Small business, big impact: The transformative power of women-led enterprises

In the corner by one of the many potted plants, three Vietnamese women sit around bowls of steaming noodles and dumplings, engrossed in discussion. Despite the noise and chaos of the traffic outside, it’s peaceful in this small, cosy vegetarian restaurant tucked away in Hanoi’s Old Quarter. Sounds of conversation and laughter grow as the restaurant fills up with the lunch crowd.

The handmade menu tells the owner's story. She opened the restaurant during the COVID-19 pandemic with a desire to provide healthy, nourishing food sourced from local producers. As the manager of a small business, the owner faces multiple challenges and fierce competition (as she later tells me), but the restaurant is thriving and I wonder, what is the recipe for her success? What draws all these customers and me, a foreigner in Vietnam, time and again to this restaurant over more familiar big chain names? Is it just the papaya salad – really, the best I’ve ever eaten – or is it something else that only a small business has?

Small businesses are the hearts and souls of communities. Your local barber and corner stores offer more than just transactional interactions for essential products and services. They are places where people listen to your everyday problems and foster a sense of belonging. What’s more, there’s a one in three chance that these micro, small and medium-sized enterprises (MSMEs), like the one I’m lunching in, are led by women.

There are more women than ever in business, yet most have only three-quarters of the legal rights that men have when it comes to career, finances and work-life balance – this is despite the fact that women-led businesses are vital for their reinvestment into household incomes and national economies and for their transformative power. The latest evidence on women-led businesses finds that they reduce poverty, drive job creation, spark innovation and contribute to safer, greener and more vibrant communities, ensuring that everyone thrives collectively. These women-led enterprises are regenerative forces – building business communities and hiring local workers. Local economies cannot succeed without them.

“Women on their own face many obstacles. However, if we build a community of people who inspire us and support us, we can achieve so much…. We can do things together that we could never accomplish alone,” says Violeta Pacheco Mejía, an entrepreneur in Lima, Peru.

Her eco-friendly alpaca and cotton clothing company, Tejidos Peruanos, is based in Villa El Salvador, a historically disadvantaged neighbourhood in Lima. Her business has a reputation for being a place where women help women succeed and where the community makes the impossible possible. Pacheco Mejía set up her company in Villa El Salvador to make it more accessible to talented workers living in the area. In addition to having a largely female work staff, to give parents flexibility and peace of mind, Tejidos Peruanos offers safe, on-site childcare for employees. Tejidos Peruanos and Pacheco Mejía are prime examples of how women entrepreneurs reinvest in their communities, hire more women and give hope to other marginalized populations.

It has taken Pacheco Mejía 18 years of hard work and passion to create the business of her dreams — impactful and profitable. Yet, it was only in this last year that Pacheco Mejía, through her participation in CARE’s Ignite and Strive Women programmes – both supported by the Mastercard Center for Inclusive Growth – was finally able to get a bank loan in her own name.

“Tejidos Peruanos is the dream of 14 women,” says Violeta, “We have gone through many difficulties, but we have been able to move forward despite them. We have realized at this point that if we want to keep moving forward, we must keep preparing and training – not just me, but the whole team. This is a dream that we dream together.”

Despite the creativity, resilience and leadership demonstrated by Pacheco Mejía and millions like her, women entrepreneurs face outsized barriers and constraints – including access to credit – that impede their growth and deteriorate their confidence.

The women entrepreneurs we work with through CARE’s programmes are not willing to wait. They want to grow their businesses and they have the skills and confidence to do it. Our recipe for building a supportive ecosystem – one that values the contributions of women – works with local partners to design policies, products and programmes. Together, we design tailored financial services, alongside training and business networks, with outreach campaigns to challenge harmful gender norms.

Policymakers, businesses, banks, community leaders and individuals have a role to play in unlocking women’s economic power, valued at $10 trillion annually. We need whole system change that includes comprehensive macroeconomic reforms, fairer tax systems and recognition of the care economy. We need localized women-centred financial products and entrepreneur support systems to create more equitable economies for all marginalized groups, including women.

As we commemorate MSME Day let us recognize, celebrate and promote the women-led micro and small enterprises that are the lifeblood of our communities. Here’s how you can show your support and make an impact:

• Commit to intentionally shopping at women-led small businesses and spread the word about them to friends and family or on social media.

• If you are a business owner, invest in, work with and/or mentor women entrepreneurs.

• If you are a financial service provider, design client-centred solutions that prioritize and champion women and other marginalized groups.

• If you are a policymaker or advocate, champion policies and programmes that recognize and strengthen the central role that women entrepreneurs play in society.

By supporting the growth and resilience of women-led small businesses, we strengthen the invisible bonds that connect us. This helps unique and vibrant places thrive, like the Vietnamese noodle café in Hanoi, and moves us towards a feminist future where equality and inclusivity become a lived reality.