Common Barriers for Women Entrepreneurs and How to Overcome Them

Women have always been entrepreneurs – running households, managing resources, and driving local economies. Yet when it comes to formal business ownership, they remain significantly underrepresented. According to the Global Entrepreneurship Monitor (GEM) 2024/2025 Women’s Entrepreneurship Report, which draws on data from over 161,000 adults across 51 countries, only one in ten women started a new business in 2024, compared to one in eight men. The barriers driving this gap are real, layered, and deeply rooted in both structural systems and social norms. Understanding those barriers – and the practical tools to overcome them – is the first step toward building a more equitable entrepreneurial landscape.

Barriers women face in entrepreneurship 🔗

Women don’t choose self-employment in a vacuum. For many, especially in developing and emerging economies, it is less a free choice and more a necessity – the only viable path to income when formal employment is inaccessible or structurally hostile.

Limited access to formal employment 🔗

In many regions, women are systematically excluded from the formal labor market due to discriminatory hiring practices, gender-based wage gaps, and legal restrictions. UN Women reports that in 18 countries, husbands can legally prevent their wives from working outside the home. The global gender pay gap stands at an estimated 20%, meaning women earn roughly 80 cents for every dollar men earn. When formal employment either pays too little or isn’t legally accessible, self-employment becomes the default path rather than a deliberate ambition.

Educational and skills constraints 🔗

Access to quality education directly shapes who has the confidence and capability to run a business. The OECD notes that women are only about 75% as likely as men to report having the skills needed to start a business – a gap that reflects both genuine skill deficits and lower self-confidence rooted in unequal educational access. In many low-income countries, girls are pulled out of school earlier than boys, which limits their professional networks, financial literacy, and long-term earning capacity. Without foundational business education, the entrepreneurial journey becomes far steeper.

The financing gap 🔗

Access to capital is one of the most persistent and well-documented obstacles. OECD data from the World Bank Enterprise Survey shows that in 2024, women were about half as likely as men to access the external finance needed to grow their businesses. Globally, of the $289 billion in venture capital invested in 2024, a mere 2.3% went to female-only founding teams, while all-male teams captured over 83%. Even among women-owned businesses in the U.S., only 3% secured private capital in 2023 compared to 9% of male-owned businesses. Traditional banks often require collateral or credit histories that women – especially those in informal economies – simply don’t have.

Unpaid care burdens and social expectations 🔗

The weight of domestic responsibilities falls disproportionately on women worldwide. GEM’s 2024/2025 report found that women were 47% more likely than men to close a business due to family or personal reasons, reflecting the ongoing tension between caregiving demands and running a business. Gender norms that frame women primarily as caregivers don’t just limit time – they shape what women believe is possible for themselves and what their communities are willing to support.

Weak or exclusionary networks 🔗

Entrepreneurial networks are how people access mentors, clients, funding, and knowledge. Women are frequently locked out of these networks due to male-dominated professional circles, geographic isolation, and social norms that restrict their mobility. Research published in the Journal of Enterprising Communities identifies social networking as one of the top barriers facing women entrepreneurs in developing countries, alongside access to training and patriarchal gender norms. Without networks, even the most capable entrepreneurs struggle to find customers, investors, or mentors who can help them grow.

Bureaucratic and regulatory hurdles 🔗

Registering a business sounds straightforward but can become a significant barrier for women balancing unpaid care work with entrepreneurship. Research by the Cherie Blair Foundation for Women, which surveyed nearly 3,000 women entrepreneurs across 100 countries, found that 18% reported serious difficulties registering their businesses because of high costs and complex bureaucratic requirements. Every hour spent navigating red tape is an hour taken from running a business or managing a household – a double burden men are far less likely to face.

Microenterprise as a practical solution 🔗

For many women navigating these barriers, the microenterprise – a small, often informal business typically run by one or two people – offers a realistic and empowering entry point into entrepreneurship. These aren’t stopgap measures; for millions of women globally, microenterprises are the foundation of household income and community economic activity.

What makes microenterprises work for women 🔗

The core advantage of a microenterprise is flexibility. A woman running a home-based food business, a tailoring service, or a small retail operation can adapt her working hours around her caregiving responsibilities without sacrificing her income entirely. This flexibility is not a compromise – it’s a structural feature that makes entrepreneurship viable where traditional employment is not.

Research on women’s microenterprise development in Sri Lanka connects these small businesses directly to the UN Sustainable Development Goals, particularly SDG 1 (no poverty), SDG 5 (gender equality), and SDG 8 (decent work and economic growth). When women have income they control, the effects extend beyond the household. Studies consistently show that women reinvest a higher proportion of their earnings into family health, children’s education, and community wellbeing than men.

Home-based businesses and digital platforms 🔗

The rise of e-commerce and digital platforms has significantly lowered the barrier to entry for women-led microenterprises. Platforms like Etsy, Shopify, and various social commerce tools mean that a woman in a rural area can sell handmade goods to global customers without requiring a physical storefront, significant capital, or even a formal business registration. Industry analysis shows that women are excelling in digital-first businesses, particularly in creative services, consulting, and product-based enterprises – precisely the types of work that can be done part-time, from home, and scaled gradually.

