MICROFINANCE PAPER WRAP-UP: “Micro-business 2.0: A New Generation of Women “Social Commerce” Entrepreneurs in India & Indonesia,” Published by Women’s World Banking (WWB)

By Sophie Theis, published by Women’s World Banking, November 2019, 18 pages, available at https://www.womensworldbanking.org/insights-and-impact/women-social-commerce-entrepreneurs-in-india-and-indonesia/

Female entrepreneurs in India and Indonesia historically have faced a multitude of challenges such as “low access to capital, restricted mobility, limitations on property rights, time poverty and gender norms.” In both countries, women own less than 30 percent of businesses, and a disproportionate number of the businesses that they do own are micro-enterprises. However, according to Ms Theis, the new models of commerce and entrepreneurship that are growing from the global increase in internet connectivity and smartphone ownership can contribute to greater financial inclusion and economic success for female entrepreneurs.

Through surveys and interviews with women business owners in both India and Indonesia, the author attempted to understand whether growth in digital commerce and financial services has allowed women in these countries to achieve a meaningful sense of inclusion. Ms Theis also sought to understand how these trends could be utilized to further empower women. Her specific questions were: (1) “How are low-income women currently engaging in social commerce?”; (2) “What drives successful adoption of online platforms among women micro-entrepreneurs?”; and (3) “How are women’s business and financial needs and aspirations changing, and how does this create new opportunities to support their businesses’ growth and financial inclusion?”

Ms Theis found that female entrepreneurs did not always engage in the elements of “social commerce” in the same sequence or manner. Some women used social media platforms as consumers before leveraging them to attract customers. Others used multiple electronic platforms to complete a transaction with a customer, but still concluded the sale with cash. Given the range of strategies women use, the author highlighted the need to support multiple pathways to engaging in digital commerce. She also suggested integrating various services into one platform to ease the process.

Ms Theis noted the success of the “assisted adoption” model, through which financial institutions’ sales representatives support new merchants as they use e-commerce and digital payment apps for the first time. Although this increased the confidence of female entrepreneurs, the author suggested additional measures are needed to improve inclusion, such as providing further clarification on the registration process to users and creating “peer ambassador” programs to reach women who work from home.

Many women are also limited by existing products and financial restrictions. For instance, women who run businesses alongside their husbands are typically unable to have complete access to transaction records because most e-commerce platforms only link to a single bank account, which typically is managed by the husband. These women often are not registered on the account, limiting their ability to perform transactions and build financial management experience. The author suggests that financial services providers focus on providing women with ownership of accounts rather than access to a shared account. Another issue is that women are still highly credit-constrained in both India and Indonesia. Ms Theis encourages financial service providers to increase women’s access to customized loans and other services.

In sum, the author concludes that women are an important segment to consider, not only for their own benefit, but to fuel the growth of e-commerce and digital finance as a whole. In other words, addressing the unmet needs of women in India and Indonesia is key to helping financial services providers remain competitive in a quickly changing marketplace.

By Anna Gravois, Research Associate

Sources and Additional Resources

WWB report
https://www.womensworldbanking.org/insights-and-impact/women-social-commerce-entrepreneurs-in-india-and-indonesia/

WWB homepage
https://www.womensworldbanking.org

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