Female entrepreneurship hindered more by social and cultural constraints than access to finance

September 2016

Brookings article and ODI report concur with PEP findings: Female entrepreneurship is hindered by social and cultural factors more than by limited access to financial services.

Female empowerment and entrepreneurship in developing countries are hindered more by social and cultural factors than by limited access to financial services, suggests Eyerusalem Siba in a recent article published by the Brookings Institution.

Recent findings from research supported by PEP under the PAGE initiative (co-funded by DFID and IDRC) in several countries (Bangladesh, Cameroon, Nigeria and Senegal) generally support Siba’s claims, while providing additional evidence on the nature and variety of the challenges faced by female entrepreneurs.

Researchers and policy makers agree that investing in and empowering women contribute to growth, as indicated by the numerous governmental policies intended to encourage female entrepreneurship throughout the developing world. Furthermore, there is mounting statistical evidence that female entrepreneurship improves household well-being. However, creating this change is proving to be a challenge with women in developing countries facing numerous barriers to becoming entrepreneurs. 

Women's domestic responsibilities

Siba suggests that women in developing countries are disproportionately responsible for domestic work, such as housekeeping and childrearing, and as such, they are unable to invest as much time and effort into a business as could a male member of their household.

A recent PEP study in Bangladesh found that female beneficiaries of microcredit frequently allow male household members to use the loans for entrepreneurial endeavors rather than starting a micro-enterprise of their own due to domestic responsibilities being valued over entrepreneurship.

Social norms make accessing credit difficult

Siba also states that limited access to capital significantly restricts women’s entrepreneurial opportunities. While Siba indicates this is due to women being excluded from basic financial access, findings from PEP-supported studies in Cameroon, Nigeria, and Senegal tell a more complex story.

No direct discrimination of women with regards to eligibility for loans was found in any of the PEP-supported studies, however, various social and cultural factors mean that obtaining credit to start or support a business is significantly more difficult for women than for men.

The study in Nigeria found that micro and small enterprises have restricted access to credit. While this is not in itself discriminatory, almost all female entrepreneurs have micro or small enterprises with medium and large enterprises being owned and managed almost exclusively by men.

Similarly, the study in Senegal found that female ownership of a business does not affect its access to credit, meaning that there is no significant gender discrimination in acquiring financial services for business. However, the researchers did observe gender discrimination regarding senior roles in business. To be appointed to a managerial position, and thus have the responsibility of applying for financial services, women need a higher level of education than men.

In Cameroon, where the Constitution grants women the right to property, tradition dictates that only men can own and dispose of property as they wish. As found in the PEP-supported study, this means that women face significant restrictions in applying for loans, firstly in providing collateral, and secondly being permitted to use the loan as they please.

Policy needs to lead social change

The research team in Cameroon recommends that legal recourse be enforced to ensure women’s rights to family property, echoing Siba’s statement that societal issues must be addressed in order to empower women and enable female entrepreneurship.

The underlying factor of discriminatory social norms was also identified as a key constraint to women’s economic empowerment in a large-scale report published this month by the Overseas Development Institute (ODI).

Mirroring Siba’s article and the PEP teams’ findings, the ODI report lists limited access to education, limited access to property, assets and financial services, and disproportionate responsibility for (unpaid) housework and childcare as some of the barriers these cultural norms create for women.

Being an underlying factor rooted in culture and often reinforced by formal institutions, such as religious bodies, this problem is particularly difficult to address. Both Siba and the ODI highlight an urgent need to work with youth to prevent discriminatory norms being transmitted to the next generation. Providing education to both men and women through gender role conversations and challenging attitudes relating to what is “men’s” or “women’s” work is essential for long-term change.

Find out more about the projects and reports featured

PEP research

Country Project Documents


Policy Brief 139 Women's entrepreneurship and access to microcredit: Evidence from Bangladesh
Cameroon MPIA-12617 Policy brief 125 Macroeconomics implications of female entrepreneurs facing financial frictions in credit access: a DSGE model approach in Cameroon
Nigeria PMMA-12384 Policy brief 116 Is there discrimination against female entrepreneurs in formal credit markets in Nigeria?
Senegal PMMA-12576 Policy brief 127 Female entrepreneurship, access to credit and firms' performance in Senegal

External sources

Siba, E. (2016) Enabling female entrepreneurs and beyondBrookings Institute

Hunt, A. & Samman, E. (2016) Women’s economic empowerment: Navigating enablers and constraintsOverseas Development Institutue


The PEP projects described above were selected for support under the PEP research and capacity building initiative for Policy Analysis on Growth and Employment (PAGE) in developing countries. The PAGE program is co-funded by UK's Department for International Development (DFID) and Canada's International Development Research Centre (IDRC).


Logo global affairs canada
Logo Hewlett Foundation
Logo Co-Impact
Logo IDRC - CRDI Canada
Logo Mastercard Foundation