7 March 2017

Women entrepreneurs cannot survive on grit alone: Mastercard

Strong supporting conditions such as access to financial services and ease of doing business pave the way for progress in businesses owned by women, according to findings from the inaugural Mastercard Index of Women Entrepreneurs*. These enabling conditions are pivotal in overcoming the two main obstacles that most discourage women from becoming entrepreneurs – cultural biases and fewer opportunities for their advancement, say the research.

Overall, developed markets top the index, led by New Zealand (74.4), Canada (72.4) and the US (69.9). These countries have the strongest conditions that support women business ownership, such as robust small- and mid-sized business communities, a high quality of governance and ease of doing business.

Mastercard Index of Women Entrepreneurs – Top 10 markets with the strongest supporting conditions and opportunities for women to thrive as entrepreneurs

New Zealand – 74.4
Canada – 72.4
US – 69.9
Sweden – 69.6
Singapore – 69.5
Belgium – 69.0
Australia – 68.5
Philippines – 68.4
UK – 67.9
Thailand – 67.5

On the other hand, lower-income economies such as Bangladesh (31.6%) and Vietnam (31.4%) have some of the highest percentages of women entrepreneurs, driven mostly by necessity as opposed to being inspired by business opportunities.

Women business owners as a % of all business owners – Top 10 markets

Uganda – 34.8%
Botswana – 34.6%
New Zealand – 33.3%
Russia – 32.6%
Australia – 32.4%
Bangladesh – 31.6%
Vietnam – 31.4%
China – 30.9%
Spain – 30.8%
US – 30.7%

"The prevalence of ambitious, resourceful women should be regarded as a prime business opportunity. As society addresses existing cultural bias, we will do our part to help create those conditions that will strengthen and fuel the foundation for personal and economic growth,” said Martina Hund-Mejean, Chief Financial Officer, Mastercard.

“By increasing access to critical networks, our study shows that women are more able to recognise their full potential, achieve their goals and ultimately accelerate more inclusive growth. We have a fantastic opportunity to address cultural and organisational issues and further empower women leaders,” said Ann Cairns, President, International Markets, Mastercard.

The index suggests that countries with enabling conditions foster more Opportunity-Driven Entrepreneurs (driven by desire to progress) while countries with less conducive supporting conditions tend to breed more Necessity-Driven Entrepreneurs (driven by need to survive).

What spurs female entrepreneurship in developing markets? The research calls it 'grit'. Bangladesh (31.6 percent), Vietnam (31.4%) and China (30.9%) made the list of the top 10 markets for proportion of women business owners as a percentage of total business owners. In these economies, women capitalise on business opportunities that do not rely on knowledge or innovation assets alone.
However, successful businesses cannot survive on grit. To help women entrepreneurs thrive, they need access to financial services and products; ease of doing business; strong support for small and medium sized enterprises (SMEs) and quality governance. These factors were seen in the countries in the top five spots on the index.

There are other markets such as the Philippines (68.4, 8th), Malaysia (63.9, 25th), and China (61.3, 31st) where even though supporting conditions for entrepreneurs are not as conducive, yet the local entrepreneurship landscape is highly energised and vibrant with a very healthy perception of business opportunities and high regard for the status of successful entrepreneurs. Women entrepreneurs here are often driven by a strong desire to succeed.

The low scores of markets such as India (41.7, 49th) and KSA (37.2, 52nd) are indicative of the fact that cultural biases against women severely undermine their ability to rise to positions of leadership and take advantage of entrepreneurial opportunities.

According to the index, some of the biggest obstacles that hinder women from venturing into business include lack of financial funding/venture capital, regulatory restrictions and institutional inefficiencies, lack of self-belief and entrepreneurial drive, fear of failure, sociocultural restrictions, and lack of training and education. In nearly all of the 54 economies covered, at least one or more of these constraints are holding back the progress of women as business owners.

“While there is still work to do, it is encouraging to see New Zealand’s supporting conditions for women in entrepreneurship are the highest in the world,” says Peter Chisnall, Country Manager for Mastercard New Zealand and the Pacific Islands of New Zealand's No. 1 position. “It is clear that the solid economic stability of New Zealand, access to financial services, robust small and mid-sized business communities and ease of doing business helps provide opportunities for businesses owned by women.”

In New Zealand, the most significant barrier for women entrepreneurs is fear of failure, at 22%. This was followed by the SME employee turnover rate (16%).


Read the report

*The Mastercard Index of Women Entrepreneurs tracks female entrepreneurs’ ability to capitalise on opportunities granted through various supporting conditions within their local environments and is the weighted sum of three components: Women’s Advancement Outcomes (degree of bias against women as workforce participants, political and business leaders, as well as the financial strength and entrepreneurial inclination of women), Knowledge Assets and Financial Assets (degree of access women have to basic financial services, advanced knowledge assets, and support for small and medium enterprises), and Supporting Entrepreneurial Conditions (overall perceptions on the ease on conducting business locally, quality of local governance, women’s perception of safety levels and cultural perception of women’s household financial influence). 

The index uses 12 indicators and 25 sub-indicators to look at how 54 economies across Asia Pacific, Middle East & Africa, North America, Latin America and Europe, representing 78.6% of the world’s female labour force, differ in terms of the level of Women’s Advancement Outcomes, Knowledge Assets & Financial Access, and Supporting Entrepreneurial Factors.