WORLD BANK GROUP GENDER THEMATIC POLICY NOTES SERIES: EVIDENCE AND PRACTICE NOTE WHAT WORKS IN SUPPORTING WOMEN-LED BUSINESSES? DIEGO JAVIER UBFAL OVERVIEW The narrative among policymakers about women’s entrepreneurship is slowly shifting from encouraging the creation of a high number of startups to focusing on supporting women who are well positioned to lead growth-oriented enterprises. Innovative women entrepreneurs can be agents of change and provide new solutions to global challenges, yet they face multiple barriers to growing their businesses. This policy brief examines the following four areas of constraints and provides evidence on measures to reduce gender gaps in each: 1. Human capital, including gender gaps in access to skills and networks 2. Factors constraining access to finance 3. Factors constraining technology uptake and market expansion 4. Contextual factors, including legal and regulatory constraints, social norms, access to care, and gender-based violence Three cross-cutting recommendations emerge from the literature and operational review: 1. Interventions need to be better targeted to women entrepreneurs who could derive the highest returns on them. The development of efficient targeting tools is a non-trivial task, and more work is required in this area. 2. Interventions need to be designed to consider the multiple constraints faced by women entrepreneurs. There is a consensus that women-led firms are affected simultaneously by several constraints. Data collection efforts could help identify those constraints, and a mix of innovative approaches could be used to test the most cost-effective composition of the package of support. 3. The differential needs of women entrepreneurs must be considered during program implementation, such as childcare support and convenient locations. The evidence also shows there is a need to target different types of interventions to those women-led firms that would derive the largest returns on them. Several interventions show promising results in supporting women entrepreneurs, but a number of them have not been rigorously evaluated. Therefore, it is important to continue to support the collection of sex-disaggregated data and the implementation of impact evaluations for promising innovative programs. A significant part of the existing evidence comes from policies tested with micro or small enterprises. More research is needed on which policies can work for larger women-led enterprises. TABLE OF CONTENTS Introduction 1 ADDRESSING HUMAN CAPITAL CONSTRAINTS WITH INTERVENTIONS ON SKILLS AND NETWORKS 4 INTERVENTIONS TO INCREASE ACCESS TO FINANCE 8 INTERVENTIONS TO INCREASE ACCESS TO MARKETS AND TECHNOLOGY 12 INTERVENTIONS THAT ADDRESS CONTEXTUAL CONSTRAINTS 16 Conclusions 18 Resources & References 19 This thematic policy note is part of a series that provides an analytical foundation for the update to the World Bank Group Gender Strategy (FY24-30). This series seeks to give a broad overview of the latest research and findings on gender equality outcomes and summarize key thematic issues, evidence on promising solutions, operational good practices, and key areas for future engagement on promoting gender equality and empowerment. The findings, interpretations, and conclusions expressed in this work are entirely those of the author(s). They do not necessarily reflect the views of the World Bank Group or its Board of Directors. This policy brief greatly benefited from detailed comments and edits by Leslie Ashby, Heather Kipnis, Tricia Koroknay-Palicz, Jana Malinska, and Laura Rawlings and from comments from the official reviewers: David McKenzie, Farid Tadros, and Felicia Siegrist. Additional useful comments were received from Girum Abebe, Natalia Agapitova, Ana Cusolito, Mona Haddad, Justin Hill, Jacobus de Hoop, David Francis, Fatou Giwa, Arti Grover, Hillary Johnson, Aleksandra Liaplina, Sundas Liaqat, Frederic Meunier, Mary Porter Peschka, Anja Robakowski-Van Stralen, Heidi Stensland, and Aileen Yang. The author of this note is Diego Ubfal, for more information, please contact dubfal@worldbank.org. INTRODUCTION Entrepreneurship can foster innovation, productivity Women-led firms typically register lower levels of labor, growth, and employment (Schumpeter 1934, Acemoglu and total factor productivity, and profits than men-led firms. Robinson 2012). According to the Global Entrepreneurship This points to the existence of differential constraints Monitor 2020 Survey, over half of the women in developing restricting the growth and performance of women-led countries are, or aspire to be, entrepreneurs. However, most firms that have been widely documented (e.g., Aterido lead subsistence-oriented micro-businesses, which are et al. 2011, Bardasi et al. 2011, Campos et al. 2019, Islam et not seen as key drivers of innovation and growth (La Porta al. 2020, Allison et al. 2021, World Bank 2021, Fang et al. and Schleifer 2014).1 The narrative among policymakers 2022).3 Moreover, recent studies show that the COVID-19 about women’s entrepreneurship is slowly shifting from pandemic has had a disproportionate negative impact on encouraging the creation of a high number of startups to businesses led by women (Goldstein et al. 2020, Kugler et focusing on supporting women who are well positioned al. 2021, Liu et al. 2021, Torres et al. 2021). When the skills to lead growth-oriented enterprises (Elam et al. 2021). of innovative women entrepreneurs are not channeled Innovative women entrepreneurs can be agents of change to their best use, there is a misallocation of resources and provide new solutions to global challenges. that can have major implications for economic growth and development (Chiplunkar and Goldberg 2021). Some This policy brief is based on evidence from rigorous studies estimate economic gains in the order of $5-6 research and operational experience that identify policy trillion if women started and scaled new businesses at the solutions to reduce gender gaps in entrepreneurship. The same rate men do (Siegrist 2022).4 focus is on measures that can support women who lead growth-oriented micro, small, and medium enterprises The existence of constraints restricting the growth of (MSMEs) in improving the performance of their businesses. women-led firms is evidenced by the fact that the share Not addressed are equally important interventions of businesses that are led by women decreases as the size that affect women’s selection into entrepreneurship or of the firm increases (Figure 1). Women-led businesses that foster basic income generating activities, such as represent 25 percent of formal businesses around the subsistence enterprises.2 world.5 However, the share of women-led firms decreases from 27 percent of small formal firms to 17 percent of large firms. This pattern is replicated around the world, except in the Middle East and North Africa and South Asia, where there is an overall smaller share of formal women-led firms. 1 According to the Global Entrepreneurship Monitor 2020 data, 91 percent of women-owned businesses have five or fewer employees, while the share of men-owned business with five or fewer employees is 80 percent (Elam et al. 2021). 2 This brief does not explore the argument that differential selection into entrepreneurship for women and men could explain a fraction of the profit gender gap. That would be the case if women’s decision to start a business rather than seeking wage work was more affected by constraints than men’s decision (Campos et al. 2019). This brief also does not focus on policies for very large, limited liability companies where the policy evidence is still limited. 3 However, some studies find no evidence of gender gaps in profits or productivity for enterprises of larger size (World Bank 2021, Fang et al. 2022). 4 These estimates are based on a methodology developed by McKinsey for the UK Rose Review and are in line with recent analysis carried out by the Boston Consulting Group, which shows that if women and men participated equally as entrepreneurs, the global economy could grow by $2.5 trillion to $5 trillion (Unnikrishnan and Blair 2019). 