PSD Blog - The World Bank Group

The smart economics of educated women

Editor's Note: Jennifer Yip is a consultant for the World Bank Group's Doing Business team.

At an age when mothers admonish their children to finish their brussels sprouts, my mother issued warnings about the importance of getting a PhD if I wanted to gain the respect of my future husband. Those warnings were followed by the oft-repeated reminder that I should "marry well, so you don’t have to work if you don’t want to."

Twenty years and a couple of degrees later I’ve often wondered how those two pieces of advice go together. What is the point of getting an advanced degree if I eventually decide not to work? 

Do banks discriminate against women entrepreneurs?

Some studies such as Carter and Shaw (2006) show that the share of women among the self-employed is disproportionately small, that they run smaller businesses, that they are less likely to rely on venture capital and that their firms have lower debt-equity ratios. These differences in financing patterns could be due to two sorts of factors. First, bankers’ decisions about loan applications may differ across men and women whose businesses are similar in terms of solvency and creditworthiness (supply-side discrimination, associated with the work of economist Gary Becker). Second, male and female entrepreneurs may differ in terms of risk attitude, education, personal wealth, experience, etc., known as statistical discrimination. The challenge is to find out which of these (or both) factors hold.

A recent study by Muravyev et al. (forthcoming) attempts to do precisely this. The study is based on firm level data from the Business Environment and Enterprise Performance Survey (BEEPS, 2005), conducted in Europe and Central Asia by the World Bank’s Enterprise Surveys and EBRD.

Equal Pay Day

Today (April 28) is Equal Pay Day in the United States. The date of Equal Pay Day marks the additional amount of time an average woman in the U.S. must work to match the earnings of an average male worker from the previous year. Wait, think you just misread that? Then let me repeat it: to match the earnings of their male counterparts from 2008, women must work from January 2009 to April 2009.

What microfinance really needs: women's lib

I saw Muhammad Yunus speak a few years ago, and the thing that struck me most in his speech was his insistence on the power of microfinance to help increase the opportunities available to women. That's why the findings from a recent evaluation of microfinance in Sri Lanka in which female enterprises gained little from access to finance were troubling. A new study discussed in the most recent edition of the FPD Impact newsletter tries to explain why female-owned enterprises have such low returns to capital.

On speed-dating and sexism

For those of you who missed it, last week the World Bank held its biennial Financial and Private Sector Development Forum. One of the sessions was structured around the format of speed-dating. Instead of meeting prospective partners, however, participants learned about innovative projects and products. One of the presented products was something called the Doing Business Gender Law Library. In the interests of full disclosure, let me tell you that the Gender Law Library is very near and dear to my heart. And by that I mean my job consists of developing, adding to, and generally maintaining it. You can call me the Gender Law Librarian if you like – trust me, you wouldn’t be the first.

The Gender Law Library is an online database of laws impacting women’s ability to engage in business activities. We’re a little like Westlaw for women, for lack of a better analogy. The Library covers laws that regulate the employment of women, as well as those that affect female entrepreneurship. You’d be surprised how many areas this encompasses, I know I was. Things like maternity and child-care are covered, but so are legal capacity and all manner of family and property law.

Why don’t women rule the world?

Last week I wrote about the need for greater gender diversity in the financial sector, and ever since then I haven’t been able to escape it. Not so much the post itself, but the topic. It started off simply enough, with two comments and an email. That got me thinking, though – in journalism doesn’t three constitute a trend? Apparently the same holds true for blog topics, as I recently saw a story about the scientific benefits of having more women in finance on the front page of Yahoo. The piece, originally from ABC News, was entitled Should Women Rule the World? Putting aside that thoughtfully posed question, to which my response is: why not? I am forced to pose a question of my own: Why don’t women rule the world?

