Female Business Owners
The ability to own and run a business is the dream of many people around the world, and something that, in the past, men have predominantly enjoyed. Women, however, are catching up in some places and today, start and manage more businesses than ever in history. Because of cultural and economic challenges faced by entrepreneurial women, many organizations are dedicated to helping them be successful and overcome those hurdles. Some regions of the world have higher incidence of women business owners than others. This article takes a look at the numbers around the world.
Regions with the Highest Rates of Female Business Ownership
The Caribbean region has the highest percentage of women-owned businesses at 44.4%. Women in this area have made significant advances in recent years, not just in owning business but in management and government as well. One of the factors attributing to this growth is that women are not attaining higher levels of education than previously and surpassing men in college graduate numbers.
The East Asian and Pacific region reports 42.8% of all businesses are owned by women there. Some experts believe this increase has been due to a global economic crisis which left many men and women unemployed. Women in underdeveloped countries tend to cite “necessity” as their reason for entrepreneurial endeavors while men cite “opportunity”.
The number 3 region for women entrepreneurs today is in Latin America, where 39.8% of businesses are owned by women. Since this region has high numbers of informal and micro-enterprises that women are more likely to manage, it stands to reason that they make up a large portion of business owners. This region has experienced a significant increase in women joining the workforce over the last 2 decades and their earnings have decreased the numbers of families living in extreme poverty.
Regions with Low Percentages of Female Business Owners
The percentages of women-owned businesses begin to decrease as we move further down the list, and in Central Europe and the Balkan states their proportion comprises 37.1% of all businesses, followed by Sub-Saharan Africa (36.1%), Western Europe (34.4%), Eastern Europe and Central Asia (32.5%), the Middle East (23.2%), North Africa and the Maghreb (20.7%), and South Asia (18.4%). While these numbers are significantly lower, the reasons behind women starting businesses in these regions are similar to those previously discussed. They are, however, confronted with steeper hurdles that are rooted deep within unchanging cultural beliefs of gender inequality. Women typically have a greater fear of failure than men, particularly in the regions listed in this section. Society has taught that fear over time and it often prevents women from attempting their own business. Another common cultural belief that keeps women out of owning businesses is the idea that women should stay at home and raise families. Sometimes women are not permitted to leave the house without a male companion which also hinders their ability to run businesses.
Constraints on Women
Aside from the previously mentioned cultural beliefs that prevent women from becoming entrepreneurs, other factors contribute to low levels of women-owned businesses as well. In many places, women lack of access to financing whether that be because their husbands do not give them permission or because they do not have collateral to offer lenders. This may force women into informal borrowing schemes that will carry extremely high interest rates and risk. Historically, women have also been prevented from receiving equal education as men, often times not being able to finish elementary levels of schooling. This has made such critical business opportunities as training, mentoring programs, and networks nearly impossible to obtain. Additionally, advancing the businesses that they do have is difficult in many countries because of a lack of technology and equipment.
What Do Women Need for Success in the Business Arena?
In order for female-owned businesses to succeed, they need increased access to formal credit and finance options. In addition, if governments would wish to see their economies benefit from increased female participation in business, policy initiatives and investments in public education will be necessary. Education that involves financial training and basic business management classes would help women overcome the many obstacles they have to business ownership, growth, and success.