Bridging the Finance Gap for Women Entrepreneurs

3. Fostering conducive cultural attitudes

Abstract

Drawing attention to the societal norms and cultural attitudes that result in women entrepreneurs’ lack of societal legitimacy is important in understanding the contextual barriers influencing their access to financial resources. The chapter discusses these barriers and highlights strategies that policy can adopt in addressing these issues and promoting greater social and financial inclusion for women entrepreneurs.

The importance of the socio-cultural context

Entrepreneurship is both a social and economic phenomenon and as such, the context within which it occurs matters (Achtenhagen and Welter, 2011[1]). There is ample research highlighting the consistent impact of contextual factors such as religion, culture and social norms on women entrepreneurs’ choices and behaviours (Santos, Roomi and Liñán, 2016[2]; De Vita, Mari and Poggesi, 2014[3]). In many societies, traditional roles of men as “breadwinners” and women as the “main carers” still persist, and women entrepreneurs often have to go against these norms to engage in entrepreneurial activities. Addressing barriers impacting women’s access to financial resources (Roy and Patro, 2022[4]) therefore requires holistic approaches that aim at changing societal perceptions and cultural attitudes that have a negative impact on women’s participation in entrepreneurial activities. The policy insight notes from China, Iran, Malaysia and Uganda highlight the impact of traditional gender roles and cultural practices that often result in women entrepreneurs being perceived as having limited societal legitimacy (Owalla and Al Ghafri, 2020[5]). This lack of legitimacy has a detrimental impact on women’s access to much needed financial and social capital within entrepreneurial ecosystems.

The role of public policy

Changing prevalent societal norms and cultural attitudes is not an easy task and requires long-term and sustained commitment. Public policy can have a positive impact in changing societal perceptions and attitudes by addressing the broader societal obstacles to women’s participation in the labour market including through self-employment, such as addressing the gender pay gap, tackling suboptimal access to financial education, and the bias of responsibility related to unpaid domestic tasks. Further, laws that address existing inequalities, such as the right to own or inherit property and land, are key to ensuring women have access to collateral when seeking loans from lending institutions.

Public policy can create a more conducive business environment for women by further highlighting their positive contribution to both social and economic growth. This includes promoting positive role models who can inspire potential women entrepreneurs, while changing the broader societal perception of women entrepreneurs’ legitimacy with stakeholders within the ecosystem. Policy initiatives that promote more women in decision-making roles in the financial system can also contribute to showcase sound women businesses as valid recipients of investment. Policy initiatives also need to acknowledge and pay greater attention to the specific gender-related barriers that women entrepreneurs face in accessing much needed investment for their ventures.

Establishing platforms where women can build networks and collaborate with peers and mentors is also an important step to enabling their access to much needed resources for success. Women often face challenges in accessing mainstream networks (Brush et al., 2019[6]) and are thus excluded from accessing vital information and resources. These platforms can also expand women’s access to educational, cultural and technological resources. While women-dedicated platforms can enable women to challenge existing gendered structures in the entrepreneurial ecosystem (Roos, 2019[7]) there is a need to bridge these platforms with mainstream networks to ensure women entrepreneurs have sufficient economic, social and cultural capital to establish their credibility and achieve financial inclusion (McAdam, Harrison and Leitch, 2019[8]).

Lessons from the policy cases

Five country-level policy insight notes set out later in this volume have an important focus on socio-cultural challenges faced by women entrepreneurs. They highlight that strategies are needed to address these barriers, including addressing broader societal gender norms and their influence on individual entrepreneurship decisions Czechia, Iran and Uganda) and the role of institutions (Malaysia). The notes also call for more specific targeting of different segments of women entrepreneurs (China). Together the notes underline the following lessons for public policy:

1. Address broader structural inequalities, such as unpaid work and unequal access to land and property ownership rights. This will provide a more conducive environment for women to not only engage in entrepreneurial activities but also access financial resources vital for their businesses.

2. Increase public awareness of the positive social and economic impact of women’s participation in the labour market, including entrepreneurship as well as employment generally. This could be achieved through campaigns addressing issues of gender equality and through the engagement of community leaders and influencers advocating for women entrepreneurs. Portraying women entrepreneurs as societal role models, for example through education and promotional campaigns, can also have a positive impact on potential women entrepreneurs.

3. Pay greater attention to the gender-specific barriers and challenges that women entrepreneurs face and establish platforms that can provide networking opportunities as well as access to educational and digital literacy programmes with a specific focus on disadvantaged women entrepreneurs and those located in rural areas. Facilitating access to innovative funding solutions and digital financial services is also important.

References

[1] Achtenhagen, L. and F. Welter (2011), “‘Surfing on the ironing board’ – the representation of women’s entrepreneurship in German newspapers”, Entrepreneurship & Regional Development, Vol. 23/9-10, pp. 763-786, https://doi.org/10.1080/08985626.2010.520338.

[6] Brush, C. et al. (2019), “A gendered look at entrepreneurship ecosystems”, Small Business Economics, Vol. 53/2, pp. 393-408, https://doi.org/10.1007/s11187-018-9992-9.

[3] De Vita, L., M. Mari and S. Poggesi (2014), “Women entrepreneurs in and from developing countries: Evidences from the literature”, European Management Journal, Vol. 32/3, pp. 451-460, https://doi.org/10.1016/j.emj.2013.07.009.

[8] McAdam, M., R. Harrison and C. Leitch (2019), “Stories from the field: women’s networking as gender capital in entrepreneurial ecosystems”, Small Business Economics, Vol. 53/2, pp. 459-474, https://doi.org/10.1007/s11187-018-9995-6.

[5] Owalla, B. and A. Al Ghafri (2020), ““Bitten by the entrepreneur bug” – critiquing discourses on women owner-managers/entrepreneurs in the Kenyan and Omani newspapers”, Gender in Management: An International Journal, Vol. 35/6, pp. 529-551, https://doi.org/10.1108/GM-01-2020-0019.

[7] Roos, A. (2019), “Embeddedness in context: understanding gender in a female entrepreneurship network”, Entrepreneurship & Regional Development, Vol. 31/3-4, pp. 279-292, https://doi.org/10.1080/08985626.2018.1551793.

[4] Roy, P. and B. Patro (2022), “Financial Inclusion of Women and Gender Gap in Access to Finance: A Systematic Literature Review”, Vision: The Journal of Business Perspective, Vol. 26/3, pp. 282-299, https://doi.org/10.1177/09722629221104205.

[2] Santos, F., M. Roomi and F. Liñán (2016), “About Gender Differences and the Social Environment in the Development of Entrepreneurial Intentions”, Journal of Small Business Management, Vol. 54/1, pp. 49-66, https://doi.org/10.1111/jsbm.12129.