Microsavings for microentrepreneurs

Just what does it take to make a successful female entrepeneur in the developing world? At least part of the answer is that a woman needs a relatively effective way to save money. A new paper on Savings Constraints and Microenterprise Development reports on the results of an experiment in Kenya that provided zero-interest savings accounts to village microentreprenuers:

...formal savings accounts had substantial positive impacts on business investment for women, but no effect for men...roughly a 40% increase in average investment, four to six months after the opening of the account.

Apparently, women who keep their savings at home - either in the form of cold, hard cash or assets like livestock - have a more difficult time than men at turning that money into a productive investment. Although the problem could be that women may be "present-biased" - economists' jargon for have-to-have-the-new-handbag-now behavior - I am more inclined toward another explanation:

...many women in developing countries face constant demands on their income (from relatives or neighbors), and it may be difficult to refuse requests for money if the cash is readily available in the house.

Whichever explanation you prefer, the results are compelling: access to savings vehicles is probably just as important as credit in facilitating the development of female-owned microenterprises.

Too much testosterone on Wall Street

Editor's Note: Sarah Iqbal is a consultant at the World Bank, currently working on the Doing Business Gender Law Library. Previously, she worked as an attorney in California.

Writing in the New York Times columnist Nicholas Kristof opines on the benefits of having greater gender diversity in the financial sector:

At the recent World Economic Forum in Davos, Switzerland, some of the most interesting discussions revolved around whether we would be in the same mess today if Lehman Brothers had been Lehman Sisters. The consensus (and this is among the dead white men who parade annually at Davos) is that the optimal bank would have been Lehman Brothers and Sisters.

Wall Street is one of the most male-dominated bastions in the business world; senior staff meetings resemble a urologist’s waiting room. Aside from issues of fairness, there’s evidence that the result is second-rate decision-making.

The basis of his argument comes from studies pointing to greater gender diversity as mitigating increased risk-taking behavior. According to one such study peer pressure leads to male herding behavior in financially pressurized situations resulting in high risk bets. Women’s propsensity for risk-taking, however, seems immune to this type of pressure. So is it just me, or does the crux of Kristof’s argument boil down to there being too much testosterone on Wall Street?

Innovations for poverty action

One more worthy participant has just entered the blogosphere. Innovations for Poverty Action, a research outfit dedicated to the use of randomized controlled trials, has just launched a website as well as a blog. I plan on watching this one closely.

The work of IPA spans multiple fields, but for the private sector-inclined, make sure to check out Are Women More Credit Constrained?, which found that returns to capital were higher for male rather than female-owned microenterprises, and What’s Advertising Content Worth? Evidence from a Consumer Credit Marketing Field Experiment, which found that "creative content" can have a substantial impact on consumer credit demand.

Leveling the (business) playing field

As I mentioned not too long ago in Women doing business, the World Bank Group has released a database of laws that entail differential treatment of women and men in business called the Gender Law Library, pictured here:

I hadn't gotten full background about the new database when I first wrote about it. Penelope Brook, World Bank-IFC Director of Indicators and Analysis, explains a bit more about the rationale behind the project:

Gender and Business Performance: Compliance vs. Voluntary Reporting?

On Tuesday, Calvert mutual funds released a report entitled “Examining the Cracks in the Ceiling: A Survey of Corporate Diversity Practices in the Calvert Social Index." It spells out the business case for gender diversity and family-friendly benefits. Surveys included in the report indicate that:

• 79% of female consumers surveyed by the Women's Business Enterprise National Council in 2007 stated that "knowing a company purchases from women-owned businesses would compel them to try the product or services from that company, even if they were not a current customer."
• 81% of female respondents noted that "awareness of a company’s mission to buy from women-owned businesses would moderately or significantly solidify their brand loyalty".
• "Costs associated with employee turnover can reach 30-50% of the annual salary of entry-level employees, 150% of the annual salary of middle level employees, and up to 400% of the annual salary for specialized, high level employees". 

