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Gender and Private Sector Development

Gender and Private Sector Development. What can be done and What we don’t know. Francisco Campos, Africa Region Gender Practice DIME FPD Workshop, Rio de Janeiro, 6-10 June 2011. Outline. Female entrepreneurship: the case of Africa Problems and potential explanations

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Gender and Private Sector Development

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  1. Gender andPrivate Sector Development What can be done and What we don’t know Francisco Campos, Africa Region Gender Practice DIME FPD Workshop, Rio de Janeiro, 6-10 June 2011

  2. Outline • Female entrepreneurship: the case of Africa • Problems and potential explanations • Importance of specific constraints • What can be done? • What should we learn?

  3. Female entrepreneurial participation is relatively high, particularly in Africa Share of entrepreneurs within the non-farm labor force Source: Data from Hallward-Driemeier et al. (2011), Expanding Opportunities for Women in Sub-Saharan Africa, World Bank; Author’s calculations

  4. However, most of female-headed enterprises in Africa are smaller than male-owned Employers within female entrepreneurs in Africa Relative size of enterprises (compared with mean size in sector) Source: Data from Hallward-Driemeier et al. (2011), Expanding Opportunities for Women in Sub-Saharan Africa, World Bank; Author’s calculations

  5. Female-owned businesses are less productive than male-owned Gender gap (female vs male) in productivity in Africa Women are more likely to have smaller informal enterprises and in traditional low value-added sectors. ** Gender gap in productivity * Gender gap accounting for sector Gender gap accounting for size of enterprise When in similar conditions, women-headed businesses can perform as well as male. Gender gap accounting for sector, size and investment ** significant at 5% * significant at 10% Source: Data from Hallward-Driemeier et al. (2011), Expanding Opportunities for Women in Sub-Saharan Africa, World Bank;

  6. Business constraints faced in particular by women-headed firms • Lower access to capital (finance and risk-sharing) • Lower access to other financial services • Less time to work – and to their business – due to higher housework and care responsibilities • More limited access to distribution networks • Less likely to build managerial and financial literacy skills Source: Hallward-Driemeier (2011), Finscope SME Surveys, Brown and Haddad (1995), Berniell and Sanchez (2011), Morris et al. (2006), Grief (1993), Banerjee and Duflo (2000), Rauch (2007)

  7. What can be done? Evidence about what should be done in Africa, although growing, is still small. More impact evaluations will help address this knowledge gap. Interventions that work for small scale enterprises will likely disproportionally help women-headed enterprises.

  8. 1. Access to capital Example: What can be done? In-kind grants (Ghana) Loans to top scorers of previously rejected borrowers (South Africa) What do we need to learn? How to efficiently screen entrepreneurs How to make microfinance effective (India, Philippines) How effective can large loans be in improving productivity of female-headed firms (Pakistan) How can access to risk-sharing schemes help women enter new sectors How effective are government matching grant schemes Monthly return on capital of a grant for female entrepreneurs in Ghana ** ** significant at 5% But: - Cash grants worked better for male entrepreneurs - No effects of in-kind (and cash) grants for women at subsistence level Source: Fafchamps et al.(2010), “When is capital enough to get female entrepreneurs growing? Evidence from a randomized experiment in Ghana”; Karlan and Zinman (2008); Banerjee et. al (2009); Karlan and Zinman (2010); Giné and Mansuri (2011); Berge et al. (2011)

  9. 2. Access to financial services • What can be done? Example: Effects on female self-employed of accessing a savings account in Kenya ** * • What do we need to learn? ** significant at 5% * significant at 10% But: - 40% of women in the treatment group didn’t make any transaction in the account within the first 6 months Savings account (Kenya, being replicated in other countries) Better still – especially in agri-businesses – commitment accounts (Philippines, Malawi) Does improving the knowledge about the benefits of a bank account lead to improvement in businesses’ performance Or should we focus on reducing the costs of accessing these accounts How to effectively separate household and business money Effects of mobile banking and other tools to increase banking reach Source: Dupas and Robinson (2009), “Savings Constraints and Microenterprise Development: Evidence from a Field Experiment in Kenya”; Ashraf et al. (2008); Brune et al. (forthcoming)

  10. 3. Time available to business/work • What can be done? Example: Effects of access to free childcare on women’s employment in Brazil ** • What do we need to learn? ** significant at 5% But: - Increase in monthly HH income due to mother’s employment was well below the monthly cost of the service per child Childcare? (Brazil) Is improving the returns of business activities – and letting women know about it – enough Does improving infrastructure services such as water allow for increased commitment to business activities Do flexible working arrangements help Source: Barros et al. (2011), “The impact of access to free childcare on women’s labor market outcomes: Evidence from a randomized trial in low-income neighborhoods of Rio de Janeiro”; Heymann (2004); Attanasio and Vera-Hernandez (2004); Ilahi and Grimard (2001)

  11. 4. Access to distribution networks • What can be done? • What do we need to learn? Limited evidence on what can be done by gender of the entrepreneurs Do linkage programs work Can we overcome (gender) discrimination by improving information Can co-operation between suppliers (co-operatives, etc) be effective in expanding their market access

  12. 5. Access to management / financial literacy skills • What can be done? Example: Effects on profits of business training for existing female-owned firms in Sri Lanka ** • What do we need to learn? ** significant at 5% But: - Effects of additional value of cash grants do not seem to materialize for women interested in starting enterprises Management training for medium level enterprises (India) Rule-of-thumb training (Dominican Republic) What type of skills are constraining business development given the limited effects of general interventions to upgrade business and financial knowledge of entrepreneurs (Peru, Indonesia, Dominican Republic, Pakistan)? What characteristics of training programs are successful in upgrading female-headed businesses? Source: Mel et al. (2011), Business Training and Female Enterprise Start-up and Growth in Sri Lanka; Bloom et al. (2009); Karlan and Valdivia (2010); Cole et al. (2009); Drexler et al. (2011); Giné and Mansuri (2011); Berge et al. (2011)

  13. Take-aways With impact evaluations, we can learn how to address a number of these challenges that women seem to face while growing their businesses. By comparing two or more interventions within an impact evaluation study, we are able to rank the importance of specific constraints. But to separate the effects by gender of the business owner, we need large samples.

  14. Gender andPrivate Sector Development What can be done and What we don’t know Francisco Campos, Africa Region Gender Practice DIME FPD Workshop, Rio de Janeiro, 6-10 June 2011

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