October 18, 2022
Bridging the Digital Divide for South Asia’s Women Entrepreneurs: How Meaningful Connections Can Drive Women Entrepreneurs to Success

Entrepreneurs are more likely to succeed when they have a strong support system. From the ability to forge new relationships to gaining access to financial and digital services, networks empower entrepreneurs to pose questions, take risks, and ultimately grow their business. In South Asia, a combination of government policies and a growing information technology (IT) sector, has increased women’s participation in startup incubator and accelerator programs. However, South Asia’s women entrepreneurs (WEs) continue to remain an underdeveloped market due to a combination of socio-economic, political, and cultural factors.

To further understand the challenges faced by WEs looking to grow their business, Digital Frontiers’ South Asia Regional Digital Initiative (SARDI), implementing activities under the Digital Connectivity and Cybersecurity Partnership (DCCP), conducted a cross-regional scoping study across Bangladesh, India, Nepal, and Sri Lanka. The study demonstrates that there is steady growth in the number of female co-founders of digital startups and more women joining digitally enabled businesses. However, the study provides significant clues to explain why this start up activity has not yielded similar growth with later stage WEs. In directly speaking with successful WEs as well as private and public sector stakeholders in the region, SARDI researchers identified that many of the programs and initiatives focused on women-owned startups did not provide adequate support as businesses matured. A total of 47 in-depth interviews revealed the lack of mentorship, peer support, and pro-WE investors as consistent challenges facing WEs as they struggle to grow and mature their businesses in South Asia.

Battling More Than Just the Digital Divide: Barriers to Success

    1. Lack of mentorship and support for WEs in tech. During the interviews, respondents talked about the need for women entrepreneur networks, particularly in the digital sector. Most of these women entrepreneurs are held back by deeply patriarchal societies – a common feature across all four countries in the study. This means that they often lack support from both family and extended social networks and expressed that mentorship from other WEs can be the difference between business success and failure. Respondents emphasized the need to build a strong cohort of WEs – not just a peer support network – that could use its collective power to raise more funding and explore partnership opportunities across the region. A respondent from Bangladesh added that “the ecosystem is only enabling for early-stage entrepreneurs but not for those that require more investment.”
    2. Lack of women role models. Across the four countries, respondents cited a lack of women leaders to function as role models, particularly in the field of digital technologies. Respondents in Nepal and Sri Lanka explained that the number of women-owned startups far exceed the number of women mentors. The mentors who do exist are particularly impactful since their stories of struggle and success in combating cultural and gender norms provide inspiration as well as instruction.
    3. Barriers to funding. WEs in South Asia – in far greater numbers as compared to their male counterparts – faced compounded challenges when looking for financing because of widespread gender bias. This can be either overt or hidden, as in funding application questions that inadvertently favor men. Most investment decisions are made by men who have a limited understanding of the needs and challenges specific to women entrepreneurs. Evidence of the disproportionate access to finance for WEs can be seen in India where less than 6% of all start-up investment between January 2018 and June 2020 went to companies with at least one female founder. The study also revealed that funding barriers were exacerbated by the lack of women networks and mentorship.

Developing Solutions to Respond

What was abundantly clear through SARDI’s research was the potential benefits of a cross-regional WE network that could provide mentoring, peer learning, and support for later-stage WEs looking to expand. This would also help WEs identify training networks, unlock potential funding opportunities, build potential partnerships, create pathways for better market access, and create localized support structures. Specific recommendations that emerged through SARDI’s research included:

    1. Linking WEs to informed gender lens investors. Gender lens investors understand and prioritize unique requirements and challenges facing women-owned startups. They are most likely to understand how the unique needs of these entrepreneurs grow beyond startup and can help them tackle diverse challenges including financing, human capital, market access, etc. As explained by Jennifer Buckley, Managing Director of Sweef Capital during a recent SARDI event:
    1. “Much of the current thinking around women entrepreneurs’ access to capital is really focused on debt strategies. But what we’ve found in Southeast Asia is when we come in as a sounding board for these companies, the best way to achieve alignment is through equity – coming in as a shareholder alongside these entrepreneurs as a partner alongside them building their businesses.”
    2. Creating linkages between gender lens investors and women entrepreneurs would build awareness and capacity for investors, incubators, and accelerators to engage WEs seeking investment. This would contribute to a more sustainable and supportive environment for WEs beyond their initial startup phase.
    3. 2. Building the awareness and capacity of women entrepreneurs. WEs can be effective advocates in engaging their community leaders and governments to foster an enabling environment that supports their enterprises. Providing WEs with advocacy knowledge and tools can build long lasting capacity in local environments to encourage and sustain small and medium-sized women-owned businesses.
    4. 3. Creating a supportive and collaborative network of entrepreneurs. Bringing together like-minded business owners to collaborate – in person or virtually – provides them with agency to build shared understanding and self-styled support structures. This will enable peer-to-peer learning and greater opportunities for mentorship so that women can learn from other women who have faced and overcome similar challenges.

What’s Next: Designing to Strengthen Future Opportunities for Women Entrepreneurs

In direct response to the challenges faced by WEs, SARDI launched the Strengthening Women in Tech in South Asia Initiative, a comprehensive cross-regional venture, which will offer a robust, vibrant, and sustainable network for women entrepreneurs in digital and digitally enabled businesses in the South Asia region. To offer this network, SARDI is partnering with a consortium led by Accelerating Asia Pte Ltd and including SAFAL Partnership, Bangladesh Angels, India Accelerator, and Lankan Angels, selected through the activity’s Strengthening Symposium; a four-day virtual event which connected a consortium of international organizations, local accelerators, and industry associations to ultimately design and implement this critical regional effort. The symposium earlier this year offered a glimpse of the power of bringing together WEs and local organizations.

Heading into the implementation phase, the network will foster secure finance for women entrepreneurs, increase digital skills, and sustain partnerships and engagement across borders for those looking to grow their business. The network will also partner with regional and local organizations that run investment and entrepreneurship programs, enabling access to and engagement with local, regional, and global markets. By raising awareness in the impact investment space of more gender-friendly lending practices and through effective engagement with the digital policy environment, the SARDI initiative’s network seeks to propel women entrepreneurs to grow their businesses safely and sustainably.

SARDI is an activity under and funded by the Digital Connectivity and Cybersecurity Partnership (DCCP), a whole-of-government initiative led by the Department of State (DoS) and co-chaired by the U.S. Agency for International Development (USAID) to promote an open, interoperable, reliable, and secure digital economy.

This piece was written with support from Acute Incite.