So why are companies reluctant to publicly release information on their gender work and diversity policies? We know that investors increasingly require a broader spectrum of information in order to better understand companies’ ability to fully manage risks and opportunities in their operations. In its report, Calvert suggests that increased disclosure is needed. “To manage diversity, companies have to be able to measure it.” 

Women doing business

The November edition of the Atlantic asks us to "Think. Again." The authors are not content just to provoke thought, though. Sandra Tsing Loh jumps right into the gender wars in Should Women Rule?, in which Loh reviews a slew of new books on women in leadership positions. Take, for instance, this pull-out quote:

The tally would appear to be: Women are smart, principled, professional, cordial—and dull. Men are conniving, crude, backbiting—and lively.

Although her anecdotes are lively, Loh's analysis never really gets too far below the surface. But her contention that some fundamental differences divide men and women deserves serious attention. A new online library of laws that prescribe different treatment of women in business provides the foundation for this kind of attention. Released jointly by the World Bank and IFC, this new library of laws covers 181 countries. (For a bit of background, check out the press release.) The library contains over 900 such laws and regulations - what kind of justification do governments have in mind for all of this?

CSR, gender, and business performance

While progress has been made on CSR reporting in areas such as the environment and social reporting (see for example recent reports by the Sustainable Investment Research Analyst Network and the Global Reporting Initiative), to date there is no concise global framework for gender and CSR reporting. Company reporting on gender equality was for many years confined to diversity policies, along with some program information. Increasingly, though, there are CSR reporting initiatives such as that by IBM that promote a more holistic approach to gender impact reporting. Why? The business benefits are obvious:

• reporting on gender helps companies in recruiting, retaining, and motivating female employees
• gender impact reporting strengthens a company’s reputation as a “women-friendly” enterprise and can help attract consumers and investors that are driven by ethical interests
• some companies improve brand-differentiation by targeting women customers or women’s interests groups.

New Blogger: Carmen Niethammer

Today the PSD Blog is welcoming a new blogger to the team - Carmen Niethammer. Carmen is a Program Officer in IFC's gender team and IFC focal point for the World Bank Group's Gender Action Plan. She is based in Washington, D.C. and currently task-manages a project on 'Gender and Corporate Social Responsibility Reporting' as well as on 'Gender and Export Promotion.' Carmen is also a fellow graduate of the Johns Hopkins School of Advanced International Studies. It has been a while since the PSD blog has gotten any contributions on the topic of gender, so her addition to the blog is timely. Welcome, Carmen!

From growing cassava to funding a university

Beatrice Ayuru introduces herself as a teacher and businesswoman. She is from northern Uganda, a war-ravaged area with much poverty and few schools.

A few years ago, with no business training and no money, Beatrice decided that she would build her own school. "No girl should endure what I had to go through myself," says Beatrice. "Education is the best way to help reduce poverty in my region […] and giving girl children education empowers them. In my village, women are over-dependent on men."

Beatrice started with a small garden of cassava. That earned her a little money which she used to buy wheelbarrows that she subsequently rented out. With that income, she managed to open a canteen. Soon, she had enough savings to start a school. Getting the land was a struggle.

Gender in migration

So far we have learned a lot about migration. But even though women account for nearly a half of all migrants, we still know little about the impact that gender has on labor markets participation or the amounts of money sent back - estimated to reach nearly $200 billion a year.

A new book - hoping to fill the gap - focuses on the differences behind men and women's decision to migrate and remit.  It also points to some understudied aspects of migration such as family cohesion and trafficking of women.

An Acehnese Biker Chick

When most people think about Sabang, they think about diving. For good reason – the diving spots here are among the best in the world. But there’s more to Sabang than diving, as I discovered by chance. It also has biker chicks.

After yet another fabulous weekend of diving, I took the minibus to Balohan, where the ferry port is. But for the first time ever, I could not get a ticket. Normally you can get on the boat by slipping some cash to the crew. But this time it was impossible. When the boat pulled away from the dock, there were people literally hanging off the railings. Definitely a game for younger people than myself.

