Segmentation of Women-Led Nano and Micro-enterprises: A Guide to Knowledge Resources

For decades, the conversation around micro and small enterprise (MSE) lending has often lumped these businesses together as one big group. But the reality is quite different - MSEs make up the vast majority of businesses in emerging markets and have a wide variety of financing and non-financing needs. When we look at broad indicators, like the estimated MSE credit gap, we miss the nuance of the smaller groups within the MSE category. This generalization has created blind spots for the very enterprises that need the most attention, including women-led businesses and the smallest players in the field - nano and micro-enterprises.

Nano and micro-enterprises are often found in niche markets, playing a crucial role in local economies by creating jobs and generating income, especially in underserved communities. As the global financial and development community focuses more on these smallest businesses - and particularly women-led nano and micro-enterprises - it is becoming clear that high-level statistics are not enough. We need a better grasp of the landscape:

• Who are these women nano and micro-entrepreneurs? 
• What financial and non-financial services do they need to thrive? 
• And what resources are already available to them? 

Without answers to these questions, efforts to support them will fall short, limiting the potential to truly improve their livelihoods and the well-being of their employees.

CGAP is working to shed light on these questions and determine how to develop targeted strategies to address the gaps. This guide aims to share some of the key resources the CGAP team has found useful in their research.

What is the purpose of this guide and how can it be used?

This FinDev Guide is intended to serve as a resource for the financial inclusion community and anyone interested in understanding the different segments of nano and micro-enterprises and what they need to grow and sustain their livelihoods. We hope these resources will be valuable to other researchers, donors, investors, regulators and policymakers interested in taking a data-based approach to addressing the needs of women-led nano and micro-enterprises (W-NMEs).

The main objectives of this guide are to:

• Provide guidance on specific dimensions along which players in the ecosystem can conduct effective segmentation - at the country level and globally - for the purpose of designing and providing tailored credit products for W-NMEs.
• Highlight the specific needs of W-NMEs and the benefits and drawbacks of different approaches that can be used to better serve these enterprises.
• Support donors, policymakers and advocacy organizations with information they can use to advocate for policies to help these enterprises become more financially included and economically empower the women running them.

Resources on women-owned nano and micro-enterprises

Literature Review: Micro and Small Enterprise (MSEs’) Financing in Kenya, Uganda and India
Aug 2024 | CGAP Background Documents

The Literature Review and Data Library provide an overview of the current information available about nano, micro and small enterprises and the various studies available on the segments within these groups. 

• The Literature Review focuses specifically on women-owned nano and micro-enterprises in three countries: India, Kenya, and Uganda. It points readers to resources that shed light on possible approaches to segmentation that can enhance the understanding of these enterprises and, ultimately, unlock more capital and bridge the gap between their financial and non-financial needs. 
• The Data Library is a comprehensive collection of data sources – studies and publications - on nano, micro and small enterprises and specifically those focused on enterprises owned and run by women. In addition, the data library will provide a view of segmentation studies in the MSE sector. 

The following publications from Kenya, India and Uganda are a sample selected from the list of almost 200 resources included in the Data Library. For many more resources, categorized by country, type of data, sample size, sector focus, availability of underlying data and much more, please review the Data Library.

MSE Tracker Survey WAVE II: Follow-up on 2019 and 2021 FinAccess Household Surveys (Kenya)
FinAccess | Aug 2023 

Kenya Country Data Overview: Data from the Small Firm Diaries 
Financial Access Initiative (FAI) | May 2023 

Financial Inclusion for Woman-Owned Micro, Small & Medium Enterprises (MSMEs) in India 
IFC | Aug 2019 

Impact of Access to Finance on Nano Enterprises  (India)
LEAD at Krea University (IFMR) | Jan 2023 

National Small Business Survey of Uganda 
FSD Africa | Mar 2015