Women and Microenterprise—Learning from the new Nobel Prize Winner
Last month, the world awoke to the announcement that Muhammad Yunus, founder of the world renowned Grameen Bank, was awarded the 2006 Nobel Peace Prize. Globally, as champions of the microenterprise and microcredit model, we breathed a collective sigh of relief and long-awaited pride. Finally, we thought, the story will be told—millions of women changing their lives, one business and one loan at a time.
The story is worth telling, that’s for certain. The transformative work of our international partners has been happening now for decades. Through its 6.6 million borrowers, 97% of whom are women, the Grameen Bank and its founder have clearly dismantled the patriarchal paradigm that women don’t make good borrowers and that a country’s poverty can’t be forever changed by a single strategy. We’ve learned similar lessons from the amazing work of India’s Self-Employed Women’s Association (SEWA), founded by Ela Bhatt. Established in 1972, SEWA is the largest member-based organization of poor working women in India (700,000 members), and it continues to teach us about the collective power of poor women uniting to create their own economy and future.
But recent media coverage of the strategy’s success in India and other developing economies has missed a powerful part of the story. For millions of women here in the U.S., too, business ownership in the form of microenterprise is changing lives. Microenterprise has increased skill levels and provided the income and flexible work hours that allow women to care for their children and contribute to their communities. In addition, microcredit in the form of small loans provides women with much needed capital to start and expand their businesses. In the last 20 years these strategies have proven to be two of the most effective tools in helping women and their families move out of poverty.
Just ask America Ducasse. Originally from the Dominican Republic, upon immigrating to the U.S. Ducasse struggled to find work, to feed her children and to provide them a home. With help from Acre Family Day Care in Lowell, Massachusetts, Ducasse joined millions of others in the entrepreneurship quest. Today, her family day care business provides her with an above average income, an ability to save, and the flexibility to care for other children in her home while she cares for her own.
Her story is not uncommon. Women all over the country are accessing the services of microenterprise programs to help them start and stay in business. This is not “new” news—self-employment and other enterprise development strategies have long been acknowledged as key pathways in helping women and families find economic solutions to poverty. Today, there are 20 million microenterprises (typically defined as a small business with 5 or less employees, operated by a sole operator) in the United States. Of these, 9.1 million women-owned businesses employ 27.5 million people and contribute $3.6 trillion to the economy, according to the Small Business Administration.
Don’t be fooled by the popular stereotype of microenterprise owners as running minute businesses that are irrelevant to our economy and forever destined for our kitchen tables. Although microenterprises are typically quite small and provide only a portion of families’ income, there are more and more women entrepreneurs that have broken out of this perceived “box” by increasing their profits, becoming competitive, and building long-term assets for their children—thus breaking the cycle of intergenerational poverty.
The microenterprise field in the U.S. is currently in its adolescent phase. In the early nineties, several economic development industry leaders, including The Ms. Foundation for Women, came together to build and develop the microenterprise industry here in the U.S. Now, almost 17 years later, we’ve seen the emergence of more than 500 programs across the country providing needed training, business services and follow-up counseling to microentrepreneurs. Many programs also help women entrepreneurs build long-term savings, increase their overall financial education and acquire needed capital and loans for the businesses.
In rural New Hampshire for example, the Women’s Rural Entrepreneurial Network (WREN) not only provides women with business classes and counseling, they also own and operate WRENOvation!—a small retail shop where their clients can sell their products. Providing this space increases sales and helps clients to gain experience in the retail markets before they expand into their own retail space.
When the Ms. Foundation for Women created its flagship Collaborative Fund for Women’s Economic Development (CFWED) in 1991, its goal was to provide crucial support to organizations across the country that help low-income women to start and expand microenterprise, community-based and cooperative businesses. Since then, CFWED has advanced the field of women’s enterprise development by partnering with 40 foundations, corporations and individuals to leverage $12 million in support of grassroots women’s organizations across the country. Most recently, the foundation and its donor partners have funded nine organizations throughout the country that are working with women entrepreneurs to increase business growth and business income.
Having helped many women to start businesses in the U.S., the microenterprise movement is now poised to go to its next stage: helping women to move permanently out of poverty, by cultivating businesses that are profitable enough to provide healthcare and build long-term assets. For America Ducasse and women all over the country, entrepreneurship is no longer an unreachable dream saved only for those with wealth and capital; it’s a dream-fulfilling reality, helping them daily to improve their lives and their communities.