5 In these calculations, women-led firms are defined as those that have more than 50 percent female ownership or a top manager who is a woman. Alternative definitions result in a similar pattern by firm size across regions. In the sample used to prepare the graph, the share of firms with a woman top manager is 18 percent (per the definition of women-led business adopted by Islam et al. 2020), with more than 50 percent female ownership is 20 percent, with a woman top manager and at least one woman owner is 14 percent (per definition adopted by Fang et al. 2022), and with at least 20 percent female ownership or a woman top manager is 22 percent. The share with at least one woman owner is 37 percent, and only for this variable the pattern by size is not so clear. However, Fang et al. (2022) argue that having a woman manager better captures firms actually led by women than having at least one woman owner. These shares are consistent with data collected directly from business registers in 81 economies by the We-Data project (see Meunier et al. 2022), which show that women represent 25 percent of new business owners in limited liability companies, 25 percent of new business directors, and 33 percent of new sole-proprietors. FIGURE 1. PERCENTAGE OF FORMAL FIRMS LED BY WOMEN BY REGION AND FIRM SIZE Source: Author’s calculation using the last survey available for each country in the pooled World Bank Enterprise Surveys Microdata. These surveys target formal firms with at least five employees. Replication codes are available upon request. Notes: A woman-led firm is defined as a firm with more than 50 percent of female ownership or with a woman top manager. Statistics were obtained by using sample weights considering the design of the Enterprise Surveys. AFR=Africa, EAP=East Asia and Pacific, ECA=Europe and Central Asia, LAC=Latin America and the Caribbean, MNA=Middle East and North Africa, SAR=South Asia. What factors drive the global gender gap in firms’ performance? Multiple factors constrain women’s decisions on what sector to enter, how much capital and labor to use in their firms, and what business practices and technology to adopt. These and other considerations contribute to differences in firm performance (Campos et al. 2019, Siegrist 2022). This policy brief examines the following four areas of constraints and provides evidence on measures to reduce gender gaps in each: 1. Human capital, including gender gaps in access to skills and networks 2. Factors constraining access to finance 3. Factors constraining technology uptake and market expansion 4. Contextual factors, including legal and regulatory constraints, social norms, access to care, and gender-based violence This policy brief builds on the review by the Women Entrepreneurs Finance Initiative (We-Fi) on what works in supporting women entrepreneurs (Siegrist 2022) and presents evidence on measures to reduce gender gaps along four dimensions linked to the areas of constraints: access to skills and networks, access to finance, access to technology and markets, and contextual constraints. This evidence is complemented with examples of how these findings are informing World Bank Group’s operations and initiatives. Evidence is categorized into three groups: • “Effective” indicates that there is more than one causal impact study demonstrating the effectiveness of the policy across contexts. • “Emerging” indicates that there is only one piece of causal evidence, mixed results or a strong body of descriptive evidence pointing to improvements in the performance of women-led firms. • "Less promising” indicates that there is causal evidence that demonstrates that the intervention has limited or negligible impact. In this case, differen versions of the policy that could be more successful are discussed. 3 ADDRESSING HUMAN CAPITAL CONSTRAINTS WITH INTERVENTIONS ON SKILLS AND NETWORKS Gender gaps are pervasive in the critical skills and be even lower for women entrepreneurs, particularly networks needed to run a successful business (World Bank where their opportunities are constrained by social 2021b). More than $1 billion is spent subsidizing business norms (Jayachandran 2021, Gine and Mansuri 2021). Field training programs around the world (McKenzie et al. 2021). et al. (2016) find that allowing women to bring a friend to Traditional business training programs offer classroom- the training allows them to set more ambitious goals for based learning that covers a range of recommended their business and take more loans, indicating that the business practices, including accounting, marketing, human role of peer support in increasing women’s aspirations resource management, finance, and the preparation of could be important.6 Lafortune et al. (2018) show that business plans. However, rigorous evaluations of traditional adding entrepreneurs into business training to act as role business training programs indicate that they are not models can significantly enhance the effects of the training. transformative for women-led businesses (McKenzie and Overall, traditional business training programs alone do Woodruff 2014). not show great promise in improving the performance of women-led businesses, but variations in content, focus, or A growing number of studies show that training programs implementation could make them cost-effective. can improve the performance of women-led businesses when they focus on socio-emotional skills, women- Approaches to make traditional business training cost- specific constraints, or networking opportunities. effective at scale. The small effects of traditional business Moreover, adapting training programs to address training can translate into a profitable investment, even for constraints to women’s participation can significantly women-led firms, if costs per participant are low or the increase uptake (Beegle et al. 2020, IFC 2020). programs are better targeted. McKenzie (2021) discusses the following three approaches that governments can use Traditional business training programs An influential to provide business training at scale. review of randomized controlled trials in different contexts indicates mostly no statistically significant average effects Develop a market for business services (Argidious of traditional business training programs for either men Foundation, 2021). Maffioli et al. (2022) show in Jamaica or women entrepreneurs (McKenzie and Woodruff that both men and women-led firms are willing to pay 2014). The evidence shows that training programs were a positive amount for business training, indicating that successful at encouraging the adoption of a small share of entrepreneurs believe training could be profitable. They recommended business practices correlated with business find that those who pay for the training are more likely to growth (McKenzie and Woodruff 2017), but the change was attend. However, demand drops sharply when the cost too small to result in improved performance. charged to participants is more than 25 percent of the full cost of the training, and poorer and smaller businesses However, new evidence indicates that the effects of are less likely to pay and attend the training once the traditional business training programs might not be null. price rises. Instead of subsidizing business training, firms McKenzie (2020) and McKenzie et al. (2021) conducted could be offered a subsidy to hire experts on the topics a meta-analysis of the literature, including new papers that the training would teach. Anderson and McKenzie with more statistical power to detect effects. They show (2022) show in Nigeria that this can be an efficient that the typical training program increases profits and way for larger firms to hire accountants or marketing sales by an average of 5 to 10 percent, which means that experts, either from within (insourcing) or using external they could pass cost-benefits calculations if costs were providers (outsourcing). low enough. Some evidence indicates that effects might 6 However, there is evidence that it is also important to avoid training programs that can generate unrealistic aspirations and might lead to frustration (McKenzie et al. 2022). BOX 1. TARGETING GROWTH-ORIENTED FIRMS IN MALAWI The Financial Inclusion and Entrepreneurship Scaling (FInES) Project (P168577) aims to promote entrepreneurship and capabilities of SMEs in Malawi, including addressing COVID-19 implications, with a target of including at least 40 percent women-led businesses. FInES will offer firms three stages of interventions, ranging from group training (in socio-emotional skills and traditional business skills) to more personalized interventions, such as one-on-one mentoring and tailored services to foster entry into new markets. Using a rigorous impact evaluation, the project will design, implement, and test a novel funneling approach to screen and target growth-oriented entrepreneurs (Grover and Imbruno 2020). This work is in partnership with the World Bank’s Finance, Competitiveness and Innovation Global Practice, the Gender Group, and the Africa Gender Innovation Lab. The funneling approach consists of offering less expensive interventions to a broad range of entrepreneurs, and then screening who is funneled ahead so the more expensive interventions are targeted toward a narrower set of firms that would benefit most from them. At every stage of the funnel, the project will screen firms that graduate to receive subsequent interventions, each of which aligns with one key growth constraint. Firms completing their assigned interventions will be offered preferential access to finance. The project will also test the differential impact of specific interventions on business practices and firm growth for men and women-led businesses. Each intervention will be adapted to address the differential constraints faced by women entrepreneurs (e.g., offering to bring a caretaker to training, convenient times and locations, and a safe environment). 