Common features in the development of women's entrepreneurship in Kazakhstan and other developing countries

The UN does not provide a clear assessment of gender equality in Kazakhstan due to incomplete data. However, the report notes that Kazakhstan is one of the few countries in the sample with a very high rate of women with a high school education or higher (96.9%). At the same time, all other components of the Women's Empowerment Index (health, labor and financial inclusion, participation in decision-making and freedom from violence) remain at the level of countries with a low Index level or are not filled in at all. The value of the Global Gender Parity Index, which assesses the situation of women in the same areas, except for the level of violence, is also not shown for Kazakhstan due to the lack of all data, but it is noted that women’s indicators are to one degree or another lower than men’s, which is a negative aspect. So, for example, while the rate of young women aged 15-24 years without access to education and work is approximately 9.9% of the total youth population, the same figure for men is about 4.8%.

Additionally, according to the World Economic Forum's Global Gender Gap Report , in 2023 Kazakhstan worsened its score on the Global Gender Gap Index, which measures inequality between men and women in areas such as economic participation and career opportunities, education, health and survival, political rights and opportunities. Kazakhstan’s Global Gender Gap Index over the year increased from 0.719 to 0.721, which moved the country 3 positions closer to gender inequality. As of 2023, Kazakhstan takes 62nd place in the Global Gender Gap Index, while in 2019 this indicator was 0.351. Such an enormous rise indicates a rapid increase in inequality between men and women in Kazakhstan in economic, political and social areas.

Women's empowerment is an important global development issue. Despite their great contribution to development, women face discrimination, especially in developing countries. Women are often treated worse than men in business due to the rules, norms, customs and nature of society. As can be seen from Graph 1, there is a significant difference between the average monthly wages of men and women. On average, between 2015 and 2022 men in Kazakhstan earned 30% more than women.

The issue of gender inequality is relevant in Kazakhstan in many areas, so the state is working to reduce the gap between men and women. For example, in 2022, on the basis of regional chambers of entrepreneurs, there were organized Centers for the Development of Women's Entrepreneurship. In these Centers women can take counsel about business development, personal and professional growth.

Graph 1. Dynamics of average monthly wages in Kazakhstan 2015-2022.

Source: BNS ASPR RK

The growth of women's entrepreneurship is necessary to empower women and help improve their financial status. Moreover, it is also a key driver of growth in developing countries. The development of women's entrepreneurship provides additional opportunities to increase household incomes and pay for primary education, clothing and food. Women's entrepreneurship promotes economic development and provides employment opportunities. In January 2022, 31.1% of all SMEs employers in Kazakhstan were employed in organizations headed by women, and this figure is slightly increasing every year.

Analysis of the development of women's entrepreneurship is relevant in the research of many economists, for example, in the work (Andriamahery A., et.al, 2022). For the study was selected a sample of 950 women-owned SMEs in Bangladesh (ranked 59th in the Global Gender Gap Index with an index value of 0.722). The authors draw several conclusions from their study. First, they identify a strong positive relationship between the development of women's entrepreneurship and women's empowerment. This means that women's empowerment, that is the ability to increase purchasing power with economic stability, is a notable outcome of women's entrepreneurship development. Second, the study extends the existing literature on the determinants of women's empowerment and entrepreneurship development by taking into account technological know-how and financial literacy, which were not considered in earlier works. Women's entrepreneurship has a positive mediating effect on financial literacy and technological skill proficiency among women. Third, the authors identify the challenges that women face in expanding their entrepreneurial opportunities. Every business needs financing in the initial stages. Lack of access to finance continues to be a barrier to entrepreneurship for both men and women, although research shows that women face greater barriers. Women entrepreneurs in Bangladesh face various social and political challenges in establishing and maintaining their organizations. Thus, they tend to get stuck in the early stages of business development.

The study's findings suggest that in order to ensure a prosperity of women's entrepreneurship, there must be greater access to financial services and credit programs, opportunities for technical skills, and financial education for women. Access to financing has opened up economic opportunities for the development of women's entrepreneurship. Nowadays the industries in which female entrepreneurship predominates are socially significant businesses aimed at solving social problems. Therefore, its development is important not only for achieving gender equality, but also for the socio-economic development of the economy within the framework of sustainable development.

The problem of access to financing for women's entrepreneurship in developing countries is also discussed in the work (Simba A. et.al, 2023). This analysis uses data about SMEs of women entrepreneurs in Nigeria (ranked 130th in the Global Gender Gap Index, Index value - 0.637) from 2021 to 2022. The study focuses on analyzing how the financing scheme influences the business conditions of women entrepreneurs in gender biased environments and what are the main mechanisms that determine the structure of such schemes in developing countries. The authors highlight that while women's entrepreneurship provides an opportunity for women's social and economic empowerment and advancement in developing countries, this process is highly dependent on the availability of institutional support. This support gives women equal access to the resources they need to start, grow and sustain their businesses. In developing countries, the growth and development of women-owned enterprises is largely dictated by the nature of the institutions that dominate their society. Women face tougher loan approvals, higher interest rates, and lower loan ceilings when applying for formal financing through regulated financial services. Given such gender biases and social barriers, as well as assumptions about women's roles that often limit their full participation in economic activities, informal finance schemes have been identified as a major source that they can potentially use to finance their entrepreneurial undertakings. Thus, the gender equality gap has resulted in the most popular source of funding for women entrepreneurs in Nigeria called Ajo scheme. Ajo, better known as the African Contribution Savings Scheme, is a term commonly used in Nigeria to refer to a savings scheme among African communities, usually an informal and managed group of people who regularly contribute money to a common fund. The scheme can be seen as a form of informal banking or microfinance, providing a source of savings and credit for people who may not have access to formal banking services.

The situation in Kazakhstan is not too different from Nigeria. Officially, the country has government programs to finance projects of women entrepreneurs. For example, banks support women's entrepreneurship through the Damu fund. However, if we look at the statistics, we can note that the main sources of financing for women in Kazakhstan are microfinance organizations (MFOs). For example, in 2020, the Association of MFOs of Kazakhstan published a report indicating that 52% of all microloans were issued to women. In addition, the 2022 report of one of the largest MFOs in Kazakhstan, KMF, indicates that support for women entrepreneurs has been provided since 2016. In July 2022, KMF entered into an agreement to provide loans for $25 million to support women's entrepreneurship.

In Kazakhstan, as in many other countries, there is enormous potential for the development of women's entrepreneurship, which cannot be ignored. According to McKinsey, if women were able to participate in business on an equal basis with men around the world, global GDP could grow by $28 billion by 2025. Government programs, public organizations and large business companies play a key role in the development of women's entrepreneurship. Provided that their joint efforts are aimed at establishing cooperation and creating an environment in which women are provided with support and professional assistance, Kazakhstan will achieve significant results in the field of economic growth.