Gender Bias Remains a Barrier to Achieving Women's Empowerment

Mar 08, 2024
Gender Bias Remains a Barrier to Achieving Women's Empowerment

As we commemorate International Women’s Day, it’s imperative to reflect on women’s challenges in pursuing 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 small business financing. 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 Results in Increased Unpaid Labor Burden 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. 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, making it harder for them 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, live in a male-headed household, and earn 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, making their path to growth 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’s 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 are Less Knowledgeable about 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 than men. Factors such as higher education levels or living in an urban area correlate with 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 factor that impedes a woman’s ability to choose suitable financial products. Around 34% of women and 21% of men reported difficulty selecting the right financial products. Among women with limited awareness, lower levels of education further expand the gap between those who find the right financial products with difficulty and those who do so easily. 

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 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 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 attractive to businesswomen.

Women Utilize Savings to Cover Basic Needs During an Emergency

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.  In this survey, around 58% of FINCA clients leaned on their savings to supplement lost income. Educated women represent roughly 81% of this group, supporting the idea that women are less likely to take financial risks. In emergencies, women’s behaviour is more risk-averse out of necessity. This is partly because they don’t have access to credit and, therefore, must rely on savings. 

FINCA believes the transformative power of financial inclusion can be realized through women’s business activities despite these challenges. Many businesswomen become community leaders because they enhance their independence, social status, and income. By enabling women to contribute continuously 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 digitizing financial services, which offer women greater privacy and control over their resources.