In rural India, two small business owners, Rekha and Jaya, highlight the disparities in entrepreneurial success despite similar initial conditions. While Rekha plans to expand her stall due to a steady customer base, Jaya faces challenges with dwindling sales and mounting debt. Both women obtained loans from the same financial institution at the same time, but their outcomes differ significantly.
Globally, women entrepreneurs are transforming economies across various sectors, yet many still encounter obstacles that limit their potential. Empowering women through finance not only unlocks individual opportunities but also enhances public investment in education and infrastructure. Five persistent challenges remain: limited access to equity, inconsistent training, data gaps, restrictive social norms, and exclusionary financial systems.
In October 2024, the World Bank Group introduced its Gender Strategy for 2024-2030 aiming to enhance economic opportunities for women by facilitating capital access for 80 million more women and women-led businesses. Understanding who receives capital and under what conditions is crucial for achieving this goal.
Financial literacy plays a key role in making capital effective. Many women avoid applying for loans due to low financial literacy (Morsy 2020). The World Bank addresses this by linking digital cash transfers with skills training and coaching to equip women with tools for sustained economic opportunities.
Research indicates that participation in financial literacy programs increases women's likelihood of saving, timely loan repayment, and holding insurance. Effective programs share three characteristics: community-based experiences, involvement of current or former entrepreneurs as examples, and allowing participants to bring a friend for support during training.
Support systems such as family and community play an essential role in successful entrepreneurship. Research shows that family support and social capital contribute to better financial outcomes. Women's entrepreneurship is shaped by their environments rather than occurring in isolation.
Flexible finance options can enable success by designing loan products suited to small businesses' cash flows. During the COVID-19 pandemic in India, entrepreneurs with flexible repayment options showed better repayment rates compared to those with standard loans (Desai et al., 2025).
Flexibility allows business owners to adapt during disruptions beyond crisis management. Offering contract choices, payment delays, and alternative credit lines improve outcomes without increasing default rates—crucial for entrepreneurs in volatile markets with seasonal cash flows.
These conclusions align with findings from the Women Entrepreneurs Finance Initiative’s (We-Fi) evidence paper on supporting women entrepreneurs in developing countries.
Rekha's and Jaya's scenario mirrors millions of real women's experiences traditionally excluded from financial participation. Financial inclusion involves more than capital access; it entails rethinking lending as part of broader support including education, mentorships, family engagement, and tailored products addressing women's needs.
Initiatives like We-Fi alongside IFC investments and MIGA guarantees illustrate how the World Bank Group supports data-driven solutions empowering high-growth sector women.
For further inquiries contact Anna Fruttero along with Ashish Desai among others involved in the report.