2 Offer virtual instead of in-person training. This could 3. Target business training programs to firms that derive be done through television shows (edutainment),7 SMS the largest returns on them. For example, the World messages (with a focus on rule-of-thumb messages), Bank is piloting a funneling approach in Malawi, which applications on mobile phones, or interactive online will provide less expensive interventions to a larger training programs. Such online programs have expanded group of firms and then use firms’ performance in significantly during the COVID-19 pandemic,8 but those interventions to identify firms that are offered evidence remains limited on their effectiveness.9 This more expensive interventions (see Box 1). Selecting approach requires addressing gender gaps in accessing women-led entrepreneurs with the highest returns digital technologies and skills. on different interventions is not a trivial task. Ellis et al. (2022) highlight that there is a different and larger set of variables that predict loan growth for women than men, consistent with greater barriers to growth among women entrepreneurs.10 7 The impact evaluations of two edutainment shows for entrepreneurs in Tanzania (Bjorvatn et al. 2019) and Egypt (Barsoum et al. 2022) indicate the programs made viewers more interested in entrepreneurship, but they did not affect business creation or business outcomes. 8 For example, Kayumbi (2021) describes how a commercial bank in Kenya used IFC’s Grow Learn Connect Program to switch from face-to-face to online training for MSMEs. 9 Lafortune et al. (2022) show that a gamified virtual entrepreneurship challenge for secondary students in Rwanda during the COVID-19 pandemic had statistically significant effects on keeping their small business activities open and increased the profits for both girls and boys. 10 McKenzie and Sansone (2019) show that even counting with a significant amount of data and using machine learning tools, it is not possible to have good predictive power to select top performers. Bryan et al. (2022) find that using a large set of psychometric variables can significantly improve prediction on the effect of large versus small loans. Similarly, Ellis et al. (2022) find that motivations for entrepreneurship and constraints faced can significantly improve prediction. Bardasi et al. (2021) find stronger effects of business training in Tanzania for more experienced women entrepreneurs, indicating that experience can be a variable used for targeting, which is in line with the evidence from microfinance cited in this brief. In small communities, using knowledge from peer entrepreneurs (in an incentivized way to avoid strategic reporting) can help select those entrepreneurs with the largest returns (Hussam et al. 2022). Changing content with socio-emotional skills training. A randomized study in Ethiopia warns about the importance A growing body of evidence indicates positive effects of of recruiting high-quality trainers to achieve positive results psychology-based training programs on both men and (Alibhai et al. 2019). Also, one randomized study in Jamaica women-led businesses. This type of training focuses on finds that the effect of personal initiative training was not changing the way entrepreneurs think about their business significant for women entrepreneurs who were less poor instead of recommending a set of business practices.11 or more likely to be single than in the Togo sample, which The training aims at building soft skills that have been could indicate that the training is particularly effective linked to successful entrepreneurship (e.g., proactiveness, for women with less bargaining power (Ubfal et al. 2022). future orientation, self-efficacy, perseverance after failure, Another data point of causal evidence comes from Mexico, initiative). An influential randomized study in Togo shows where a program combining personal initiative training that personal initiative training was more effective than and traditional business training found significant effects traditional business training at increasing both men and on business outcomes for women microentrepreneurs women entrepreneurs’ profits (Campos et al. 2017). Personal (LACGIL 2021). More evidence is needed on the initiative training in such context was highly cost-effective, complementarity between personal initiative training and paying for itself within one year. The study has significantly other interventions, such as access to finance (see Box 1 influenced World Bank operations, with around 35 projects and Box 2), and on heterogeneity of returns to understand in 24 countries implementing or planning to implement a whether socio-emotional skills training can be effective for variant of personal initiative training. larger firms.12 BOX 2. SCALING-UP SUPPORT TO WOMEN ENTREPRENEURS IN THE DEMOCRATIC REPUBLIC OF CONGO Approved in 2018, the SME Growth and Development Project (PADMPME, P160806) provides capacity development and grants to women entrepreneurs, young entrepreneurs, and growing SMEs in the Democratic Republic of Congo (DRC). It has partnered with the Africa Gender Innovation Lab to conduct a field experiment that is testing the effect of combining personal initiative training for women entrepreneurs with $2,000 in-kind grants. The experiment includes a group of women who are invited to the training with their husbands, with the goal of testing the effects of addressing socio-cultural constraints that might restrict investments in women’s businesses. Project implementation is advanced and initial results indicate that inviting husbands to the training increased women’s participation. A follow-on project, Empowering Women Entrepreneurs and Upgrading MSMEs for Economic Transformation and Jobs (TRANSFORME, PI 178176) approved in May 2022, aims to expand the reach and impact of PADMPE on women- led enterprises. It will focus on creating a market for business development services to generate sustainable sources of finance and training for women entrepreneurs and MSMEs. It will also support the implementation of existing gender-inclusive legislation to help improve the business environment for women-led firms. The design of the two DRC projects has also informed that of the Burundi Skills for Jobs: Women and Youth Project (P164416), which incorporates behavioral training for women and youth entrepreneurs. 11 Even not focusing on recommended business practices, soft skills training programs prove more effective than traditional business training at fostering adoption of those practices (Campos et al. 2017, Ubfal et al. 2022). This is consistent with evidence that shows providing information to entrepreneurs on recommended business practices is not effective unless combined with behavioral nudges such as motivational movies or peer counseling (Dalton et al. 2021, Bruhn and Piza 2022). 12 Campos et al. (2018) show that effects are positive for both more and less educated women in the Togo sample. Recent studies indicate that similar training can also be effective in other contexts (see Montalvao 2022 for a field experiment offering personal initiative training to women farmers in Mozambique). Changing content and focus with gender-oriented More promising results are found by Anderson et al. training. There is evidence that training programs (2022), who show large effects on sales for small business focusing on the differential constraints faced by women owners in Uganda when mentored via Skype by volunteer entrepreneurs can improve the performance of women- international coaches. The improvements in sales were led businesses. Two randomized controlled trials that larger for firms linked to experts in marketing (Anderson evaluated the International Labour Organization’s Gender et al. 2021), but results were not disaggregated by gender. and Enterprise Together program find significant effects Moreover, the costs of coaches should be factored in when on adoption of recommended business practices (Bulte considering applying this intervention in other settings and et al. 2016 in Vietnam) and persistent effects on profits could be related to the outsourcing approach previously (McKenzie and Puerto 2021 in Kenya). Such programs discussed. For larger enterprises, more expensive combine material from traditional business training (e.g., individual consulting shows significant and persistent recordkeeping, finance) with gender-oriented topics, such effects on the performance of businesses (Bloom et al. 2013, as how to enter male-dominated sectors, overcoming Bloom et al. 2020). These results are not disaggregated by stereotypes, and dealing with household demands. gender and programs do not translate into well-developed However, there is still no evidence on the additional value markets for consulting (McKenzie 2021). Offering small- of the gender-specific content on top of the traditional group rather than individual consulting to firms is a model content. A significant body of qualitative evidence shows that could be more cost-effective, as shown in Colombia that a training program can achieve positive results if both (Iacovone et al. 2022). its content and implementation consider the differential needs of women entrepreneurs (Beegle et al. 2020, Networking opportunities. There is a wide consensus IFC 2020, Argidius