Microfinance as a gateway 🔗

Alongside microenterprises, microfinance institutions (MFIs) have emerged as critical tools for providing women with startup capital outside the traditional banking system. Research in the Future Business Journal highlights that MFIs have been especially effective in empowering women in rural areas where commercial banks don’t operate or where women lack the collateral required for standard loans. Small, affordable loans paired with financial literacy training give women the tools to start, manage, and grow businesses that were previously out of reach. However, researchers caution that finance alone isn’t sufficient – the most effective programs combine microloans with business training, mentorship, and community support structures.

Steps to encourage and support women entrepreneurs 🔗

Removing barriers for women entrepreneurs isn’t just a matter of individual effort – it requires coordinated action at the community, organizational, and policy levels. The following steps reflect what the evidence shows actually works.

Expand access to targeted financial resources 🔗

Access to capital specifically designed for women is essential. The Women Entrepreneurs Finance Initiative (We-Fi), a collaborative partnership hosted by the World Bank Group, scales up financial products and services for women-owned businesses in developing economies, combining lending with capacity-building and market access. At the national level, governments can introduce dedicated grant programs, loan guarantees, and procurement preferences for women-owned businesses. For individual entrepreneurs, platforms like SCORE and the National Women’s Business Council provide directories of grants, loans, and funding networks specifically available to women-led enterprises.

Invest in business training and financial literacy 🔗

Brookings Institution research on women’s entrepreneurship in developing countries found that training programs which go beyond basic business skills – and include life skills, confidence-building, and contextually sensitive instruction – show the most lasting results. Programs that provide safe training environments, free childcare during sessions, and flexible scheduling see significantly better outcomes for women participants. Financial literacy is particularly critical: understanding cash flow, pricing, and credit enables women to manage their businesses more effectively and make the case for financing when they need it.

Build and join supportive community networks 🔗

Women’s entrepreneurial networks are not just social – they are strategic. Peer networks provide access to shared knowledge, referrals, emotional support, and collective advocacy. Organizations like the International Labour Organization’s Women Entrepreneurship Development programme explicitly prioritize the formation of women entrepreneurs’ associations as a core component of sustainable empowerment. Online communities have also become powerful equalizers: platforms and organizations focused on female founders allow women from geographically isolated areas to access mentorship, skill-sharing, and peer accountability that they couldn’t find locally.

Advocate for mentorship and role model visibility 🔗

Mentorship matters not only for practical guidance but for psychological permission – the understanding that success is possible for someone with your background and circumstances. Research on women’s entrepreneurship strategies finds that pairing aspiring entrepreneurs with experienced female mentors directly improves business performance, confidence, and decision-making. Incubators and accelerators that center women – such as the EY Entrepreneurial Winning Women program or Google for Startups’ Women Founders track – are creating structured pipelines for mentorship and visibility. Making successful women entrepreneurs more visible in media and policy spaces also shifts community norms about what women can do.

Push for enabling policies and legal reform 🔗

Policy change is foundational. Legal barriers – from restrictions on women owning property or opening bank accounts to burdensome business registration processes – must be dismantled before market-level interventions can fully work. The U.S. Women’s Entrepreneurship and Economic Empowerment (WEEE) Act, signed into law in 2019, provides a model: it supports micro and small enterprises, advocates for property rights, and seeks to improve the broader enabling environment for women in business across developing countries. The OECD similarly calls on governments to cultivate women’s entrepreneurial aspirations, fix market failures in skills and finance, and build support systems for growth-oriented women entrepreneurs. Progress is happening – GEM data shows that women’s startup rates rose in 19 of 47 countries between 2023 and 2024 – but the pace of change needs to accelerate.

Why this matters beyond individual women 🔗

The economic case for removing barriers to women’s entrepreneurship is overwhelming. Closing the gender gap in the global workforce could contribute a $7 trillion increase to global GDP. When women control income, families spend more on healthcare and children’s education. When women lead businesses, they create jobs, mentor others, and diversify local economies. The barriers that hold women back from entrepreneurship don’t just limit individual women – they limit entire communities and nations. And because GEM research confirms that in many contexts entrepreneurship is not a free choice for women but the only viable option, removing barriers isn’t just about leveling a playing field. It’s about expanding what’s possible.

What do you think? Given that women often enter entrepreneurship out of necessity rather than choice, what responsibility do communities and governments have in making self-employment a genuinely viable – not just the only – option? And if access to capital is one of the most persistent barriers, why do you think the funding gap between male and female entrepreneurs has remained largely unchanged for three decades?

References

1. https://gemconsortium.org/report/51822
2. https://www.unwomen.org/en/what-we-do/economic-empowerment/facts-and-figures
3. https://www.oecd.org/en/publications/bridging-the-finance-gap-for-women-entrepreneurs_75b52972-en/full-report/global-state-of-financing-for-women-s-entrepreneurship_4fd35c18.html
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6. https://www.emerald.com/jec/article/doi/10.1108/JEC-01-2025-0003/1301023/Uncovering-the-barriers-faced-by-women
7. https://cherieblairfoundation.org/top-5-challenges/
8. https://vc.bridgew.edu/jiws/vol26/iss1/7/
9. https://link.springer.com/article/10.1186/s43093-022-00172-2
10. https://www.we-fi.org/
11. https://www.score.org/women-entrepreneurs
12. https://www.nwbc.gov/resources/
13. https://www.brookings.edu/articles/empowering-women-entrepreneurs-in-developing-countries/
14. https://www.ilo.org/projects-and-partnerships/projects/women-entrepreneurship-development-and-economic-empowerment
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16. https://www.usglc.org/resources/women-empowerment-brief/
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18. https://www.gemconsortium.org/reports/womens-entrepreneurship