Women Mean Business

In the battle of sexes, men may seem to have the upper hand. More men than women hold positions of leadership. And when both men and women are in the same position at work, men typically earn more.

But there’s one area where women may prove to have an edge – and it’s probably one you haven’t heard of. When women have the opportunity to run their own businesses, even in the developing world, many of them are more profitable and efficient than those run by men.

This isn’t a surprise to me. For over a decade at FINCA, I’ve seen firsthand how poor women toil day and night to provide for their families and reinvest their remaining profits into their small businesses. At FINCA, we provide financial services to millions of low-income entrepreneurs – especially women – so that they can grow their businesses, increase their assets and improve their lives.

By targeting female entrepreneurs, we are not just helping the women themselves, but also their families, communities and economies to flourish. It is a sentiment that has been echoed in recent studies which have shown that by investing in women and increasing their involvement in the workplace globally, the world’s GDP could grow by $12 trillion.

This idea that women are more efficient and profitable business owners was recently tested through a small IFC study on FINCA’s banking agents. In 2012, FINCA launched agency banking in the Democratic Republic of Congo. Agency banking utilizes a network of local merchants and shopkeepers, in areas where FINCA usually doesn’t have a bank branch, to provide basic banking services. The agents are equipped with POS machines, a portable device that connects to bank accounts through biometric fingerprints. The IFC study sought to determine whether there was any difference between female and male banking agents in two areas: as business owners and as banking agents.

Surveying over 140 women, the researchers found that despite having overall lower cost products and services to sell, the female business owners make higher quantity sales and are able to bring in 16% higher net weekly profits than men.  The women were also more likely to be in low-income areas, placing even more significance on the fact that they were able to bring in more profit with a lower income clientele.

“Women seem to be more entrepreneurial,” the report argues, “since they put more money back into their business inventory rather than keeping it on a bank account which yields little interest.”

As agents, the report writes, “women do a better, more efficient job compared to men.  Not only do female agents transfer higher volumes per FINCA transaction, they also, on average, report 12% more FINCA transactions per month than male agents.”

These statistical “wins” are crucial to show that women can be trusted to run successful, efficient, productive businesses. But they also underlie an important contradiction with women in business. Despite that fact that women are equally or even more proficient as business owners, we do face greater barriers. In the Democratic Republic of Congo, these challenges are pronounced. Married women, for example, need spousal permission to have a job, sign a contract or open a bank account. When women do become business owners, access to credit can be a major roadblock. In fact, the average credit for men-owned businesses is 29% higher than female-owned businesses.

Opportunity, then, becomes the catalyst for change. The thousands of FINCA female agents on the ground in the DRC not only prove how well women can run businesses well but that they can play a necessary and important role in helping other women gain an upper hand.