Across emerging markets, women-owned and led small and medium enterprises (WSMEs) are powerful engines of job creation and economic growth. Yet their potential remains underleveraged, as they often lack access to the right mix of financial and non-financial services.
Most financial institutions and service providers rely on segmentation models based solely on business size, without accounting for the diverse characteristics and needs of the businesses or the women who lead them. This one-dimensional approach too often results in mismatched offerings and the loss of a major market opportunity.
This is where the new WSME Segmentation Framework and Toolkit steps in, as a practical solution that is both grounded in research and designed for action. The framework is the result of a collaboration involving ConsumerCentriX, the Argidius Foundation, Dutch Good Growth Fund (DGGF, an initiative of the Dutch Ministry of Foreign Affairs), and the Women Entrepreneurs Finance initiative (We-Fi, housed at the World Bank).
The new framework focuses on formal businesses and segments them by projected revenue growth, high, moderate, or low, which is a more meaningful indication of the future trajectory of a business. Within each growth segment, two distinct entrepreneur profiles are identified based on the entrepreneur’s motivations and behaviors. This nuanced approach incorporates the key drivers of WSMEs into the segmentation framework, enabling financial service providers, donors, and business support organizations to design targeted solutions that match the actual needs of the WSMEs and their leaders.
Research in three pilot countries representing a diverse set of markets, Colombia, Uganda and Pakistan, revealed the major economic opportunity of adopting a segmentation framework that improves WSME services. Based on market-sizing analysis, the financial sector gains that could be realized by effectively serving formal WSMEs are remarkable:
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- Colombia (64% of WSMEs formalized): potential banking sector revenue gain of USD 1.63 billion (an increase of 9.5% compared to the status quo)
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- Uganda (13% formalized): up to – if 277 million (+15.8%)
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- Pakistan (2% formalized): USD 257 million (+6%)
Built on research with over 600 WSMEs in the three pilot countries, the new framework covers a range of geographies, income levels, rates of business formalization, regulatory environments, and entrepreneurial ecosystems. As such, it is representative of a broad spectrum of contexts in which WSMEs operate, and is relevant across a range of emerging market realities.
By shifting the focus from business size to business growth, the new segmentation framework leads to a major improvement in how financial institutions and service providers tailor their offerings to WSMEs. This not only supports the growth of WSMEs but also unlocks significant revenue potential for the institutions serving them.
Learn more from the report: What Enables Her Business to Grow. A New Segmentation Framework To Unlock the Opportunity of Serving Women-Owned/Led Businesses in Emerging Markets