It has been a promising decade for micro, small, and medium size enterprises (MSMEs), particularly for women entrepreneurs globally. World Bank data shows that women represent 38 percent of sole proprietors, up from 32 percent a decade ago. Sub-Saharan countries, such as Rwanda and Zambia, achieved increases of 9 and 16 percent, respectively. Account ownership has also improved in sub-Saharan Africa, with promising improvements in mobile money usage and account ownership among women, although significant gaps remain.

As these and other studies indicate, women continue to face obstacles that hinder their ability to develop the management and financial skills necessary to grow their businesses. This is especially true for women compelled to entrepreneurship by necessity, many of whom are unprepared to start and run businesses. Addressing the needs of women-owned MSMEs requires a multifaceted approach that acknowledges and incorporates differences in business maturity, entrepreneurial capacity, and unique sectoral requirements.

In Ethiopia, though MSMEs are recognized as a key driver of productivity and economic growth, microenterprises are often overlooked and seen by traditional service providers as too risky, difficult, and expensive to serve. Empirical data corroborates what anecdotal evidence suggests — that microenterprises continue to serve as fallback alternatives and a safety net for many low-income households, underscoring the important contributions these businesses can make to the financial resilience and economic stability of poor households.

Momentum is building, but barriers remain

Donor-funded programs and investment in youth- and women-led businesses have expanded in Ethiopia, including the African Development Fund’s $42.86 million grant to support agricultural small businesses and the IFC’s $20 million trade finance guarantee facility. However, not all efforts are intentionally designed for the smallest enterprises or with women’s realities in mind, which include childcare, digital onboarding, and limited access to services.

These realities are exacerbated by persistent structural barriers, including a lack of collateral, as women often do not own land or assets in their name, have limited financial and digital capabilities, and face restrictive social norms that hinder their mobility and decision-making power. For example, in some parts of the country, women’s ability to participate in income-generating activities is restricted to their homes, and only about 58 percent of women in Ethiopia have access to the internet.

Additionally, despite an overall increase in licensed businesses in the country, women-owned businesses are still less likely to be licensed — only 15 percent of female entrepreneurs operate with a business license compared to 37 percent of male entrepreneurs. This further impedes women’s access to cheaper capital, larger markets, and opportunities.

Catalyzing change through integrated solutions

Driving impact and tangible, lasting change requires approaches that tackle these long-standing issues on multiple fronts. Interventions must go beyond creating appropriate products and incorporating other necessary elements that can help women overcome the persistent barriers they face, such as access to appropriate peer support networks, tools, and skills that enhance their existing capabilities. Service providers must seek to incorporate strategies to build trust and confidence in — and meaningful opportunities for — using digital products and services:

• Facilitating digital adoption and growth opportunities

Business management and digital skills are important cornerstones for participating in income-generating activities and the success of MSMEs. Accion’s recent engagement in Nigeria highlighted two intrinsic catalysts that encourage low-income women to adopt digital tools for business use: desire and capability. Women entrepreneurs who express a desire to embrace digital solutions can unlock growth and scale their businesses when equipped with the capabilities to overcome the social and economic barriers that restrict their adoption.

• Democratizing access to essential knowledge

Moving beyond in-person training to non-traditional delivery approaches offers greater flexibility for women entrepreneurs. Individual self-paced learning utilizing print materials, interactive voice response systems, peer learning structures, and increasingly accessible digital platforms (even via basic mobile phones) helps accommodate limited time due to caretaking and other domestic responsibilities. Program partners or service providers that offer flexible learning options signal respect for customers’ realities, fostering trust and engagement, and can include more hard-to-reach and hard-to-serve customers.

• Refining and iterating on service design and delivery

The support model we created for Nigerian women entrepreneurs embedded adaptive mechanisms to respond to their evolving needs. As the women interacted with our implementing partners’ tools and platforms, we analyzed their engagement data and used the insights to refine and iterate service design and delivery, ensuring it remained relevant to the customer throughout their growth journey.

Support models should be dynamic, with the ability to identify and design appropriate value propositions and solutions for the distinct challenges and opportunities businesses face at each stage of their growth. For early-stage enterprises, barriers to entry, including complex business formalization processes and a lack of basic business management skills and business advisory support, must be addressed first. As these microbusinesses stabilize and grow, their needs shift to accessing more markets, capital, and technology to scale and become more efficient.

• Ecosystem strengthening and collaboration

Ecosystem actors, such as the World Bank’s Gender Innovation Lab (GIL) and the Network of Ethiopia’s Women in Finance (NEWFin), continue to play a pivotal role in shaping evidence-based policy dialogue that focuses on the inclusion of women in economic or income-generating activities. GIL’s research in Ethiopia highlights how standalone interventions have limited impact without the combination of an enabling environment, access to finance, markets, peer networks, business advisory support, and gender-intentional delivery approaches.

Programs that take a holistic approach and are anchored by strong ecosystem collaborations are more likely to succeed in boosting women-led businesses and strengthening their resilience. Accion’s recent work to enhance the livelihoods of refugee women entrepreneurs in East Africa took a coordinated, market-led approach to enable their access to finance and functional marketplaces, while building their digital trust and creditworthiness. The program’s promising results are fueling an expanded new phase that brings in new service providers, innovative solutions, and interventions to support thousands more refugee women.

Building on experience to support Ethiopian women

These experiences and insights are shaping Accion’s new program in Ethiopia. With support from Jersey Overseas Aid, Accion is working with leading innovative partners in Ethiopia to empower and support women-led entrepreneurs. Along with partners such as Jemla, Kifiya, and Lersha, Accion is delivering tailored interventions that help Ethiopia’s women-owned businesses run, buy, and sell better; providing women with access to meaningful digital financial and non-financial services, as well as the skills, tools, and support network to use them responsibly. Accion is also providing technical assistance to local partners to strengthen their internal capabilities and continuously improve their ability to serve women entrepreneurs sustainably over time.

In these early stages of implementation, we are seeing high interest from women retailers and smallholder farmers who are participating to benefit from tailored customer engagement models and access to platforms. These efforts are enabling them to build readiness and creditworthiness that enhance their visibility within the financial sector, run their businesses better, and navigate formal financial systems and participate in the digital economy.

This strong initial response affirms the demand for integrated support and the opportunity to achieve meaningful impact — a demonstration model that we hope to see replicated across multiple markets and partners.