Role of Inclusive Formal Financing Infrastructure for Promoting Women Entrepreneurship in Developing Economies

Abstract

Women in developing economies play a crucial role in propelling socio-economic transformations through their involvement in entrepreneurship. In Nigeria, they contribute over 30% to the GDP and generate more than 40% of jobs in Micro, Small, and Medium-sized Enterprises. However, women-led organizations encounter challenges such as limited growth prospects and higher closure rates compared to those led by men. Women's entrepreneurship in Nigeria has resulted in a 23.3% reduction in issues such as unemployment, drug trafficking, etc. Yet, the absence of a suitable financial system confines women to reproductive roles, hampering job creation and exacerbating poverty rates. A UN study emphasizes the significance of women in rural economies and highlights the obstacles they encounter in accessing formal financing. The purpose of this study is to raise awareness about the opportunities provided by informal finance and the challenges encountered by women-led enterprises in accessing funding.