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Opinion

Creating more and better jobs by supporting female entrepreneurs

Published on 25 April 2022

Earning an income from work is an important step towards economic empowerment for women. However, paid work does not always automatically generate enough resources that support agency.

Therefore, it is important to ask how more and better jobs could be created for women that strengthen agency as a stepping stone for empowerment. Mozambican social incubator MUVA shows that female entrepreneurs are able to improve business outcomes with the right mix of support that not only has positive implications for their own employment but also for others.

Solutions to increase job creation in Sub-Saharan African countries are urgently needed. Enterprises in the formal economy are unable to absorb the demand for jobs. The option for youth is to find work in the informal sector, generate income through self-employment or start a micro business.

Women entrepreneurs are a big portion of this group. They also face gendered constraints and challenges within the labour market and are often overrepresented as entrepreneurs in the informal sector.

When MUVA started to develop entrepreneurship projects , a question struck us: Can microenterprises – either formal or informal – play a role on job creation?

An overlooked opportunity

What MUVA knew was that over time, support to smaller female-owned enterprises born from “necessity” rather than “opportunity”, has often been brushed aside with the assumption that they lack the ambition to grow and upscale. On the other hand, we learned through MUVA’s employability projects that many employment opportunities offered in Mozambique for entry level youth was coming from SMEs and microenterprises.

Then MUVA thought: if we increase the support and survival rate of these enterprises, could women-led enterprises become more resilient and sustain, or even increase, employment over time? What we found is that collectively, micro and small enterprises do create much needed employment opportunities. They also create opportunities for the female entrepreneurs themselves.

Jobs for the long-term

There is, however, a problem of sustaining the jobs created over time. Many businesses struggle to expand and cannot offer stable incomes. What MUVA have learned is that with the right support, female entrepreneurs are more able to sustain these jobs, and even create more opportunities.

This is backed by evidence, which shows that even if female entrepreneurs started their business out of “necessity”, they are highly motivated to improve their business performances and increase profits.

Building on that evidence, a recently published paper in the MUVA series on female entrepreneurship seeks to answer how female entrepreneurship programmes can best generate more and better jobs for women within the context of sub-Saharan Africa. It is a comprehensive literature review followed by the assessment of two MUVA female entrepreneurship projects.

Both the literature and the MUVA experience, show that the personalised and psychology-based training for women entrepreneurs work very well to develop their entrepreneurial behaviours and mindset. This relates to the idea of building agency to set goals and act on them with a sense of self-confidence.

A combined approach

Combining this with “harder” skills, such as bookkeeping, building client relations, and improved quality and pricing of products or services, and opportunities (e.g. access to finance), the case of MUVA shows that female entrepreneurship programmes can improve business performances with spill overs to better employment outcomes for the female entrepreneurs and their employees. These improvements strengthen agency and take them a step closer to empowerment.

MUVA’s business accelerator project PAM, for example, shows that the 54 participating women-led micro-businesses, increase in 18% employment for others, an increase of the ratio of workers per participant from 1.9 to 2.2. Although this is a small sample, it shows the potential of the programme to increase the total employment even during an economically difficult period, as PAM was rolled out during the peak of the Covid-19 pandemic.

Jobs were not only created, but the participating female entrepreneurs also started to pay higher compensations and significantly reduced the number of employees that worked without contract or agreement.

A second MUVA project, MUVA+ for self-employed informal market traders, no jobs were created, but the participating women were able to increase their incomes and save some money due to improvement in their business outcomes. Based on these findings, both projects show that more work due to better business performance, reduces underemployment and has the potential to create new jobs and more stable incomes.

Importantly, MUVA findings show that women entrepreneurs increased awareness of gender issues within their business, establishing mixed teams to improve business performance, and potentially giving women workers better opportunities. Participating women entrepreneurs were able to understand better their own gender perspectives on work and feel more confident about the importance of being a role model for other women in their community.

In the longer term, better jobs can only be created and sustained with higher levels of labour productivity. This does not mean that enterprise development programmes need to change radically the way women do business, but step by step the self-employed and micro business owners can with support, such as MUVA did, improve business performances and with little investments improve their productivity.

If this can be achieved on a larger scale, over time this could increase demand in the market giving rise to new business opportunities and future employment for women and youth.

Partners

In partnership with
MUVA Oxford Policy Management

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Mozambique

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