, Why female entrepreneurship can boost economic growth in the Caribbean, reveals some stark facts about the state of economic empowerment in Latin America and the Caribbean.
Women-owned businesses make up only 23% of micro, small and medium-sized enterprises in Latin America and the Caribbean.
Only one percent of women entrepreneurs have access to angel investors, seed funding, and venture capital.
Goal 5 of the United Nations Sustainable Development Goals is to achieve gender equality, but women hold only 15% of management positions and own only 14% of companies.
In the Caribbean, 30% of women-owned businesses face financial constraints, compared to only 25% of male-owned businesses.
A McKinsey report shows that if global companies can address gender equality, global GDP will increase by $26 trillion (US$13 trillion) by 2030.
13 million women in Latin America and the Caribbean dropped out of the labor force during the COVID-19 pandemic.
Several international agencies, such as the World Bank and UN Women, have been studying this issue and publishing data that should help the region reform its policy frameworks to address existing inequalities. When the situation of women trying to enter the market is assessed locally, it seems that these reforms are not progressing fast enough and are not having the expected impact.
Despite laws protecting people from discrimination, gender inequality persists. In some countries in the region, it is so pervasive that it threatens overall economic growth. Women experience higher unemployment, lower wages and limited opportunities than men. In some parts of the Caribbean, women shoulder a greater share of unpaid care responsibilities.
More must be done to change this trajectory and empower women entrepreneurs in the region. Only then can we move towards the desired goal of inclusive economic development.
The Barbados Small Business Association (www.sba.bb) is the not-for-profit representative body for micro, small and medium enterprises (MSMEs).
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