Women Entrepreneurs With Microfinance Loans Face Lots Of Challenges, With Or Without A Pandemic

How have microfinance-supported entrepreneurs adapted to Covid-19-related business challenges? And what problems do they typically face, with or without a pandemic?

The answer: Typically, they’ve exhibited the same resourcefulness that has characterized many other small businesses during the pandemic. At the same time, they face a variety of ongoing challenges.

That’s according to a new report from crowdfunding lending platform Kiva, Catalyzing Innovation for Women Entrepreneurs. Produced with the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), the research, conducted last year, focuses on 328 women entrepreneurs in Samoa, Cambodia and Fiji; the enterprises all work with microfinance organizations that are Kiva partners.

The report found that entrepreneurs responded to Covid-induced challenges in a variety ways. One was to change their distribution strategy. For example, many started selling door to door, instead of waiting for customers to come to a central market. Others began to sell other products, like baked goods. “It’s interesting to see the resilience and creativity of these entrepreneurs,” says Spencer MacColl, senior manager of impact at Kiva.

Pandemic-Related and Other Challenges

Some cited challenges in the report were specifically the result of Covid, while others were what MacColl describes as “more systemic.” For example:

Selling on credit. In countries like Fiji there’s a cultural norm called KereKere, by which people must help relatives or neighbors in need without expecting repayment. So when Covid hit the income of the local population, entrepreneurs who had previously sold goods on credit found that many customers put their payments on hold.

Lack of childcare. Most of these entrepreneurs have enterprises they can run from home. That’s in large part because they lack childcare options, which has limited the type of company they can operate. Some 70% of women in Samoa, for example, reported having a child under the age of four. And one in five entrepreneurs said that a lack of childcare affected the type of business they operated. What’s more, women with young children also reported lacking sufficient time to spend on their business.

Women were particularly impacted by this problem during pandemic lockdowns and restriction. For example, when the pandemic hit, many in Cambodia were working in the garment industry, where they tended to have access to childcare. When they were laid off or had their hours reduced, they turned to entrepreneurship to make money. But, without childcare, they opted for enterprises like using small plots of land at home to grow food for sale.

Lack of diversification. Although many women started selling different products during the pandemic, they still found their options to be restricted. For example, in Fiji, three sectors—food, small retail or selling kava—accounted for more than 75% of business type.

A lot of competition, not enough demand. When asked what they thought were their biggest challenges, the top choice was “too much competition in my industry” and second was “not enough demand for my product or service.”

Poor record-keeping. Only about half of entrepreneurs reported keeping written sales records. That practice could be contributing to another challenge, problems getting access to loans from more formal banks.

Improvement in Lives

According to MacColl, the research also showed women’s lives have improved significantly, thanks to their access to capital. More than 90% reported that their incomes have increased because of their loans. Women working with Kiva’s microfinance partners for six years or more are almost three times as likely to own more than one business.

Respondents also cited a need for additional business training that could help them expand their enterprises, as well as a more flexible repayment schedule.


Leave a Comment