Foundation 2021). This could mean about the importance of social networks in the process of including implementation features, such as childcare innovation and entrepreneurship. A few randomized con- services or the opportunity to bring a caretaker, convenient trolled trials indicate that interventions that encourage times and locations, safe transportation, and anti- firms to interact with other firms can significantly improve harassment policies. entrepreneurship outcomes (e.g., Cai and Szeidl 2018 for in-person interaction in China, and Vega-Redondo et al. More personalized services through mentorship and 2019 for virtual interaction across Africa). Non-causal evi- consulting. Mentors (usually for smaller firms) or consul- dence from programs focusing on networking activities tants (paid typically by larger firms) could provide per- for women entrepreneurs indicates that they might lead sonalized advice to firms. There is mixed evidence on the to an expansion of women’s business networks.13 How- effect of mentorship for small firms. Brooks et al. (2018) ever, causal evidence is not available on the effects of find that mentorship is more effective than traditional networking opportunities on the business performance of business training for women-owned microenterprises in women-led businesses. Kenya. However, the effects on profits vanish when the re- lationship with the mentor ends. This could be linked to Studies around the world indicate that women the ever-changing demands faced by small enterprises entrepreneurs have smaller business networks than men and the need for sustained support. Also looking at Ken- and that their networks are mostly comprised of other ya, McKenzie and Puerto (2021) find that mentorship does women, which could make networking interventions more not increase the effects of the gender-oriented business impactful for them. Incubators and accelerators usually training offered. Bakhtiar et al. (2021) find that a mentor- incorporate networking activities into their package of ship program in Ethiopia did not significantly increase the support (Gonzalez-Uribe and Hmaddi 2022). A promising profits of the mentees, but mentoring improved the busi- avenue for research is to test how the different services ness performance of the women entrepreneurs who acted offered by accelerators (including networking) and their as mentors. interaction benefit growth-oriented women entrepreneurs. 13 For example, IFC (2017) reports that a mini-MBA program focusing on networking activities helped women expand their businessnetworks in the West Bank and Gaza. INTERVENTIONS TO INCREASE ACCESS TO FINANCE14 There is wide consensus that women entrepreneurs are More recent studies indicate that microcredit, if targeted less likely to gain access to financial services than men appropriately, can have significant effects on business entrepreneurs in different contexts around the world. This performance. Positive effects are found for entrepreneurs applies to services, such as credit and equity financing, who started business operations before the expansion of insurance, and savings. There is evidence that the gender microcredit in their area (Banerjee et al. 2019, Chernozhukov gaps are wider for middle-sized firms, which are too et al. 2018, Meager 2019). Moreover, relaxing some of the big for microfinance institutions and too small for riskier features of the traditional approach (e.g., allowing for products offered by banks, venture capitalists, and private flexible repayment and removing joint liability) shows equity firms (Siegrist 2022). promise (Field et al. 2013, Barboni and Agarwal 2018, Battaglia et al. 2021). More research is needed on how these IFC (2017b) estimates that the finance gap for women- innovations could be adapted to design products for larger owned microenterprises amounts to $173 billion, which businesses (Siegrist 2022). represents 24 percent of the overall finance gap for microenterprises. The finance gap for women-owned Reducing the role of traditional collateral in lending SMEs (WSME) is $1.5 trillion, which represents 33 percent decisions. Microloans using social collateral have increased of the SME overall finance gap. Given that women are less access to finance for women microentrepreneurs. Other likely than men to own property, collateral requirements financial instruments that reduce the role of traditional present a key constraint that hinders the ability of women- collateral are also being tested to expand lending at led firms to access loans. This could be compounded by larger loan sizes for women-led businesses.15 These discriminatory practices against women-led businesses by instruments include alternative forms of assessing risk (e.g., male investors who make most large funding decisions in psychometric tests, cashflow-based lending, and digital debt financing (IFC et al. 2019). footprints)16 and securing loans (e.g., invoice financing, revenue-based financing, capital leasing, asset-based Traditional microcredit. The traditional microcredit lending finance, digital collateral that uses lockout technology, model focuses on providing women with small loans to microequity, and mutuality). start and grow microbusinesses. The model relies on social collateral (women are asked to form groups and are jointly Psychometric tests can be used to predict probability of liable for their loans) as an alternative to physical collateral repayment and to reduce collateral requirements. Studies to solve moral hazard and adverse selection problems show that these tests have predictive power to distinguish and to provide dynamic incentives (slightly larger loans) differences in credit risk (Klinger et al. 2013, Bryan et al. for repayment. Randomized controlled trials from several 2022).17 Recent pilots in Peru and Ethiopia show promising contexts show no evidence of transformative effects for effects of their use in increasing higher-value loans, with the average borrower (Banerjee et al. 2015, Cai et al. 2021). the pilots in Ethiopia focusing on women entrepreneurs Studies find increases in borrowing and some business (Arraiz et al. 2017, Alibhai et al. 2019b, Alibhai et al. 2022). creation, but no significant effects on performance for the However, evidence is still limited on the impacts of using average business. alternative methods of assessing lending risk and securing 14 See Field et al. (2023) for more details and additional examples. 15 A complementary strategy to increase access to finance for women-led businesses is to increase women’s control over assets, for example, by encouraging joint titling for spouses. There is causal evidence that joint titling can increase women’s access to capital in agricultural settings (Ali et al. 2014). 16 Digital footprints include mobile phone usage, social media data, and digital transaction records from mobile money, banking, or e-commerce platforms. One relevant example is the history of orders for retailers who are active in digital platforms. IFC (2022) describes the experience of a digital distribution platform active in Indonesia and the Philippines that plans to use the digital footprint of women-owned firms to improve its credit-scoring algorithm. 17 Uncollateralized high-interest rate loans of small size offered via mobile money show large uptake rates in Africa (Robinson et al. 2022). However, opaque loan terms linked to the low financial literacy of many clients and inattention to hidden costs are features of concern (Brailovskaya et al. 2021). loans on business performance. One study in Ethiopia finds worst performers and large positive effects for the top impacts of psychometric score-based lending on access to performers, who were less likely to be women. Finally, credit and firm survival among women-led firms (Alibhai et Ellis et al. (2022) provide evidence that a different set of al 2022),18 and a study in Nigeria on cashflow-based lending variables predict loan growth for women than men. This is ongoing.19 Offering alternative ways to secure loans, such highlights the relevance of designing effective targeting as asset-based finance (Bari et al. 2021), digital collateral tools (see Box 1 and Footnote 11).22 (Gertler et al. 2021), or microequity and mutuality (Cordaro et al. 2022) may also help expand women’s access to credit. Blended finance.23 Blended finance instruments can play Such products show promise, but so far, there is no causal a role in reducing gender gaps in access to finance by evaluation estimating their effects on the performance of rebalancing the risk-return profile of investing in women- women-led businesses. led businesses (see Box 3). Blended concessional finance solutions can include performance-based incentives to In-kind or targeted larger cash grants or loans. A pattern banks, equity co-investments, partial portfolio guarantees, in a series of experimental studies shows that cash grants or a combination of products (Liaplina and Sierra- to micro or small firms improve business outcomes Escalante 2022). Large commercial banks and multilateral exclusively for men-led businesses (Jayachandran 2021). development