Luckily, my Indonesian is now good enough to get me through situations like this. I found a little hotel nearby for only 60,000 Rp, leaving just enough for the return ticket and a few meals. Then I decided to go for a good long walk. I was quite a sight – a foreigner huffing along on foot, gushing with sweat. My biggest problem was turning down offers for rides. Saya jalan-jalan saja, I explained. I'm just going for a walk.

Attention friends of women entrepreneurs

If you know any businesswomen, the Doing Business team would like to hear about them.

They are particularly interested in any legal, regulatory and practical barriers that made it difficult for women to do business. The Doing Business project is credited with inspiring 115 reforms to date, and there's a good chance that the spotlight from the upcoming publication will "inspire" lawmakers to take a second look at some of the laws.

Email Sushmitha Narsiah snarsiah@worldbank.org ASAP with questions and nominations.

MDGs: a new picture

With the countdown half-way through, the data on the Millennium Development Goals are finally available via interactive maps. The timeline feature (step 3 on the map) tracks progress on any of the eight goals, throughout 189 countries.

In good taste: ethical fashion

Ahead of Paris Fashion Week, Washington, DC will have its own ethical fashion show this Thursday. The organizers hope to draw public attention to the final product but also to those who made it and the raw materials used.

But why does fashion matter? The textile and apparel industries represent 10 percent of global trade with the developing world, and clothing imports to the U.S. account for 90 percent of the its $60 billion market.

See the invitation and come if you are in the area.

Comic books from World Bank

Japanese-style comics meet World Bank propaganda with good reviews from BusinessWeek. It's "1 World Manga."

Rei, the teenaged orphan who wants to be a martial artist, and his companion, the animal spirit guide, learn through adventure about poverty, HIV/AIDS, global warming, girls' education and, of course, corruption.

Saving instead of lending: women's bank

"We know that we cannot eradicate poverty with credit" says Sindy Dastile, managing director of South African cooperative Masimbonge, which finances micro-businesses run by women. Instead, Ms. Dastile calls for creating saving schemes for women.

Women's bank will be a topic on October 15 at the second Pan-African Women's Conference in Johannesburg. In the meantime, see the story on women in finance in the late 18th century.

Money: best when left to women

Although conditional cash transfer programs have shown positive effects in many areas, including school enrollment and child health, households' compliance with program conditions is costly for both the households and the programs, which have to monitor their compliance.

A new World Bank study finds that the gender of recipients does make a difference.

Moving forward with land reform

During a three-year period, over 20 million plots in Ethiopia, covering the majority of rural lands, received land certificates. The benefits included an increase in bargaining power for women, stronger incentives for investment and more efficient transfer of land through decentralization of rental and sale transactions.

A new World Bank paper analyzes a nation-wide household survey which measures what individual titling of land can do for poverty reduction, even when funds are limited:

This scope for improvements notwithstanding, the massive scale and relative success of land certification in Ethiopia demonstrates that technical problems or lack of resources alone can not explain the failure by African countries to put the innovative aspects of recent reforms to their land legislations into practice.

iPhone is out, now is time for iWait

Conan O'Brien's new video shows what makes iPhone the ultimate smart phone. And the Solutions Research Group analyzed the buyer profile of Apple's $500 ipod-cell phone-internet device: 72 percent male, average age 31 and average income $75,600 – 26 percent higher than U.S. average.

The rumored 3 million iPhones, which will be released at the end of the day today, are likely to be sold out. But affluent Apple enthusiasts don't have to take chances with limited supply. The market has found a solution and it runs at about $700.

Women doing business

When Huda Janahi first applied for a business license in Bahrain, she was turned down. Not because she didn't have the right paperwork, nor because she didn't go through the required procedures, but because a woman had never previously applied. Not to be deterred, Huda registered as a family owned business and got on with the business of making money. She later re-applied successfully in her own name. Now her business, Global Freight & Passenger Services is a multimillion dollar company.

