Gender Bias Continues to Stifle Women’s Empowerment

As we commemorate International Women’s Day, it’s imperative to reflect on the challenges women confront in their pursuit of economic empowerment and social equality. Despite progress in gender parity initiatives, women entrepreneurs around the world continue to encounter systemic barriers that hinder their ability to break out of poverty. For example, women face gender bias when accessing finance for their small businesses. This reality highlights the importance of women’s empowerment.

Since its establishment in 1984, women’s empowerment has been central to FINCA’s mission. Early on, we knew that investing in women entrepreneurs is essential in the fight against global poverty. Our research in the last few years sheds light on the pervasive gender biases that women around the world encounter in their fight against poverty. It also underscores the urgent need for targeted solutions to address disparities, many of which result from gender bias. In this blog, we delve into five findings of our research exploring challenges facing women in the Democratic Republic of Congo, Uganda, Jordan, and other countries.

Gender Bias Causes More Unpaid Labor for Women

A 2019 FINCA survey of our clients in the Democratic Republic of Congo (DRC) shows that the burden of unpaid work puts women at a competitive disadvantage.

Before venturing out of the house and into business, women in the DRC have other tasks to accomplish. Typically, they have many domestic obligations, including childcare, cleaning, gardening, fetching water, and cooking. These activities, valued between 10 to 40 percent of GDP, occupy more than four hours of a woman’s day, compared with 1.5 hours for men. By the time women get a chance to compete in business, men’s greater freedom gives them a head start.

Gender bias leads to more unpaid work for women compared to men putting them at a competitive disadvantage.

Our survey in the DRC found that men dominate sectors like wholesale trade and manufacturing. On the other hand, women compete with each other in small trading businesses with lower profits. This makes it harder for women in the DRC to break the cycle of poverty in their lives.

Women’s Businesses are More Tentative and Less Profitable

A study of FINCA Jordan women clients showed they are more likely to be married, living in a male-headed household, and earning a supplementary income. Published on FinDev Gateway in September 2019, the study highlights the younger average age of Jordan women clients, at 25 years old, versus a global average of 40.

Married women earning supplemental income are less willing to take risks. As a result, their path to growth is less clear. Our data shows that women’s enterprises in Jordan are seasonal, with a mere 5% rate of formal registration compared with 53% for men. Therefore, women’s businesses in Jordan tend to be more tentative and less profitable than men-owned businesses.

According to the Global Entrepreneurship Monitor, Jordanian businesswomen struggle against “higher levels of domestic responsibilities, lack of female role models…and a culturally-induced lack of assertiveness and confidence in their ability to succeed in business.”

Women Have Less Information on Financial Products Compared to Men

Another study conducted between January and September 2020 in the Democratic Republic of Congo (DRC) demonstrated that women are less aware of financial products compared to men. Factors such as higher education levels or living in an urban area correlate with a better awareness of financial products. However, the gender gap remains significant with 22% of surveyed women unable to name more than two financial products compared to 14% of men.

The study found that limited awareness is one of the factors that impede a woman’s ability to choose suitable financial products. Overall, around 34% of women and 21% of men reported having difficulties selecting the right financial products. Among women with limited awareness, lower levels of education further expands the gap between those who find the right financial products with difficulty and those who do so with ease. 

Financial Coaching Helps Women Save

In a FINCA survey of our women clients in Uganda, they explained that coaching encouraged them to set aside small savings that can protect against an uncertain future. The 2021 study showed that the effect of financial coaching on savings transactions was more statistically conclusive for women than for men.   

Further qualitative analysis demonstrates that businesswomen in Uganda tend to be more risk-averse. Low-income women are mostly oriented towards survival and mitigation and they are motivated to operate in groups to offset risk. Social gender roles sometimes take priority over women’s aspirations. Often, gender bias drives societal expectations of a businesswoman in Uganda. She is expected to be a “good wife” by, for example, sharing her earnings with her entire family. Furthermore, women are sometimes prohibited from inheriting property and have to cope with the burden of domestic responsibilities and duties. The video below provides an in-depth overview of the research findings.

The societal and economic barriers motivate women in Uganda to access finance in groups. Consequently, the study recommends that financial service providers mimic some features of informal saving groups and add more bespoke features that are attractive to businesswomen.

Women Use Savings to Pay for Basic Needs During an Emergency

A FINCA survey data covering 11,000 households in 13 countries, finds that women are more likely to spend their savings to cover emergency costs. On the other hand, men are more likely to borrow money to buy immediate necessities. The study collected data between 2020 and 2021 to explore the impact of COVID on household finances.

More than 80% of FINCA’s clients in 13 countries lost income because of the pandemic. These clients resorted to various coping strategies to compensate for their lost income. These coping strategies include spending savings, taking out loans, or selling property.  Around 58% of FINCA clients in this survey leaned on their savings to supplement lost income. Educated women represent roughly 81% of this group, which supports the fact that women are less likely to take financial risks. In emergencies, women’s behavior is more risk averse out of necessity. This is partly because they don’t have access to credit and therefore must rely on savings. 

Despite these challenges, FINCA believes the transformative power of financial inclusion can be realized through women’s business activities. Many businesswomen become leaders in their communities because they enhance their independence, social status, and income. By enabling women to continuously contribute to their family’s material aspirations, FINCA hopes to strengthen their status in the household and overcome gender bias. These effects are amplified by financial coaching and the digitization of financial services, which offers women greater privacy and control over their resources.