banks are beginning to use gender bonds One key reason is that women entrepreneurs do not issuance with concessional elements. While these products manage to invest in their own business, because they use have not been rigorously tested, they show promise in the funds to satisfy other household demands or family benefitting larger women-led businesses. requests or they invest in the business of the husband (Jakiela and Ozier 2016, Bernhardt et al. 2019).20 Offering The range of products could include equity co-investments in-kind grants (Fafchamps et al. 2014, James et al. 2022) in startup accelerators and early-stage funds targeting or large grants to more successful women entrepreneurs women-led businesses (Liaplina and Sierra-Escalante (McKenzie 2017) is more effective at improving their 2022). It could also include trade credit and guarantees business performance. The combination of less fungible and insurance for exporting. For example, IFC’s Banking on funds that act as a commitment device (either because they Women Global Trade Finance Program aims to increase are in-kind or large enough and labeled for the business) trade finance to women importers and exporters. There is and targeting grants to growth-oriented businesses (e.g., to still very little evidence on the effects of trade and supply winners of business plan competitions)21 can have strong chain finance, private equity or venture capital funds, positive effects. accelerators, and crowdfunding on the performance of women-led businesses (Argidius Foundation 2021, The importance of targeting is confirmed by recent findings Siegrist 2022). A relevant complementary intervention is an pointing to significant heterogeneity in the returns on loans. investment readiness program, which aims to prepare firms Crepon et al. (2022) show in Egypt that the heterogeneity to be willing to consider equity, make relevant changes, of effects for the same instrument across entrepreneurs is and pitch to investors. Cusolito et al. (2021) evaluate such a more important than differential effects across instruments program in the Western Balkans and find that it significantly (in-kind or cash grants, or loans). Similarly, Bryan et al. (2022) increased the probability of receiving outside funding for find significant heterogeneity of effects when offering smaller firms and teams with at least one woman founder. larger loans in Egypt, with large negative effects for the 18 Alibhai et al. (2022) work with a microfinance institution in Ethiopia to randomize the offer of uncollateralized loans among 131 women who had passed a psychometric test. The study finds that women who were offered the loan significantly increased their access to formal finance at the extensive and intensive margins and were more likely to keep their business open during the COVID-19 pandemic, but they did not significantly improve their business outcomes. 19 The cash flow-based loan product is part of a broader initiative by the World Bank in cooperation with the Development Bank of Nigeria and commercial banks to design instruments that can unlock commercial financing for women entrepreneurs. 20 Friedson-Ridenour and Pierotti (2019) show that women in Ghana choose to hide income from their husband and might even prefer not to expand their business if doing so reduces their chances of obtaining economic support. 21 Several studies indicate that women are less likely than men to participate in a competition; however, they are more likely to enter competitions when facing other women rather than men (Campos et al. 2019). This indicates that designing women-only competitions might have significant effects on uptake. 22 Cai and Szeidl (2022) find that the positive effects of a loan program in China came at the expense of competitors that did not receive the loan. This indicates that financial expansion programs should carefully consider possible negative spillover effects to firms that do not participate in the program. 23 For more details, see Field et al. (2023). Secure and convenient savings instruments. Worldwide, performance. Groh and McKenzie (2016) designed and the share of adults who report saving to start, operate, tested an innovative product for entrepreneurs covering or expand a business is lower among women than men, macroeconomic risk, but they did not find significant and the same holds true for access to savings accounts at effects on business outcomes. financial institutions.24 The lack of reliable ways to save, and the inability to access convenient formal savings products, Innovations in design in this area are needed, including can compound the effects of credit constraints and limit products tailored to the needs of women-led businesses. business growth (Blattman et al. 2014). An early influential For example, an Italian bancassurer offers business experiment in Kenya shows that offering basic savings interruption protection to women entrepreneurs; women accounts to women market vendors who worked near the can suspend loan payments for up to one year under a bank had large effects on business investments (Dupas and series of circumstances, such as becoming mothers. Given Robinson 2013). In another study across three countries, women’s responsibilities as caregivers and entrepreneurs, Dupas et al. (2018) use a more general sample and find solutions that help them mitigate risk and protect them limited average effects of access to basic savings accounts. in the event of personal crises or business interruption are They conclude that more tailored products with lower promising. IFC’s Women Insurance Program has partnered transaction costs and complementary interventions might with eight insurance companies in Africa and Asia to pilot be necessary. For example, when microfinance loans were insurance solutions for women (e.g., life insurance policy disbursed by default into digital savings accounts labeled to finance personal goals for women entrepreneurs in for women’s business, the loans had significant effects on Nigeria; an insurance bundle protecting against accidents, business performance (Riley 2022).25 Transaction costs can fire, and burglary for microbusinesses; and comprehensive be significantly reduced with mobile banking (de Mel et al. insurance coverage for women-led MSMEs in Ghana). 2022). Combining access to savings instruments with othe3 Reducing gender biases among financial intermediaries. interventions (e.g., incentives to register or training) can Some studies argue that women investors are more likely also be effective.26 More work is needed on the effects of than men investors to invest in women-led businesses (IFC savings products for larger firms.27 et al. 2019). This points to the need to increase women’s Insurance In many different contexts, women are more leadership at banks and investment funds. However, risk averse than men, which might lead to less risky evidence from two studies in Türkiye shows that both men investments in their businesses. IFC and AXA (2015) and women loan officers held implicit discriminatory views estimate that women’s individual spending on insurance against women, but the bias decreased with experience premiums will grow three times its current size to reach (Alibhai et al. 2019c, Brock and De Haas 2021). Gender $1.4–1.7 trillion by 2030. Insurance products have large intelligence training to reduce unconscious bias might be potential, but they have not been rigorously tested with effective.28 Given that they do not collect sex-disaggregated women-led businesses. Bianchi and Bobba (2013) argue data, many banking institutions are unaware of gender that predictable income from cash transfers can reduce biases in their products. The collection and analysis of risk aversion and encourage business investment. Battaglia sex-disaggregated data should be a priority for financial et al. (2021) claim that flexible loan repayment options can institutions, government, regulators, and corporations.29 act as an insurance mechanism and encourage business 24 Based on author’s own calculations using World Bank Gender Data Portal and the 2017 Global Findex Database. The 2021 Global Findex data indicate that the gender gap in account ownership across developing economies fell to 6 percent from 9 percent, where it had been for several years. 25 Default effects help encourage savings. Somville and Vandewalle (2018) and Field et al. (2021) show that savings increase more when funds are directly transferred into accounts instead of giving participants the option to deposit those funds. 26 Campos et al. (2023) show that combining monetary incentives to register a business with access to banking services had significant effects on business performance for both men and women entrepreneurs in Malawi. Buvinic et al. (2020) find an intervention combining financial training, business training, mentorship, and incentives to promote agent banking savings accounts had significant effects on women-led business in Indonesia. Batista et al. (2022) find significant effects in Mozambique of combining a short rule-of- thumb training with mobile saving accounts. 