As Albert Einstein stated, the significant problems people are facing can only be solved by a higher level of thinking than those problems. Probably, Einstein’s statement is relevant in describing the critical role that microfinance play towards the empowerment of women. The reason is that the empowerment of women entails challenging the cultural values and norms by providing them with access to financial services and recognition in society. Microfinancing is considered a crucial strategy in attaining three objectives of millennium development goals of promoting women empowerment and gender equality (Bruton, Khavul, Siegel, & Wright, 2015). The effects of microfinance og women empowerment through entrepreneurial activities are examined in the current study.
1.1.1 Women Empowerment
Women empowerment in this context improves the capacity of women to make choices of transforming their lives for better and attain desired outcomes. The process involves building a collective and individual assets and enhancing fairness and efficiency of institutional context governing the exploitation of these assets. Weber and Ahmad’s (2014) study noted that any societies practicing gender discrimination pay dearly through lower economic growth, higher poverty, poor governance, and lower living standards. There is also a connection between empowerment and community-driven and social capital development, but these concepts are regularly confused. However, empowerment can be a process and also an outcome while social capital is the organization of the society through networks and norms, which foster cooperation and coordination for the mutual benefit. Community driven development is the method for developing organizations to offer community groups control of decisions and resources. By nature, community-driven development is an activity. The three aspects are connected to build a social capital that facilitates the empowerment of individuals and groups.
Women empowerment entails enhancing the capacity of women to engage in strategic life choices they had been not been enjoying previously. Women’s empowerment has varied benefits, poverty reduction being the critical benefit because, unlike males, women’s income is mostly channeled in improving their households (Agier & Szafarz, 2013). Unlike men, women are considered more responsible for using loans and profits to benefit their families. By engaging in entrepreneurial activities, women can contribute directly and indirectly to society. The number of women engaging in entrepreneurial activities has grown consistently over the years as more women engage in entrepreneurial activities. However, there is a significantly fewer number of women than men entrepreneurs (Weber and Ahmad, 2014). Despite accounting for the most number of an impoverished population, women entrepreneurs account for about 30% of the total entrepreneurs globally (Rhodes, 2015). Besides, a significant proportion of women, mainly from low-income households, face several barriers, such as social norms and personal factors that prevent them from engaging in entrepreneurial activities (Tlaiss, 2014). Therefore, it is essential to understand key hindrances to women entrepreneurship from low-income families in the U.K.
Social norms and cultural factors determine is what shapes the gender roles within the household and community which in return shapes the ability of women to access family resources and use money (Baum, Frese, & Baron, 2014). Besides social norms, limited access to the mainstream banking system for loans has further heightened financial exclusion for women in developed and developing countries (Prosser, 2018; Hamilton, 2011). consequently, a significant proportion of women cannot engage in business activities, among other empowerment programs (Carter et al. 2015). In light of this argument, microfinancing provide women with an avenue to access credit and establish enterprises among accompanying financial services such as access to credit, mentoring, mobilization of savings, training on management skills, insurances, and money transfer services
1.1.2 Women Microfinancing
Microfinancing women are recognized as strategies for improving women empowerment through access to financial services they use to invest in enterprising activities. Microfinancing is recognized worldwide as a tool for reducing poverty through women empowerment (Bruton, Ketchen Jr, & Ireland, 2013). Microfinance provides multiple programs aimed at improving empowering women. The programs include easy access loans and financial services such as training on business management skills (Keith, Unger, Rauch, and Frese, 2016). As noted by Abreu and Grinevich, (2013), there has been a surge in the number of women entrepreneurs within the U.K. to reach more than 650,000 enterprises being established annually. A considerable proportion of these enterprises are sole proprietorship and family-owned enterprises. However, a significant proportion of women enterprises fail to pick in the initial stages primarily due to the inadequacy of resources, including funds to channel to essential areas like technology and marketing needed to sustain the newly established enterprise (Cope, 2011).
1.2: Problem Statement
Studies have shown that women make excellent entrepreneurs, which can only be possible if they are empowered (Weber and Ahmad, 2014). By engaging in entrepreneurial activities, women will contribute both directly and indirectly to society through economic growth and development. Empowered with are more likely to improve their households’ livelihoods than men because they spend earnings mostly to benefit the family. These translate into improved standards of living through education of children and proper nutrition, among other benefits. If empowered by improving their access to financial services like skills training, capital, and others, women can positively improve society, households, and the economy in general.
Despite accounting for the most number of an impoverished population, women entrepreneurs account for only a third of the world’s entrepreneurs (Rhodes, 2015). Most women do not have access to financial services which are necessary for their empowerment due to barriers inherent in social norms and outdated cultural beliefs (Carter et al., 2015). Therefore, microfinancing offers a good avenue for women to gain access to financial services for their entrepreneurial activities. There are notable MFI activities in the U.K. today targeting women and marginalized groups and individuals such as women and immigrants.