Women's participation in the formal sector as well as business registration is contingent on a range of variables, many of which are outlined in the Doing Business report. The theme for Doing Business 2008 will be Opportunities for Women. It will consider ways in which ten indicators help or hinder women's participation in private sector activity across various economies.

If you have interesting examples to contribute, please let us know.

Smoking is bad for your... pocket

The adverse health effects of smoking are old news. Michael Lokshin and Zurab Sajaia (on page 18) examine the habit's less obvious effect on your paycheck. The data comes from the Tomsk region in Russia – a country with the fourth highest rate of smoking:

On average, non-smoking men earn more than smokers [$400 vs. $330], respectively, thus enjoying about a 19% unadjusted wage premium over smokers. The wage premium of non-smoking women was quite a bit lower at 6%, which translated into an approximately $15 'bonus'.

There is also the economic cost, which in Tomsk amounts to nearly 2 percent of the region's GDP. The loss is not remedied by revenues from cigarette consumption, where, according to the research, tobacco companies pay only 65 rubles per 1000 cigarettes and 8 percent on the sale price of cigarettes.

Russia aside, as the rest of the world is curbing the habit, private sector insurers ponder the consequences.

School, job or government life?

Some years ago the British Government decided to support a major investment in upgrading education on St Helena. A new secondary school was built - and named after Prince Andrew, who, together with several St Helenians, had served as part of the force sent to deal with the Falklands conflict in 1982. Teachers were sent to the UK for training. Curricula were upgraded. In the late 1980s and early 1990s this was the largest development project in St Helena. Before the upgrading it was noticed that girls did noticeably better than boys in finishing their secondary education, and going on to higher education (although the latter was rare for both sexes).

The reason was not hard to find. One route to employment for young St Helenian men was to work as laborers on Ascension Island or the Falkland islands. This paid much better than government jobs on St Helena, but demanded few qualifications. Girls, on the other hand, needed to compete for the jobs available on St Helena, where qualifications were used to screen among the applicants.

While the upgrading of St Helena's education system was underway, by coincidence there was a large expansion in demand for labor from the Falkland Islands. Suddenly St Helenian women were in demand as well as men.

Lighting the bottom of the pyramid

A new solar rechargeable flashlight - backed up by three AA batteries that last up to three years (costing $0.80) - gives up to 7 hours of light. In a market where nearly 2 billion people have no affordable access to light, light is a big deal:

If you're an environmentalist you think about [the problem] in terms of discarded batteries and coal and wood burning and kerosene smoke; if you’re a feminist you think of it in terms of security for women and preventing sexual abuse and violence; if you're an educator you think about it in terms of helping children and adults study at night.

BOP households spend an average of 7% percent of this income on energy. In Africa, where 250 million poor spend an estimated $12 billion, energy ranks third in households' expenditure. In Asia, mainly due to India’s share, it ranks second.

To learn more or participate in the initiative click here.

Partnerships for women's health

On May 29, PSP-One will bring private-sector individuals from developing countries and organizations to discuss what motivated them to enter into the partnership, their expectations, the obstacles they encountered and their views on the future of their partnerships.

A reception will follow, and you're invited.

Child death rate down in some of the poorest countries

Bangladesh, Nepal and Malawi have made major strides in reducing child mortality despite a shortage of resources.

Political will and a focus on family planning programs were found key to decreasing fatalities, trumping, in many cases, national wealth as a deciding factor. The Save the Children report has more details.

Gender inequality is very expensive

Gender discrimination in Asia costs the region an estimated $80 billion a year – finds a new report. India, Indonesia and Malaysia lose the most by restricting women's access to employment and education, explains Mr. Kim Hak-Su, the executive secretary of UNESCAP, in a video.

