The Women’s Leadership in Small and Medium Enterprises (WLSME) trust fund is a partnership with the U.S. Agency for International Development (USAID) that aims to increase the entry and growth of women-owned and women-managed small and medium enterprises (SMEs) in developing countries. The trust fund (2011-2016) co-finances rigorous evaluations of interventions in 12 countries across Africa, Central Asia, Middle East and the Caribbean, the Middle East and North Africa, and South Asia.
Each program is individually tailored to the country context, and the interventions include business development skills training, microfinance facilitation, and non-cognitive skills training. Total financing is $3.5 million.
Female entrepreneurs make significant contributions to economic growth and to poverty reduction around the world. Data from over 140 countries show that there are around 9.34 million women-owned SMEs.
While the number of women operating their own business is increasing globally, women continue to face huge obstacles that stunt the growth of their businesses, such as lack of capital, social norms and time and skill constraints. The effect of these constraints are detrimental to developing countries. Recent estimates show that the impact of gender gaps on aggregate productivity and resource allocation amount to between 4 percent and 7 percent income losses (in GDP per capita) across developing regions.
Creating more opportunities for women entrepreneurs to engage successfully with their customers and markets can yield high dividends for women, their families and communities, and deliver society-wide gains as a result of increased productivity and more inclusive economic growth. The WLSME invests in rigorous evaluations of innovative interventions to help to answer the question: what works to promote and support women-led SMEs?
The WLSME trust fund aims to make important contributions to the field of female entrepreneurship by:
- Filling data gaps with surveys designed to capture gender differences in firm characteristics and performance in 12 countries across five regions. It also aims to expand data on women-led SMEs where the country context allows.
- Building rigorous evidence that can be used to answer questions emerging from the recent research and previous experimental interventions.
Different types of entrepreneurship support interventions are tested to see which provide the most effective services for particular groups of male and female entrepreneurs. They include: training in “soft skills” (leadership, negotiation, etc.); mentoring and other support mechanisms that can build aspirations and self-efficacy; as well as more traditional business training and supply chain interventions.
Most grants are given to examine the impact of interventions that are part of large scale projects, increasing the likelihood for generating country demand and operationally relevant lessons for replication or scale-up. Evaluations also attempt to address some of the methodological shortcomings of previous impact evaluations of programs for female entrepreneurs, for example by using larger sample sizes, emphasizing relevance and delivery of training and selecting entrepreneurs with higher baseline abilities and skills to ensure lower attrition as well as higher uptake of training and services.