March 30, 2023

Paying it Forward: Women agri-entrepreneurs are the biggest return on investment

When you think of agriculture in the Democratic Republic of Congo (DRC), one image should immediately come to mind: that of a woman entrepreneur.

Whois she? She is most likely between the age of 40-60 and educated, even though nationally women in the DRC consistently complete less years of education than men: only 36.7 percent of adult women reach a secondary level of education compared to 65.8 percent of adult men. Her business efforts are concentrated on crops such as corn and cassava. If she has employees in her business, the number is small, generally around four. While her contributions may strike some as modest, she is the biggest return on investment for her country.

Agriculture is vital in the DRC, both as a source of food security for households and as a sector of promising economic growth. Data suggests that the country has the potential to be Africa’s food basket with the ability to feed 2 billion people, but the government estimates that only 10 percent of the country’s 80 million hectares of arable land is being used. Women agri-entrepreneurs are crucial actors in this context and are increasingly recognised for the vital social and economic role they play both within their individual households and their communities at large. Their businesses increase and diversify household income, allowing for more investment in household assets such as health, education, and nutrition, ensuring that their children and the next generation have enough to eat, stay healthy, and go to school. On the national level, women entrepreneurship has been credited with reducing poverty, generating employment, and making strides towards reducing gender inequality. Women entrepreneurship is also equated with more inclusive and equitable development. In many countries with emerging economies such as the DRC, their businesses are often the only viable option for employment, particularly among marginalised groups, such as youth and older persons.

The dividends of investing in women agri-entrepreneurs are clear, but women agri-entrepreneurs continue to face many barriers in establishing and growing their businesses. The structural (economic, legal, institutional) and behavioural (cultural norms, gender bias) constraints that exist for women entrepreneurs may explain why most women-led businesses in the DRC are Micro, Small, and Medium-sized Enterprises (MSMEs), defined as having10 or fewer employees. Gender discrimination, particularly in traditionally male-dominated sectors like agriculture, continues to severely affect women’s access to resources, technology, capital, and networks, limiting their range of opportunities when it comes to enterprise development. Additionally, care work and household labour disproportionally burden women, limiting business growth as women must strike a balance between economic participation and reproductive care responsibilities. In essence, women agri-entrepreneurs must contend with a complex interplay between economic status and social status that further complicates an already difficult to navigate business environment within are source-poor context. Despite this, these entrepreneurs provide an essential buffer against poverty for themselves and their employees and these enterprises can and do become financially successful and transition into more established businesses.

Given the importance of women agri-entrepreneurs and their businesses, how can we encourage and ensure their success? Using a novel dataset focused on women-led MSMEs in the agriculture sector of the DRC provided by Lady-Agri, a quantitative analysis exploring the linkage between women agri-entrepreneur sand their business growth and success uncovered the following key findings:

·     Strengthen the financial inclusion of women-led enterprises. Empirical results have shown that finances have an outsized effect on the ability of women agri-entreprenuers to reach their growth potential and increase business formalisation. A first step is the adoption of programming that targets the financial inclusion of women and incentivises formal banking institutions to cater to women clients. Examples of this could range from revising processes for approval and delivery of loans to women agri-entrepreneurs, making them less burdensome and time-intensive, to providing capacity-building training sessions to financial institutions in areas of gender sensitivity, specificities around the MSME market, and strategies for positioning financial products to benefit more women. Ultimately, women agri-entrepreneurs represent a largely untapped market sector for African financial institutions.

·     Implement enterprise development programs that develop human capital of the entrepreneur. Interventions to strengthen financial access for MSMEs must also be augmented with advisory services, technical assistance, business trainings, and opportunities to develop human capital for the entrepreneur. A holistic approach that provides a complete package of workshops and trainings is recommended as this type of programming addresses the multiple entrepreneurial constraints and barriers which diminish chances of growth and formalisation for women agri-entrepreneurs and has been shown to have positive effect on employment generation and improve job quality.These programs should also facilitate networking and allow entrepreneurs to learn from one another and share information and resources. Trainings should include psychology-based elements, which research shows may be key for developing a more entrepreneurial mindset that would facilitate the development of more dynamic and growth-seeking behaviours of enterprises, such as diversification. Additionally, wraparound services like childcare would also be necessary to address household constraints for some entrepreneurs though more research needs to be done about how to best design such services.

Investing in women agri-entrepreneurs has never been more critical than now. As the effects of climate change (droughts, flooding, social erosion, sandstorms, and locusts) become increasingly common and exacerbate farming conditions, they create further hardships for women agri-entrepreneurs and enhance the existing gender inequalities in the sector. Continued sustained and committed efforts in investing in women agri-entrepreneurs must continue if we are to truly enhance gender-equitable development.

Written by Naomi Ho, previous LadyAgri Intern & recent graduate of  Master's programme in Public Policy and Human Development from Maastricht University and United Nations University-MERIT. Linkedin Here.

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