The microloan movement provides another path for women to “lean in” in the developing world.
Sheryl Sandberg, chief operating officer of Facebook, led a powerful — and somewhat controversial — conversation last year to empower women to “lean in” and create greater opportunities for themselves in the workplace.
While an increasing number of women have moved up the corporate ladder in the past few decades, the glass ceiling remains in place for most. In Minnesota, for example, just 17.4 percent of senior executives at the top 100 publicly held companies are women.
But the barriers are even greater for women living in developing countries. Of the estimated 2.5 billion people worldwide who live on less than $2 a day, 70 percent are women. This is hard to believe — and devastating to families. These women are more vulnerable to poverty, forced labor and violence. We must invest more resources in women across the developing world.
We know what you’re thinking. With so many economic challenges here in the United States, why should we invest in economic opportunities for women in developing countries?
The answer is simple. It’s not just a moral imperative to promote equal opportunity, it’s a smart business decision.
Closing the gender gap can increase a developing country’s GDP by up to 16 percent, according to the 2012 Global Gender Gap report by the World Economic Forum. That means more jobs, more spending and a healthier economy.
In a recent article in the Harvard Business Review, Carly Fiorina, former CEO of Hewlett-Packard, said: “The single greatest point of untapped leverage in the world today is a woman who could be an entrepreneur.”
Over the past 30 years, we’ve seen communities increasingly leverage this untapped resource. The number of female entrepreneurs holding a job has increased by more than 500 million. Women are also establishing businesses at a “higher rate than men in many emerging economies,” according to a 2013 development report by Center for Strategic and International Studies.
Yet despite this progress, women continue to face barriers to entering the formal economy. The greatest challenge facing women in places like Rwanda and the Democratic Republic of Congo is not lack of knowledge or skills, but a lack of access to banking and training. Her ability to start a business, support her family and contribute to the local economy hinges on her access to financial services.
That’s why, as businesswomen and mothers, we have become strong supporters of micro lending, where women receive an average of $150 to start a small business. They are then given training and support as they build and expand their business. Microloans are not handouts — after all, the loans are repaid and then recycled. It is a sustainable model.
Since 1971, Opportunity International has provided more than 21 million loans valued at $6 billion along with other financial services and business training to help individuals break the cycle of poverty, transform their lives and strengthen their families and communities. Today, the organization supports nearly 5 million people in 22 countries across Africa, Asia and Latin America. About 93 percent of its loan clients are women.
Opportunity International knows about the positive social and economic impact that comes from investing in women entrepreneurs. A woman spends 90 percent of her income on her family, for example, while men typically spend only 35 percent. By reinvesting in their families, there is a generational domino effect as children are provided with greater opportunities.
We traveled to Rwanda in November to meet several Opportunity International clients and see the organization’s programs in action. Many of the women we met were still recovering from the devastating genocide of 1994, but had successfully used the financial support to lift themselves, their families and their communities out of poverty. Many are caring for orphans while also helping to employ and empower others in their community — creating a ripple effect of change.
It was remarkable and incredibly uplifting to see these women rising up and breaking the cycle of poverty in some of the most devastated and vulnerable communities in the world.
We recently hosted a forum in Minneapolis attended by Opportunity International CEO Vicki Escarra, Carly Fiorina and more than 300 business women to discuss ways to promote economic growth and stability for women around the world. One thing we all agreed on is that change begins with us as business leaders and visionaries in Minnesota.
Together, we can change the world.
About the authors: Cassidy Burns is a principal at Riverbridge Partners in Minneapolis. Her e-mail is Cassidy@riverbridge.com. Polly McCrea is a retired business owner. Both are governors of Opportunity International.