Since the financial crisis of 2008, women are finding it harder and harder to find jobs.
In Europe and Central Asia, women have better access to employment than in many other parts in the word. However, the women’s workforce in these countries is still 25 percent smaller than that of men, and crisis-driven cuts in the job market have restricted women’s access to jobs still further, especially in rural areas.
In Turkey, for example, 70 percent of men have access to jobs, compared to just 24 percent of women (See data on Women’s access to economic resources).
As countries moved to a market economy, entrepreneurship became a new source of income for both men and women, and small enterprises became a source of job creation, contributing to economic growth.
In central Asian countries, the micro, small, and medium enterprise share of total employment in 2010 ranged from 25 percent in Tajikistan to 60 percent in Turkmenistan (See: Women’s economic empowerment, OSCE, 2010 (pdf)).
But the potential of female entrepreneurs remains unfulfilled; on average, women own just 38 percent of all businesses in the region. In Montenegro, women account for less than 10 percent of all entrepreneurs.
According to a World Bank analysis, women’s businesses in the region tend to be smaller in terms of operation and are less efficient in terms of productivity.
This gap emerges partly because the majority of women’s business activities tend to focus on lower-revenue industries, such as agriculture, retail, wholesale trade, and textiles, which traditionally generate less capital, serve only local markets, and are less competitive.
Also, entrepreneurship is still not widely perceived as a viable career option for women, and women typically have had limited access to the education and experience needed to develop adequate business skills.
The major obstacle that all female entrepreneurs in the region face is the lack of access to, and high cost of, credit.
This lack of access to finances not only hinders the growth of women’s businesses, but also slows the overall economic development of the region.
Another study found that women’s income produces a multiplier effect on society, given that income in the hands of women is more likely to be invested in their families and communities.
Closing of the gender gap in entrepreneurship will contribute to the development of sustainable economies and inclusive societies—the ultimate goals of UNDP’s development initiatives.
Crowdfunding—funding a project by raising small amounts from a large number of people, typically via the Internet—could be the way forward for female entrepreneurs.
This novel method of fundraising provides entrepreneurs the opportunity to get their hands on the resources they need to start a new business or to stay in business when times get tough.
Not only could crowdfunding allow female entrepreneurs to start a business, but it would also provide them the opportunity to showcase their products to the entire world.
Each of these platforms is based on the same concept: a project leader or business owner creates a profile and explains their idea to attract potential funders. Once the project or business is launched, investors around the world can follow its progress and choose to reinvest at any time.
There are a few key reasons why crowdfunding is such a great option for female entrepreneurs:
- With investors coming from all corners of the world, businesses would be supported free of the local stereotyping and constraints that women typically face when establishing a business.
- The online environment gives women the opportunities to overcome the restrictions of the local market and to develop their business skills.
- Women would no longer need to rely on the local financial institutions that often discriminate against them due to insolvency or lack of property guarantee (since the majority of properties are still inherited and owned by men).
- Crowdfunding platforms have proven to be effective tools of empowerment for women since they allow women to become active participants in the business world. And thanks to their visibility online, female entrepreneurs can inspire other women who will read of their business successes.
Crowdfunding has also proven powerful in allowing entrepreneurs to continue producing during times of recession.
In the long run, this is a huge gain for business sustainability; fewer businesses will go out of business or need to rely on external aid.
What do you think about the potential of crowdfunding? We’d love to hear what you think!