MicroCredit, Women and Internet Capitalism


The rest of the world operates differently than most Americans can ever imagine, because for most people, credit cards are a practically unreachable goal. This is particularly true for women. Microcredit disproportionately benefits women – just look at Whole Foods’ Whole Planet Foundation: 89% are female clients.

That’s part of why I was so excited when I noticed Etsy.com’s new program. For those who aren’t familiar, Etsy is an online marketplace for artisans who are predominantly women working part-time on their craft (in other words, Hipster Mecca). Recently, Etsy launched a financial support program for creative entrepreneurs with Kiva, “a non-profit organization with a mission to connect people through lending to alleviate poverty.”

A microloan means nothing more than a much smaller loan than average for opening a business in the United States. In fact, the average first loan size in the developing world is $166. This is great news for these female entrepreneurs.

Ranked 17th internationally, the United States has seen massive growth in female-owned firms in the past few years. American Express’s OPEN program commissioned a 2013 State of Women-Owned Businesses Report, which states, “When looking specifically at the 2007-2013 period, the net increase of 5.3 million jobs economy-wide has come almost entirely from very large public corporations and women-owned firms.”

This is very good news.

But in the United States, there’s often a presumptuousness about our capitalistic example – “It’ll never go away! We started it!” – that not only belies history somewhat, but contributes to an arrogance that thinks that central planning will be best and we’ve “graduated” beyond market-based solutions.

In Pakistan, women are actively overcoming that delusion.

The New York Times ran a piece a few years ago on Roshaneh Zafar, an American-educated banker who is actively combatting discrimination in Pakistan through – you guessed it – microfinance programs for women. “Charity is limited, but capitalism isn’t,” Roshaneh told the paper. “If you want to change the world, you need market-based solutions.” Especially when one sees that, according to The Economist, the share of women internet entrepreneurs in Amman and other Middle Eastern cities now averages 35%, while everywhere else in the world the average is around 10%. The reason is simply that the internet is a new space with fewer regulations and it also allows entrepreneurs to work from home, making it easier to raise children and work at the same time.

The United States could use a bit more of that attitude when overcoming gender discrepancies in outcome. Why is it so profoundly difficult for many African-American hair-braiders to open their own salons? In Michigan, becoming a barber requires 2,000 hours of training, not to mention hidden fees. Why is childcare so astronomical, particularly in cities? My guess is an increasing number of educated female citizens and the quagmire of immigration policy has something to do with it.

There are real economic setbacks that particularly impact women, and MORE freedom, not less, is the best answer.