New Delhi: Women entrepreneurs in low- and middle-income countries (LMICs) could boost global GDP by $5 trillion—equivalent to Japan’s economy—according to the Empowered or Undermined? Women Entrepreneurs and the Digital Economy report by the Cherie Blair Foundation for Women, Intuit, and the World Bank’s Women, Business and the Law project. Owning 47% of businesses in Latin America, 44% in East Asia and the Pacific, and 30% in Sub-Saharan Africa, women drive job creation and poverty reduction. However, systemic barriers like restricted finance access, complex regulations, digital exclusion, online harassment, e-commerce challenges, and mobility restrictions limit their impact.

The Economic Power of Women Entrepreneurs

Women entrepreneurs are vital to economic progress in LMICs, where their businesses serve as engines of job creation and community development. A 2019 study by the Cherie Blair Foundation and Boston Consulting Group estimates that enabling women to participate in entrepreneurship on equal terms with men could increase global GDP by $5 trillion. In Latin America and the Caribbean, women own 47% of businesses, making substantial contributions to regional economies. In East Asia and the Pacific, they account for 44% of enterprises, while in Sub-Saharan Africa, 30% of businesses are women-led. These ventures foster innovation, create employment, and reduce poverty, underscoring the critical role women play in driving sustainable economic growth. However, systemic challenges prevent them from fully realizing their potential, necessitating urgent action to address these barriers.

Systemic Obstacles Limiting Success

The report identifies a range of barriers that hinder women entrepreneurs, from financial and regulatory constraints to digital and safety challenges. These obstacles are deeply entrenched and require comprehensive policy interventions to overcome.

1. Financial Access Barriers

Access to capital is essential for business growth, but women in LMICs face significant hurdles. High borrowing costs, stringent collateral requirements, and limited financial literacy restrict their ability to secure loans or investments. The World Bank’s 2024 Women, Business and the Law report reveals that 96 out of 190 economies lack legal protections against gender-based discrimination in credit access. Additionally, the absence of government programs offering tailored financial support, such as microloans, grants, or business coaching, leaves women entrepreneurs underserved. This financial exclusion limits their ability to start, scale, or sustain their businesses in competitive markets.

2. Regulatory and Registration Challenges

Formalizing a business unlocks access to markets, resources, and legal protections, but nearly one-fifth of women entrepreneurs in LMICs cite costly and complex regulations as a major obstacle. Women are also more likely to face harassment or discrimination during official processes, such as applying for permits or loans, which discourages formalization. In some countries, outdated legal frameworks require women to obtain permission from a male family member to register a business, perpetuating gender disparities. These regulatory hurdles stifle business growth and deter women from participating fully in the formal economy.

3. The Digital Divide

In today’s technology-driven economy, access to digital tools is critical for success. However, 45% of women entrepreneurs in LMICs lack regular internet access, despite 92% owning a personal smartphone, due to high data costs and unreliable connectivity. The report highlights a 15% gender gap in mobile internet usage, with women less likely than men to leverage digital platforms like e-commerce, social media, or mobile money. This digital exclusion restricts their ability to reach broader markets, adopt productivity-enhancing technologies like artificial intelligence (AI), and compete effectively in the modern economy.

4. Online Gender-Based Violence

Online harassment is a pervasive issue that undermines women entrepreneurs’ engagement in digital spaces. The report reveals that 57% of surveyed women have experienced some form of online harassment, deterring them from fully utilizing digital platforms for business purposes. This gender-based violence not only limits their access to online markets but also poses significant safety concerns, discouraging women from leveraging the digital economy to grow their businesses and connect with customers.

5. E-Commerce Limitations

E-commerce platforms offer immense potential for expanding market reach, but women entrepreneurs face significant barriers to adoption. High costs, distrust in digital payment systems, and complex onboarding processes prevent many from participating in online marketplaces. These obstacles restrict their ability to tap into global markets and capitalize on the growing demand for digital commerce, further widening the economic gender gap.

6. Mobility Restrictions

Safety concerns and societal norms often impose mobility restrictions on women entrepreneurs. Many require accompaniment or special arrangements to travel for business purposes, while others face time constraints due to safety risks. These limitations hinder their ability to network, access markets, or engage in essential business activities, further constraining their entrepreneurial success and economic contributions.

The Economic Imperative for Empowerment

The case for empowering women entrepreneurs is both moral and economic. A $5 trillion GDP boost would transform global prosperity, create jobs, and reduce poverty on an unprecedented scale. The report highlights that women with reliable internet access are 2.5 times more likely to use AI tools, which enhance productivity and drive innovation. Similarly, women selling to male customers are three times more likely to receive digital payments, reflecting the demand for secure and accessible financial transactions. By addressing barriers to financial and digital inclusion, governments can unlock significant economic benefits for communities and nations alike.

Policy Solutions to Unlock Potential

To harness the potential of women entrepreneurs, the report proposes five key strategies for policymakers in LMICs and high-income countries to create an enabling environment for women-led businesses:

1. Reform Legal and Regulatory Frameworks

• Eliminate discriminatory laws: Abolish requirements for male permission to register businesses, ensuring equal access to entrepreneurship.
• Simplify registration processes: Reduce costs and bureaucratic hurdles to encourage formalization and business growth.
• Promote financial equity: Develop microloans and grants tailored to women entrepreneurs and prohibit gender-based discrimination in credit access.

2. Combat Online Gender-Based Violence

• Strengthen legal protections: Enforce laws against online harassment and ensure accountability for perpetrators.
• Regulate digital platforms: Implement measures to create safer online environments for women entrepreneurs.
• Promote digital safety education: Provide training on cybersecurity and online safety to empower women in digital spaces.

3. Bridge the Digital Divide

• Enhance connectivity: Expand affordable internet access and public Wi-Fi in underserved areas to ensure reliable connectivity.
• Subsidize technology: Offer financing programs for smartphones and data plans to make digital tools accessible.
• Improve rural infrastructure: Incentivize telecom providers to expand connectivity in remote regions, enabling women to participate in the digital economy.

4. Invest in Digital Skills

• Launch literacy programs: Equip women with skills to navigate digital platforms and leverage technology for business growth.
• Provide specialized training: Offer education on AI, e-commerce, and digital marketing to enhance productivity and competitiveness.
• Foster networking: Create mentorship and networking opportunities to help women connect with markets and resources.

5. Build Public-Private Partnerships

• Drive collaboration: Partner with tech companies and NGOs to fund and implement digital inclusion initiatives.
• Incentivize investment: Offer tax breaks for businesses supporting women-led enterprises, encouraging private-sector involvement.
• Develop financial products: Work with financial institutions to create accessible solutions tailored to women entrepreneurs’ needs.

A Call for Urgent Action

Women entrepreneurs in LMICs are demonstrating remarkable resilience and ingenuity, yet systemic barriers continue to limit their contributions. The digital divide, coupled with financial, regulatory, and safety challenges, threatens to stall economic progress. By investing in digital infrastructure, reforming legal frameworks, ensuring online safety, and promoting financial inclusion, governments can create an environment where women thrive as entrepreneurs.

The $5 trillion opportunity is not just about economic growth—it’s about building a more inclusive and equitable world. Policymakers must act swiftly to dismantle barriers and empower women entrepreneurs to drive prosperity, create jobs, and transform communities. A digital economy where women have equal opportunities is essential for sustainable global growth, benefiting not just women but society as a whole.

Frequently Asked Questions (FAQs)