Development after war

Drawing on civil war incidences in 41 countries between years 1960 and 2003, a new World Bank paper compares economic, social and political developments in the pre and post-war periods.

The paper finds that once peace is achieved and sustained, effective recovery is feasible. The average growth in the sample countries exceeded prewar levels by over 2 percent, which, in the absence of investment, the authors attribute mostly to improvements in productivity and better resource utilization.

Lastly, the authors imply a connection between aid and growth by implicitly linking the reallocation of resources away from military expenditures to progress in social areas and a higher income per capita.

Gender on G8

For the first time in history, women's economic empowerment will be on the G8 agenda in 2007.

German Chancellor Merkel made the commitment at a High Level Summit on Women’s Economic Empowerment in Berlin last month (to launch the World Bank Group Gender Action Plan: Gender Equality as Smart Economics). It seems it has taken a woman at the helm of the G8 to finally get this critical issue on the agenda.

The links between gender and growth have been attracting increasing interest since The Economist asserted last year "Forget China, India and the internet: economic growth is driven by women" and pointed out that in the last decade women's increasing entry into paid employment has contributed more to global growth than China.

As a recent IMF Working Paper notes, a range of studies now suggests that societies that increase women's access to education, health care, employment and credit and that narrow differences between men and women in economic opportunities increase the pace of economic development and reduce poverty. So if this all makes so much sense why aren't countries doing more to improve the legal and economic status of women?

Speaking at the German summit, CEO Abed of BRAC, pointed out that around a quarter of countries still have laws that prohibit women’s land ownership and criticized governments for impeding women's ability to lift themselves out of poverty and contribute to economic growth. In a number of African countries, for example, custom law overrides constitutional principles of gender equality, preventing women from inheriting land and hence hindering their access to business loans and producer groups, keeping them stuck in the informal economy. Women are the overwhelming majority of those.

So why aren't international institutions and bilateral donors putting more pressure on developing country governments to provide women equal rights?

The African Development Bank spokesperson at the Berlin summit pointed out the tension between the notion of country ownership of development agendas and the conditionalities that used to accompany development assistance. He asked "How can donors and IFIs legitimately give unconditional budget support in countries where the legal system effectively disenfranchises 50% of the population?" What do others think?

International Women's Day

March 8 is the International Women's Day but as with many things, numbers speak louder than words. Make sure to visit "Statistics and indicators on women and men." This is the most comprehensive statistical resource on women's position in households, education, work and political decision making available.

There you'll find that women's share in decision making positions, defined as legislators and managers, is the highest in Jamaica and one of the lowest in Algeria – 60 and 5 percent respectively. The U.S., at 42 percent, is at par with Latvia and Lithuania.

Naturally, World Bank has something for today also.

The silent majority in a globalized world

Are women as globalized as men? Daniel Altman provoked some gender-balanced debate by noting that 95% of the comments on his Managing Globalization blog are from men. The same is true on the PSD blog. Commenters write that women sometimes post as men in hopes of being taken more seriously. They also quibble about his implied definition of globalization. Those points aside, Dan raises an interesting question. A few of my unscientific reflections on "women's globalization" after the jump...

A fresh face for South African wine

Ntsiki Biyela is South Africa's first black female winemaker, at just 28 years old. If you're in the Western Cape, head to the Stellekaya winery to sample her work.

Female entrepreneurship on the rise

Chile has half a million female entrepreneurs, a marked increase in just the last 3 years. If current trends continue, as many women as men will be starting new businesses in Chile in 2010. These figures are from the Report on Women and Entrepreneurship in Chile - 2005/2006 (overview in Word), prepared by Universidad del Desarrollo. The report is part of the Global Entrepreneurship Monitor (GEM), led by Babson College and the London Business School.

