Women and Franchising: A Tool to Enable Entrepreneurship Beyond Microfinance
Microfinance is a useful vehicle that supports women entrepreneurs, but it is not sufficient when considering the great potential women have to be successful business leaders and agents of change. Franchising is a different business model that has proved to be successful in catalyzing women into the workforce, empowering them with new skills and opportunities to support their family, and contribute substantially to their communities.
The Middle East Program and its director and moderator for the event, Haleh Esfandiari, hosted two speakers on the subject of franchising on May 4, 2010. Nadereh Chamlou is the Senior Advisor at the World Bank's Middle East and North Africa Region for Economic Sector Work and Knowledge and spoke extensively about the promise of franchising as a means to overcome the many challenges women face in starting businesses throughout the Middle East and North Africa.
Not only is microfinance often times insufficient for the growing number of educated, middle-class women entrepreneurs in need of larger loans, but women are also hamstrung by "cumbersome investment climates," which disproportionately impact their ability to start private enterprises. Further, gender discrimination manifests itself through corruption, less access to land and electricity, and the inability to acquire justice through proper legal channels. Franchising offers a potential avenue to reduce the impact of the barriers women entrepreneurs often encounter. Chamlou pointed out that specific sectors, such as medical labs, tourist services and agricultural supplies, can be identified for female franchising opportunities.
Similarly, Donna Sibley from Sibley International Corporation has been focusing on social franchising for more than 20 years. The social franchising model involves initial donor funding to support a business's start-up costs. These business ventures, which produce broad social benefits, are organized in such a way that they have multiple revenue streams and can ultimately become financially sustainable.
Sibley focused on her work on the USAID-funded Smiling Sun Franchising Program in Bangladesh that has been in operation since 2007. This project has grown to encompass 320 formal health clinics across all 61 districts of the country and has served over 28 million patients. This also includes more than 8,500 satellite clinics that operate outdoors in rural communities. Smiling Sun provides opportunities for women from all strata of society to gain training and subsequent employment. Half of the doctors at these clinics are women, as well as most of the nurses, paramedics, and community service providers.
While microfinance has received prominent attention for its ability to provide credit to poor, entrepreneurial women, franchising can also serve as a successful model to provide education, training, and employment for women in developing countries. By entering into a business that has a larger infrastructure of resources, branding, and revenue sources, women reduce potential risks associated with new enterprises, products, and unreliable markets. As Sibley noted, "franchising is about the replicability of a model that works."
By Joshua Reiman, Middle East Program
Haleh Esfandiari, Middle East Program