27 IFC’s Banking on Women Program develops products targeted to larger firms. 28 IFC (2021) describes the case of Gender Sensitivity Training for 660 members of senior management, staff, and agents of an insurance company in the Philippines. A non-causal evaluation found that the training helped achieve visible changes in participants’ gender bias and improved their ability to engage with women customers. 29 For more details on data collection initiatives, see Moylan et al. (2023). BOX 3. TWO LARGE INITIATIVES TO SUPPORT WOMEN ENTREPRENEURS The Women Entrepreneurs Finance Initiative (We-Fi) is a collaborative initiative established in 2017 with initial funding from 14 countries to support WSMEs in developing countries. We-Fi’s theory of change identifies the key constraints faced by women entrepreneurs and the type of interventions that could help improve the performance of women-led businesses (Siegrist 2022). It invests in the design and evaluation of interventions that increase WSMEs’ access to finance, training, mentorship, and networks, and markets and improve the enabling environment. The World Bank hosts the We-Fi Secretariat and projects are implemented by six multilateral development banks. As of June 2022, We-Fi has provided $1 billion in direct financing for women entrepreneurs and mobilized $1.9 billion in funding from public and private sources. We-Fi projects have reached 44,000 women-led businesses in 59 countries with 268 partners. The initiative expects to benefit over 200,000 women entrepreneurs. The Women Entrepreneurs Opportunity Facility (WEOF) is a 10-year facility launched in 2014 by IFC’s Banking on Women and the Goldman Sachs Foundation to help expand access to capital for women entrepreneurs and demonstrate the commercial viability of investing in women. WEOF offers funding for blended finance, advisory services, and market research to catalyze financial services to WSMEs. By 2022, WEOF had reached 144,000 women entrepreneurs, putting it ahead of schedule in achieving its goal of financing 100,000 women entrepreneurs by 2024. INTERVENTIONS TO INCREASE ACCESS TO MARKETS AND TECHNOLOGY One leading explanation of the gender gap in business Encouraging women to cross over to male-dominated performance is that women-led businesses tend to be sectors. A unique report with data from 10 countries segregated into lower-paying industries and sectors provides non-causal evidence that women in male- around the world (World Bank Group 2021).30 There concentrated sectors earn higher profits than women in is evidence that women entrepreneurs in female- female-concentrated sectors, even after controlling for a concentrated sectors earn lower profits than women and series of observable characteristics (World Bank 2022, see men in male-concentrated sectors (Goldstein et al. 2019).31 Box 4). Interventions encouraging women entrepreneurs Interventions encouraging women to cross over to male- to cross over to male-dominated sectors show promise. dominated sectors show promise. Women-led businesses Factors correlated with entering male-dominated sectors are also less likely to export, have less access to corporate include higher access to male mentorship (including value chains, and get a very small share of public or private spousal support), role models, and information (Goldstein procurement (IFC 2021b). On the demand side, constraints et al. 2019, LACGIL 2021). A recent field experiment in the are linked to gender gaps in networks, skills, and finance. Republic of Congo shows that providing young women On the supply side, many large corporations report lacking with information on trade-specific earnings can shift sex-disaggregated data on procurement and distribution their preferences toward male-dominated trades (Gassier channels that would allow them to take positive action. et al. 2022). Interventions fostering the participation of Finally, women entrepreneurs have less access than men husbands, role models, or networking could have similar entrepreneurs to digital skills and digital technologies effects. Addressing men’s misperceptions and engaging and platforms. This could be linked to gender gaps in adolescents on gender attitudes could foster cross over as mobile phone ownership and access to the Internet due these efforts have increased labor force participation for to affordability, gender norms, or security concerns, which women in some contexts (Bursztyn et al. 2020, Dhar et al. limit women-led firms’ expansion in e-commerce. There is 2022). However, there is still no rigorous evidence on whether still very little causal evidence on the effects of interventions these types of interventions help women entrepreneurs dealing with these constraints on the performance of improve the performance of their businesses. Moreover, it women-led businesses. is important to complement cross over interventions with anti-harassment and related measures. BOX 4. BREAKING BARRIERS: FEMALE ENTREPRENEURS WHO CROSS OVER TO MALE-DOMINATED SECTORS Under the guidance of the World Bank’s Gender Group, the Gender Innovation Labs of three regions (Africa, East Asia and Pacific, and Latin America and the Caribbean) joined forces to generate a unique report on the characteristics of women who cross over to male-dominated sectors. The report gathers evidence and analyzes data from 10 countries and a global survey of entrepreneurs to highlight potential interventions that can encourage women entrepreneurs to enter male-dominated sectors. It provides non-causal evidence that women who manage to cross over reduce gender gaps in profits. Key recommendations include programs that encourage spousal support, connect women to mentors and role models, provide information and training on male-dominated sectors, and increase access to capital. The report warns that such interventions should be combined with measures to avoid harassment and other challenges of operating in the environment of typically male-dominated sectors (World Bank 2022). 30 Evidence from Africa and Southeast Asia shows large gender gaps in profits even within sector, which means that sectorial segregation cannot fully explain the profits gender gap (Campos et al. 2019, World Bank 2021). Moreover, sector of activity explains little, if any, of the gender gap in microenterprise profits in Indonesia, Lao PDR, and Vietnam (World Bank 2021). 31 There is significant concentration of women-led business in retail, education, social services, tourism—all sectors hit hard by the COVID-19 pandemic (Torres et al. 2021). Interventions fostering trade readiness and access to evaluated, include marketing interventions to attract new new markets. Compared to men entrepreneurs, women customers and improve product design, export-readiness entrepreneurs face stronger constraints that restrict programs, virtual trade missions and participation in fairs, their ability to trade and realize the benefits of trade and information on and simplification of trade regulations. (International Trade Centre 2015, World Bank and World Interventions encouraging cross overs to male-dominated Trade Organization 2020). Multidimensional, country-level sectors, which are typically less protected and more approaches that address the multiple supply and demand profitable, and access to trade finance can also make constraints women entrepreneurs face in accessing finance women-led businesses more likely to become exporters. and markets might be required (see Box 5). More evidence on the effects of these policies is crucial since the literature finds a strong correlation between Women entrepreneurs are more likely to lack information exporting and increases in productivity (Verhoogen 2022). about tastes, preferences, and price sensitivity of foreign Furthermore, if a lack of demand for their products is a customers (Campos et al. 2019), which could be linked to binding constraint for women entrepreneurs (as shown limited learning due to smaller access to networks. They in Ghana by Hardy and Kagy 2020), interventions on skills are also more likely to see customs and trade regulations and capital might not be effective. Rather, interventions as major constraints, and since their businesses are smaller, that help women access new markets (e.g., crossing over to they are more affected by non-tariff measures (International tradeable industries, exporting, using digital technology to Trade Centre 2015). Possible interventions, yet to be sell online, or accessing procurement) might be a priority. BOX 5. MULTIDIMENSIONAL PROJECTS PROMOTING WOMEN ENTREPRENEURS’ ACCESS TO FINANCE, MARKETS, AND NETWORKS With the support of We-Fi, gender and sector specialists from the World Bank Finance, Competitiveness and Innovation (FCI), the Development Economics Vice Presidency (DEC), the Gender Innovation Labs, and IFC are testing new ways to address multiple constraints faced by women entrepreneurs in 20 countries across three regions. Each project develops new products to overcome supply and demand constraints that women entrepreneurs face in accessing finance and markets. These are supported by complementary reform and technical assistance