Compared to their male counterparts, female Chilean entrepreneurs are a bit older, a bit more risk-averse, and much more likely to start retail and service-sector businesses. 75% of them feel that in Chile, men and women do not receive equal exposure to good opportunities to create a new business or enterprise. (via Jeff Cornwall)

If you'll permit me to change acronyms mid-stream, GEM also stands for Gender Entrepreneurship Markets. This IFC group puts out a newsletter on Women in Business. The most recent issue says that Nigeria's Access Bank will be one of the first banks in Africa to dedicate lines of credit to finance women-owned businesses. Also, a World Bank Group study found that Kenya could gain between 2.0 to 3.5 percentage points of GDP growth per year by addressing gender inequalities.

Cookie-cutter approach to social enterprise

Two years ago, [Alicia] Polak founded The Khayelitsha Cookie Co., which now employs 11 women from the sprawling shantytown to bake high-end cookies and brownies that are distributed to top hotels, restaurants and coffeehouses throughout South Africa. The cookies come packed in plastic with a cartoon on the front showing a big, African 'mama' in traditional dress and the company slogan: "Creating opportunity one bite at a time."

For Polak, the entrepreneurial venture is about making money, but also much more. "My driving force in this company is that I want them out of those shacks," says Polak of the hundreds of thousands of people living in poverty in South African townships. "I want to help change their lives using this company as the vehicle."

Read the whole article for more about her story. Her company is part of Wharton’s Societal Wealth Generation program.

Female entrepreneurship in Afghanistan

According to Microfinance Times, 75 percent of all active microcredit borrowers in Afghanistan are now women, many of whom use their loans to start businesses. Beauty parlors, tailoring shops, and bakeries are just some of the enterprises these women now own. Their efforts, observers say, are indispensable in the struggle to reverse decades of deprivation in Afghanistan…

But this is still a revolution in the making. Even in post-Taliban Afghanistan, the idea of women owning businesses and working is still somewhat taboo. For some it's even been life threatening…

Read the whole thing. And a previous post on starting a business in Afghanistan.

Womenomics

In their guide to womenomics the Economist argues that the future of the world economy lies increasingly in female hands - perhaps the world's most under-utilized resource.

In poor countries too, the under-utilisation of women stunts economic growth. A study last year by the World Economic Forum found a clear correlation between sex equality (measured by economic participation, education, health and political empowerment) and GDP per head. Correlation does not prove the direction of causation. But other studies also suggest that inequality between the sexes harms long-term growth.

In particular, there is strong evidence that educating girls boosts prosperity. It is probably the single best investment that can be made in the developing world. Not only are better educated women more productive, but they raise healthier, better educated children. There is huge potential to raise income per head in developing countries, where fewer girls go to school than boys. More than two-thirds of the world's illiterate adults are women.

More on global female entrepreneurship and the IFC's work in this area.

Update: The New Economist focuses on the more jobs, more babies paradox.

Growth, penny by penny

John Lancaster profiles how companies and entrepreneurs are targeting the untapped market potential of India’s rural poor.

A 30-year-old mother of two, Kadem is part of a novel Hindustan Lever initiative that enlists about 20,000 poor and mostly illiterate women to peddle such products as Lifebuoy soap and Pepsodent toothpaste in villages once considered too small, too destitute and too far from normal distribution channels to warrant attention.

Started in late 2000, Project Shakti has extended Hindustan Lever's reach into 80,000 of India's 638,000 villages, on top of about 100,000 served by conventional distribution methods, according to Dalip Sehgal, the company's director of new ventures. The project accounts for nearly 15 percent of rural sales. The women typically earn between $16 and $22 per month, often doubling their household income, and tend to use the extra money to educate their children.

So far consumer product firms have been the most successful at these pro-poor bottom-of-the pyramid approaches. Though this could soon change. Also see Unilever’s experience in Indonesia (1, 2).

International Women's Day 2006

Global Voices Online is hosting a two part feature honoring African women. (ht: Jewels in the Jungle)

Also, see my earlier post on the state of female entrepreneurship in developing countries. For more, see the IFC's Global Directory of Women's Business Associations, their gender tools and resources, and their Women in Business Newsletter.

