On June 27, the Department of State joins the global community in recognizing Micro, Small, and Medium-sized Enterprises (MSMEs) Day by celebrating the contributions of women-owned MSMEs to the global economy. Women entrepreneurs are a growing market force, serving as a critical source of innovation and job creation and fueling economic growth. Despite this, women-owned businesses do not have equal access to the capital – or the networks – needed to stabilize or expand.
The COVID-19 pandemic exacerbated these social and economic inequities, leaving devastating and disproportionate impacts on women-owned MSMEs. In a recent survey of women entrepreneurs in low-and middle-income countries, more than 80 percent of respondents indicated the pandemic has negatively impacted their business, and nearly four in ten noted they will or may have to close their business due to these circumstances. Recent research from the World Bank found that women-owned businesses were nearly six percent more likely to close during the pandemic compared to those owned by male counterparts.
The Secretary’s Office of Global Women’s Issues (S/GWI) held consultations with partners and women leaders early in the pandemic, which revealed common business challenges women-owned MSMEs were facing as a result of COVID-19, including: a liquidity crunch, lower demand for products or services, uncertain markets, limited digital literacy, and need for technical assistance or business skills development. Despite these challenges, throughout the pandemic, we have seen women entrepreneurs and business owners overcome these through their resilience, ingenuity, and drive.
In alignment with Biden-Harris Administration prioritization of gender equity and equality, S/GWI supports diplomatic engagement and assistance programs that advance economic empowerment for women, in all their diversity. One such program is Women and Girls Empowered (WAGE) , which provides financial support to women entrepreneurs and works with local microfinance institutions (MFIs) and civil society organizations to reduce practical barriers to women’s economic empowerment.
To address critical financing gaps for women-owned MSMEs, WAGE supports MFIs in El Salvador and Honduras to provide women entrepreneurs of all backgrounds with loans and services, recognizing the multiple and intersecting forms of discrimination and barriers that women and gender-diverse persons from marginalized communities frequently face. As part of this effort, WAGE works with MFIs and their staff to promote behavioral change, revise internal policies, and improve gender-responsive operations to mitigate unintended consequences or harm, such as gender-based violence, that can result from a woman’s increased access to financing.
Women borrowers often operate their businesses from home, where they care for family members. Many have had to fully or partially close their businesses during the pandemic. Loans help them buy supplies and pay wages so they can build back and expand their businesses. To date, WAGE has unlocked nearly $5 million in loans through private-sector matching for 9,600+ women entrepreneurs, many of whom have been adversely impacted due to the COVID-19 pandemic.
Empowering women entrepreneurs is a multi-sector effort – public and private entities must come together with non-profits and academia to advance women’s economic empowerment, particularly as the world continues to respond to the COVID-19 pandemic and its second-order impacts. Through the Providing Opportunities for Women’s Economic Rise (POWER) initiative, the State Department leverages diplomatic resources to promote women in business, and works with the private sector to establish professional networks and business environments focused on promoting women’s economic empowerment. Similarly, through online training and in-person mentoring and education, the Department’s Academy for Women Entrepreneurs (AWE) provides female entrepreneurs with the knowledge, networks, and access needed to start and scale successful businesses. The program harnesses the power of private-public partnerships and alumni networks to help women in their entrepreneurial journey and contribute to their local economies and communities.
This Administration recognizes that the interlinkages between economic security and empowerment and women’s and girls’ full lives. The President’s Emergency Plan for AIDS Relief (PEPFAR) DREAMS (Determined, Resilient, Empowered, AIDS-free, Mentored, and Safe) Partnership addresses intersecting health and economic disparities among young women by fostering environments that enable young women’s participation in the economic sector. DREAMS interventions facilitate access to business and social networks that support sustainability as participants learn to navigate complex systems, develop negotiation and entrepreneurial skills, and launch their own businesses.
As we work to build back better from the COVID-19 pandemic, it is imperative that our efforts be gender-responsive, address economic and social inequities, and bring together stakeholders – across all sectors – to empower women-owned MSMEs, support economic recovery, and celebrate the power of women to adapt, persevere, and overcome today’s most significant challenges.
About the Author: Linsey Armstrong serves as a Grants & Outreach Analyst in the Secretary’s Office of Global Women’s Issues at the U.S. Department of State.