March 6, 2019

The role of social media, mentors and finance among women small business owners

By: Laura McGorman, JW Schneider

New countries and the latest findings from the Future of Business Survey

From 44 to 97 countries

Since February 2016, Facebook has partnered with the World Bank and OECD to run the Future of Business, a survey of small and medium businesses (SMBs) on Facebook around the world. After three years of experience on this shared research project, we’re proud to announce a new, expanded country list and a new approach to this survey. First, we’ve expanded our country list from 44 to 97 countries, now making the Future of Business one of the widest, most global surveys of SMBs ever conducted. We are now able to reach SMB owners and managers in rarely surveyed parts of Africa, Asia, Latin America and Eastern Europe, contributing strongly to international knowledge on small businesses in the developing world. We’ve also increased the flexibility of our survey so partners can ask the most important things they need to know in order to address immediate research priorities.

New Findings

Women in leadership
Around the world, a substantial proportion of small businesses on Facebook are owned and being led by women. In the 97 countries surveyed, we found that nearly 4 in 10 (39%) of people identifying as owners or managers of small businesses on Facebook are women. Although these rates lag behind parity, a vibrant community of women-led businesses exists on our platform and is supporting each other each day. For example, though women-led businesses are smaller businesses overall, they tend to have significantly more women employees than men-led businesses, showing that when women lead, they bring other women along with them.

The role of social media
In addition to strong presence of women-owned small businesses on Facebook, we find that social media is playing an outsized role among small businesses run by women. In the 97 countries surveyed, over 8 in 10 (81%) women-owned small businesses state social media is helpful to their business and in 37 countries, women business owners refer to the helpfulness of social media at statistically higher rates than men. For example, in the Asia-Pacific region, over 80% of women business owners in Bangladesh, India and Australia state that social media is helpful to their business, and in Latin America, over 85% of women business owners in Brazil and in Chile state the same. In Sub-Saharan Africa, a whopping 94% of women business owners surveyed in Mozambique and 87% of women business owners surveyed in Cote d’Ivoire refer to social media platforms as helpful. Finally, in North America, 84% of women business owners in Canada say that social media is helpful to their business and in Europe, 83% of women business owners in the UK and 73% of women business owners in France refer to platforms like Facebook helping their businesses.

Fig. 1: Where do more women than men say social media helps their business? (Business owners or managers)

The role of community and mentorship
We also observe the strong role that community and mentorship play among women-owned small businesses on Facebook. Across 97 countries surveyed, over 2 in 3 (67%) female business owners and managers state that they have a role model. Female entrepreneurs not only benefit from having role models, but they also serve as role models themselves, with 70% of women business owners with role models stating that they look to other women in this regard.

Within a handful of countries in Sub-Saharan Africa, the rate of role models among women business leaders is staggering, with over 90% of women business owners and managers surveyed in Mozambique, Uganda, Zambia and Senegal reporting the presence of role models in their life. Similarly, over 80% of women business owners report having a role model in other parts of the world, including in Peru, Mexico, Nicaragua, Guatemala, Bolivia and Costa Rica in Latin America; in Ethiopia, Cote d’Ivoire, Benin and Nigeria in Sub-Saharan Africa; in the Philippines in Asia; and in Libya in the Middle East.

Fig. 2: Women business owners mostly have role models, especially in developing countries

Further analysis of women business owner activity on the platform reveals that having a role model is not the only way in which women in business can learn from each other. Examining women business owners’ interactions in Facebook Groups, such as commenting, posting or sharing within a Group, we find that women business owners interact in Groups in nearly every country surveyed. Across Africa, Europe, North America and South Asia, women business owners are more active in Groups and their interactions are particularly strong in North Africa, the Middle East and Europe.

Fig. 3: In most countries, women business owners are more active in groups overall than men

Access to finance remains a problem
Despite the positive impacts of social media and community on women running businesses, the Future of Business reveals that female entrepreneurs still face significant barriers when seeking to fund their ventures. Across countries surveyed, over 4 in 10 women entrepreneurs report having started their businesses with personal savings and less than one in five report currently having access to credit or a bank loan. Similar to previous Future of Business findings on access to finance, we also find that credit use does not necessarily improve as incomes rise. For example, while only 5-9% of women-led businesses in Nigeria, Zambia, Cote d’Ivoire and Tanzania report having a loan or credit line, we also see that only 9-10% of women-led businesses report having access to similar forms of formal financing in Hungary, Estonia and Switzerland, as well as in Argentina, Uruguay and Brazil. Recognizing these challenges, Facebook is partnering with Girls in Tech to provide female entrepreneurs in Australia, Taiwan, Indonesia, Korea and Singapore with the tools and opportunities they need to help secure funding.

Fig. 4: Women owned or managed businesses have varying levels of access to credit

Sharing this data with the world
With over 90 million small businesses using the Facebook platform, the Future of Business Survey provides an opportunity to better understand the people leading these businesses, their experiences and their needs. While we at Facebook are excited to share this initial analysis, we invite you to perform your own research with Future of Business data by accessing the latest results on the World Bank Open data portal here. By sharing this data in an open and public fashion, we hope that the global community can leverage this information to benefit small businesses and increase economic opportunity around the world.