MFIs and women entrepreneurship is an exciting area for business students given the increasing role of women at the society and household level. Even though SMEs and MFIs activities are steadily growing in the U.K, the role of microfinancing to women empowerment and entrepreneurship within is still not known. Instead, most scholars in this area focus on microfinancing activities in developing countries. The current study set to address this empirical gap by determining the MFI’s contribution towards women empowerment through the support of their income-generating activities.
1.3: Aims and Objectives
The dissertation work aimed to examine the contributions of heightened microfinancing activities to women empowerment through entrepreneurship in the United Kingdom.
Specific Objectives
- To identify different types of services offered by U.K. microfinancing institutions to empower women entrepreneurship
- To provide a critical assessment of how different services provided by MFIs in the U.K. are influencing women empowerment.
- To investigate essential factors that are hindering women entrepreneurs in the U.K. from accessing financial services from microfinance institutions
- To suggest fundamental strategies for improving MFIs services offered to promote women entrepreneurship.
1.4: Research Questions
- What types of services are offered by U.K. microfinancing institutions to empower women entrepreneurship?
- How are these MFIS services influencing women empowerment in the U.K. to engage in entrepreneurship activities?
- What factors are hindering women entrepreneurs in the U.K. from accessing financial services from microfinance institutions?
- What strategies can be used to improve MFIs services offered to promote women entrepreneurship?
1.5: Research hypothesis
The study hypothesized that microfinancing services have a significantly positive correlation correlated with U.K. women empowerment and entrepreneurship. The study tested the following specific hypothesis.
- A significant correlation exists between MFIs credit and the U.K. women entrepreneurial activities.
- The MFIs induced savings are significantly correlated with the performance of women engaged in entrepreneurial activities in the U.K.
- The pieces of training offered by MFIs are significantly correlated to the performance of U.K. women enterprises.
- Insurance service offered by MFIs in the U.K. is significantly correlated to the sustainability of U.K. women entrepreneurs
- Money transfer services offered by MFIs are significantly correlated to the performance of U.K. women enterprise.
1.6: Significance of the Study
The stakeholders are likely to benefit from the findings of this research include MFIs, women entrepreneurs, academicians, and government, and society in general. The MFIs will gain a better understanding of their role and how they can better promote U.K. women empowerment and entrepreneurship through its products and services. Based on study recommendations, MFIs institutions can implement effective programs to improve their services to enhance women empowerment. Consequently, women entrepreneurs will gain from improved financial services and entrepreneurial skills. The government can improve and better its policies by providing favorable conditions for strengthening women entrepreneurs and MFIs to operate. These policies can bring new women entrepreneurs on board and attract investment in MFIs to offer services at competitive rates to the interested women entrepreneurs. Finally, the study provides knowledge of MFIs and women entrepreneurship for academic scholars (Berg & Lune, 2013). The knowledge gained provides that basis for further research in the micro-financing and women entrepreneurship field.
1.7: The Scope of the Study
The focus was limited to women empowerment through entrepreneurial activities within the U.K. geographical area. The target population was constrained to the women engaged in entrepreneurial activities and MFIs operating in the U.K. boundaries. Therefore, women entrepreneurs beyond U.K. boundaries and male entrepreneurs were excluded except as the reference points. Due to resources limitation, the research centered closely located urban areas in the U.K. rather than the entire U.K. country. However, it is important to acknowledge differences in issues facing urban and rural entrepreneurs. Therefore, conclusions from the study may be homogenously applied in MFIs and women entrepreneurs in the rural setting. This was paramount in minimizing the costs of physical travel across the country. The analysis was further restricted to the representative cases of women entrepreneurs selected via a probability sampling method. The study specifically focuses on investigating the contribution of micro-financing services to the U.K. Women entrepreneurship.
1.8: Study Organization and Structure
There are five main chapters and several subchapters under each section. The first section offers an introduction to the concepts of MFIs and women entrepreneurship. To set the ground for the research, the chapter provides the background of research, statement problem that needs to addressed in the study, questions and objectives of the study, and significance of the findings. The reviews relevant literature is captured in th second section, including theories and empirical studies of interest to the research topic. Th review helps determine the guiding theoretical framework and identifies the knowledge gap addressed in the study. The following chapter identified and justified the methods used in researching how MFIs are impacting the empowerment of women through the support of entrepreneurial activities in the urban areas of theU.K. The justification for selected research design and methods over the alternatives was given based on reasoned arguments. The chapter presents results and discussion of the same concerning existing theories and previous studies. Based on these findings, the study conclusion and recommendations were presented in the final section of the paper. It also states significant limitations and challenges encountered in carrying out the study and suggestions for future research in MFIs and women enterprises.