activities to promote sex-disaggregated data collection and analysis, and to create entrepreneurship ecosystems for women’s businesses to grow and succeed. The projects work with public and private sector partners and leverage country portfolios to promote inclusion of women in loan operations for scale. This multidimensional approach was implemented in Mozambique (P168391), where the government, financial institutions, non-governmental organizations, academia, and business associations partnered to expand access to markets and finance for women-led firms. Activities included social gender training and coaching, encouragement to cross over to male-dominated sectors, digital training, acceleration programs, an online movable collateral registry, and the design of financial products targeted to women. In the Middle East and North Africa, an e-commerce initiative (P168392) is advancing women-led firms’ integration into e-commerce through country-specific reforms, advisory and capacity-building activities and hands-on coaching. In Pakistan, an early-stage finance platform (P168388) includes regulatory reforms, data collection, training for accelerators and incubators, training for women entrepreneurs, and the creation of a network of investors. Increasing access to public and private procurement. gender gaps on mobile phone ownership and access Some estimates indicate that women-led firms earn less to the Internet, email accounts, and business websites. than 2 percent of purchases by large corporations and Second, women entrepreneurs have lower levels of digital governments (Vazquez and Frankel 2017). An ongoing study skills, with skill upgrading limited by time and mobility by IFC’s Sourcing2Equal Program finds that a significant constraints (Campos et al. 2019).34 share of large corporations do not collect sex-disaggregated data on procurement, which is usually the first step in There is still a scarcity of causal evidence on the effects of designing corporate supplier diversity programs. Initiatives digital skills training for women entrepreneurs. The IFC’s in several countries aim to connect women entrepreneurs Digital2Equal Initiative works with technology companies to market opportunities through corporate procurement in the online marketplace to offer opportunities for women (see Box 6). However, evidence is not available on the entrepreneurs on digital platforms. Business-to-business effectiveness of such programs or how best to integrate distribution platforms can help women entrepreneurs women-led businesses into corporate value chains. connect to corporate manufacturers and improve their Some studies indicate that when public procurement has integration into corporate value chains.35 Additional open procedures with clear guidelines and streamlined evidence is required on how to encourage women application processes, women-led firms are more likely to entrepreneurs to join these platforms and on the effects apply and win contracts (Siegrist 2022). A training program of training designed to help women better navigate and on how to win large contracts showed positive effects on use these platforms. For example, Jin and Sun (2020) find small business performance in Liberia, but effects were not a program in China that trained over 2 million new sellers disaggregated by gender (Hjort et al. 2020). on a large e-commerce platform had small positive effects on revenues for both men and women, and women sellers Increasing access to digital platforms and e-commerce.32 were less likely to participate in the training. Finally, recent The growing role of services in the global economy and research warns that simply bringing many firms onto trade creates new opportunities for women to reap the e-commerce platforms may not be sufficient to foster their rewards of trade (World Bank and World Trade Organization growth due to large demand-side frictions. Policies, such 2020). However, women entrepreneurs face a series of as the creation of premium market segments or focusing constraints that prevents them from benefitting from on promising newcomers, might be necessary to improve e-commerce. Women-led firms lag behind in the adoption market efficiency (Bai et al. 2021). of new digital technologies.33 First, there are significant 32 For more details, see Aranda and Qasim (2023). 33 See Verhoogen (2022) for a non-gendered survey of possible factors constraining the uptake of new and traditional technologies. 34 For example, a survey with informal retailers on a digital platform in Egypt shows that, compared to men retailers, women retailers are less likely to know how to use the mobile application and are more likely to end up with stock-outs because of not tracking inventory (Mignano and Kipnis 2022). 35 IFC (2022) describes the experience of digital business-to-business distribution platforms in Nigeria, Egypt, and the Philippines. BOX 6. FOSTERING ACCESS TO PRIVATE AND PUBLIC SECTOR PROCUREMENT FOR WOMEN ENTREPRENEURS IFC’s Sourcing2Equal (P603523) is a global program launched in 2019 in partnership with We-Fi and the Government of Norway. It seeks to connect WSMEs to new market opportunities via corporate procurement. It involves three main activities: market research and case studies on the business case for buyers to increase their purchases from WSMEs, support for at least 50 large companies to adopt policies and practices that facilitate WSMEs’ access to corporate procurement contracts, and support to 5,000 WSMEs to meet corporate procurement requirements through capacity building solutions, networking opportunities with corporate buyers, and connections to supply chain finance solutions. Operations are underway in several countries, including Sourcing2Equal Kenya, Mexico2Equal, Increasing WSME Access to Markets and Finance in Mozambique, and Nigeria2Equal. Corporate Connect: Strengthening Market Access for Women Business Owners in Bangladesh (P168387) is a project launched in 2017 in partnership with We-Fi, with implementation support from WEConnect International and in collaboration with Bangladesh North South University and SME Foundation. The program aims to enhance the ecosystem for supplier diversity and to create a sustainable environment for supporting gender-inclusive sourcing in Bangladesh. The project aims to train over 700 women to be supplier-ready, work with at least 40 large companies to enhance their supplier diversity efforts, and register at least 900 women in the national supplier database. The Connecting National Procurement Needs with Women-owned SMEs in Senegal project (P168394) is supported by We-Fi aims to catalyze WSMEs’ access to public procurement. Launched in 2019, the project has promoted regulatory reforms to integrate gender dimensions into public procurement. It has provided technical assistance to the Senegalese public procurement authority in partnership with UN Women, with the goal of earmarking 15 percent of public procurement contracts for women and young people. It has supported the development and approval of two Development Policy Operations designed to increase women’s access to public procurement. It has also provided technical and behavioral capacity building to WSMEs and civil servants. INTERVENTIONS THAT ADDRESS CONTEXTUAL CONSTRAINTS According to the 2022 World Bank’s Women Business and customary laws that discriminate against women (e.g., the Law (WBL) dataset, in 104 out of 190 economies, women Campos et al. 2019 in Africa). These informal norms can face at least one legal constraint that prevents them from also affect women’s aspirations and the way they perceive running a business in the same way as men. Significant their own abilities. Interventions involving husbands and improvement over the last 50 years have led to most adolescents that encourage them to think differently about economies allowing women to sign contracts, register a the role of women show promise in promoting women’s business, and open a bank account in the same way as men. participation in the labor force,39 and could potentially have However, only 45 percent of economies prohibit gender effects on fostering crossovers to male-dominated sectors. discrimination in access to credit.36 Furthermore, socio- Connecting women entrepreneurs with other women, role cultural factors linked to restricted gender norms are still models, or mentors and information sharing through media pervasive in some regions and hinder the implementation campaigns or school-based programs can also be effective of laws (see Box 7). at changing aspirations (Jayachandran 2021b, see Box 7). Causal evidence on the effects of these interventions on One crucial gender norm is about the division of time for the performance of women-led businesses is still lacking. household activities. Women are overburdened by care responsibilities and domestic work, limiting their ability to Child and elder care programs.40 There is emerging work more hours in their business. This can explain part of evidence that subsidized day care can relax women’s time the gender gap in profits (World Bank 2021). The prevalence constraints and foster income-generating