Supporting female entrepreneurship to reduce poverty

September 2017

Projects in Bolivia, Ethiopia, Nigeria and Bangladesh investigate the poverty reduction effects of access to credit for female entrepreneurship.

Error message

You are accessing PEP using an unencrypted connection. For your security, PEP only supports account logins using a secure protocol such as HTTPS. You can switch to HTTPS by trying to view this page again after changing the URL in your browser's location bar to begin with "https" instead of "http". Please contact site admin for help if this error continues.

A number of PAGE projects found that microfinance for small and medium enterprises (SMEs) reduces poverty. In the cases of Bolivia, Ethiopia, and Nigeria, there were also significant positive implications for women’s empowerment. However, this was not found to be the case in Bangladesh.

Microcredit for poverty reduction and female empowerment

In Bolivia, municipalities with access to microfinance were found to have a significant reduction in poverty in terms of unsatisfied basic needs, compared to municipalities without access. Additionally, women in municipalities with access were found to have greater influence in household decision-making, indicating greater empowerment. These findings are similar to those for Nigeria, where microcredit beneficiaries were found to be significantly less vulnerable than non-beneficiaries, reporting reductions in both the frequency of child labor and food shortages in the household. Female microcredit beneficiaries were also found to be significantly more empowered.

Supporting female entrepreneurship for national economic development

Many micro and small enterprises (MSEs) in developing countries are run by women. The results of the study in Ethiopia indicate that the country's MSE sector has the potential to support the Ethiopian economy in achieving its development goals. Furthermore, focusing on female-oriented MSEs is a key strategy for reducing poverty nationally. However, efforts to support female-oriented MSEs through microcredit have not been successful in Bangladesh as the female beneficiaries allow male members of their households to use the loans for entrepreneurial activities while they allocate their own time to household responsibilities.

 

This article is the third in a series presenting general conclusions and findings drawn from PAGE projects across the globe, highlighting a list of specific themes that have emerged as particular trends from the research teams’ perspectives following the evaluation of their countries’ priority issues.
See also: 
Why youth become entrepreneurs
Introducing a minimum wage can improve well-being
How migration and remittances affect welfare and employment at home

Partners

  •  
  •  

Funded by

  •  
  •