Female entrepreneurs

Today is international women’s day. So with perfect timing, Global Entrepreneurship Monitor has released their 2005 report on women and entrepreneurship. Findings include:

• The entrepreneurship gender-gap is widest in high-income countries, where men are twice as likely there to engage in both early-stage and established ventures. In middle-income countries the gap narrows to 25.6% in early-stage and broadens to 59.1 % for established business owners.
• In high-income countries there is no gender gap in term of business survival. However, in middle-income countries a woman’s business is significantly less likely to stand the test of time than a man’s.
• Women are more optimistic about the expansion of their new businesses.

Maybe they should have surveyed Kenya? Download the full report.

Update: WBG press release on International Women's Day.

Mapping the global future

‘Mapping the Global Future' is the latest unclassified report from the US National Intelligence Council. This forward-looking scenario based report focuses on the contradictions of globalization, the impact of the rise of China and India, and new security risks. More on specific topics below the fold.

Global Entrepreneurship Monitor

Babson College and the London School of Business have released the 2005 Global Entrepreneurship Monitor. Jonathan Moules reports for the Financial Times:

Entrepreneurs in countries with middle per capita income are closing the gap on their counterparts in richer countries by tapping into technologies unavailable to them just a year ago… [The GEM] found that higher percentages of people start businesses in middle income countries, such as Thailand and Brazil, than rich nations, such as Spain and Japan

…Entrepreneurs from middle income countries also tend to create more innovative businesses with a higher growth potential on average than rich country start-ups… However, entrepreneurs in high income countries are more likely to create businesses to meet a perceived opportunity, which are less likely to fail than the necessity-driven businesses, prevalent in middle income countries.

The reports also claims that venture capital increased in 2004 for the first time since the .com bust.

Update: More facts and videos, via New Economist.

Starting a business in Afghanistan

For any aspiring entrepreneur, the challenges in rebuilding [Afghanistan's] society are many. Three decades of war destroyed Afghanistan’s infrastructure, ravaging the country’s roads and power grid. Security concerns make some regions difficult to reach. And skilled labour is in short supply, meaning companies such as Ms Nawabi’s often struggle to find enough workers. Most of the time they have to import skilled labour from neighbouring Iran or Pakistan. Capital, like electricity, is limited and expensive. A recent World Bank report on business climates ranked Afghanistan 153 out of 154 when it comes to securing credit.

Ms Nawabi’s case bears out the numbers. She and her partner used $20,000 of their own funds to start the firm. With interest rates above 20 per cent and demands for collateral high, they have relied upon reinvested revenues to fund the business. Lack of capital has limited the firm’s growth. It turned down a $6m road contract in 2005 because there was not enough money to secure a performance bond to guarantee the project’s satisfactory completion.

Gayle Tzemach’s article also highlights the important role of women entrepreneurs in Afghanistan and the obstacles they face. Also see the summary bullets at the end of the article.

Kenya fact of the day

In 1999, there were 612,848 women entrepreneurs in Kenya, 47.7% of the total.

From a new AfDB/ILO report (via Bankelele).

It is common, I feel, to underestimate women's role as entrepreneurs. No longer!

She keeps her ego in her handbag

Some of you may have missed a nice profile of Ngozi Okonjo-Iweala in the Guardian a couple of weeks back.

"When I see vested interests still try to undermine me, I know it means I'm successful. When I manage to convince one person to change, I think this is why I'm here. The ability to change things is a powerful incentive."

Mrs Okonjo-Iweala left the World Bank to become Minister of Finance in Nigeria. Our loss is Nigeria's gain.

GEM newsletter

IFC's GEM (Gender Entrepreneurship Markets) have released their quarterly newsletter, which includes IFC and World Bank news on female entrepreneurs, a profile of artist and entrepreneur Nella Kumafo, and links to resources and events.