activities (Evans of gender-based violence (GBV) may also affect women’s et al. 2021, Halim et al. 2021). Experimental work in Uganda choice of business sector, location, and networking indicates that access to childcare can enable mothers to activities. Promising interventions include law reforms, be more productive at work, generating higher revenues information and discussion around informal norms, and even when working the same number of hours (Bjorvatn child and elder care. More causal evidence is needed about et al. 2022, Delecourt and Fitzpatrick 2021). Location, costs, each of these interventions. and hours of childcare services, in addition to norms around the acceptability of childcare, are critical factors Changing gender-biased laws.37 There is emerging for their effectiveness. Quasi-experimental evidence from evidence that gender-biased laws correlate negatively Indonesia indicates that an expansion of pre-schools had with women’s employment and entrepreneurship (WBL significant effects on plant-level total factor productivity by 2022, Adnane 2021, Hyland et al. 2021, Islam et al. 2017). increasing the labor supply of educated women, improving More quasi-experimental studies are needed to analyze the allocation of talent, and reducing turnover (Cali et al. the effects of changes in gender-biased laws on the 2022). More evidence is needed on the effects of childcare performance of women-led businesses. on the performance on women-led firms. Women entrepreneurs can be part of the solution by offering Interventions to shift informal gender norms.38 While innovative services and products on care. There is also a significant progress in reforming gender-biased laws has lack of evidence on the effects of elder care. occurred over time, the implementation and enforcement of new laws are constrained by informal social norms and 36 Based on the author’s own calculation using the WBL 2022 dataset. 37 For more details, see Hasan et al. (2023). 38 For more details see Muñoz et al. (2023). 39 See Halim et al. 2023. 40 For more details, see Ahmed et al. (2023) and Halim et al. (2023). See also Grantham and Somji (2022) on childcare solutions for women-led micro and small enterprises. Addressing gender-based violence.41 While there is no direct causal evidence on the effects of GBV on the performance of women-led business, the effects of GBV on women’s mental and physical health can have direct impact on their ability to work on the business. Moreover, the high prevalence of violence might discourage women from working outside the home, expanding their networks, hiring more workers, or entering male-dominated sectors. Business training programs specifically designed for women affected by trauma show promise for aspiring entrepreneurs in Colombia (Ashraf et al. 2021).42 Interventions that reduce GBV in non-entrepreneurial contexts could also be tested with women entrepreneurs.43 BOX 7. REFORMING AND ENFORCING GENDER-BIASED LAWS IN THE DRC The reform of the Family Code in the DRC is an example of what can be achieved by leveraging World Bank Group’s convening power and knowledge expertise. A coalition of government champions, private sector, civil society, and development partners came together, with Bank Group financial and technical support, to advocate for change to the Family Code. In 2013, the Ministries of Gender and Justice proposed revisions, which included removing most of the required marital authorizations to sign a contract, register a business, open a bank account, and other actions. Efforts of the coalition continued until the parliament adopted a new Family Code in 2016. Implementation of the new Family Code amendments has been uneven, especially in the most conservative regions of the country where customs and social norms are key barriers to the growth of women-led businesses (Campos et al. 2019, Braunmiller and Dry 2022). The PADMPE and TRANSFORME programs (see Box 2) include activities to disseminate the code (addressing potential information gaps) and to promote behavioral change that can lead to its implementation. Similar activities will also be included in the Burundi Economic Transformation for Jobs Project (P177688), which proposes leveraging digital platforms to launch social marketing campaigns encouraging the implementation of gender-friendly legislation. 41 For more details and other recommended interventions to reduce GBV, see Maruo et al. 2023 42 Relatedly, interventions offering cognitive behavioral therapy for women entrepreneurs reduced stress levels and improved mental health in Bangladesh and Pakistan, but without showing clear effects on business outcomes (Lopez Pena 2022, Saraf et al. 2019). 43 For example, engaging men in group discussions regarding GBV lowered reports of violence and increased decision making in Rwanda (Doyle et al. 2018). A youth empowerment program offering soft and technical skills training, sexual education, mentoring, and job- finding assistance during the COVID-19 lockdown increased girls’ earnings and decreased violence against girls in Bolivia (Gulesci et al. 2021). CONCLUSIONS Three cross-cutting recommendations emerge from Several promising interventions still need to be tested the interventions reviewed. First, interventions need to across the four areas of constraint examined in this brief: be better targeted to women entrepreneurs who could derive the highest returns on them. The development of 1. Access to skills and networks: Finding affordable efficient targeting tools is a non-trivial task, and more work ways to scale up business training (e.g., developing is required in this area. Second, interventions need to be a market for business providers, using technology designed to consider the multiple constraints faced by to deliver training, and targeting), offer high-quality women entrepreneurs. Data collection efforts could help personalized services (e.g., virtual coaches, group identify those constraints and approaches, such as the consulting, insourcing, and outsourcing), and funneling approach (see Box 1), could be used to test the support networking activities geared toward women most cost-effective composition of the package of support. entrepreneurs Third, the differential needs of women entrepreneur 2. Access to finance: Designing innovative finance must be considered during program implementation, products that support WSMEs (e.g., alternative credit such as childcare support and convenient locations. scoring, uncollateralized loans, insurance products, This evidence review yielded more “yellows” than “greens,” and the use of blended finance) and reducing gender which indicates there are several promising interventions biases among financial intermediaries being implemented around the world to support women 3. Access to markets and technology: Designing entrepreneurs that have not been rigorously evaluated. It interventions that encourage women to cross over is crucial to continue to support data collection efforts to male-dominated sectors, increase WSME access and, in particular, the collection of sex-disaggregated to public procurement and corporate value chains, data. Practitioners interested in understanding the effects foster trade readiness, and encourage the use of of their interventions on the performance of women- digital platforms to profit from e-commerce led firms should partner with researchers to rigorously evaluate innovative programs. More support is needed 4. Contextual constraints: Offering child and elder to enable practitioners at the design stage of projects to care, changing gender-biased laws, shifting gender identify key constraints, design innovative interventions, norms, and protecting women from GBV, including and systematically measure results by partnering with engaging men to provide a more supportive researchers to conduct impact evaluations.44 environment Analyzed separately, the following interventions show The World Bank Gender Group aims to coordinate efforts to effectiveness in improving the performance of women- raise awareness on the importance of supporting growth- led firms in more than one context: socio-emotional skills oriented women-led firms. This thematic note is just a first training, gender-oriented training, secure and convenient step to setting the agenda and engaging with implementing savings instruments, and large grants for winners of partners, including practitioners, researchers, organizations business plan competitions. Evidence was obtained of women entrepreneurs, and other stakeholders. Policies mainly with micro and small firms, so there is a need to that support women-led businesses can spur innovation, test how these instruments could be adapted to support productivity growth, and employment. They can play an larger women-led firms. More evidence is also needed on essential role in promoting green, resilient, and inclusive which types of interventions work for different segments development outcomes. of women entrepreneurs (e.g., micro/small versus medium size, growth oriented versus subsistence). 44 See Burga et al. 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