Unlocking Capital for Women Entrepreneurs Requires the Right Keys

6 min readMar 29, 2023

Private and Public Stakeholders Identify Barriers and Recommend Solutions to Improving W-SMEs’ Access to Finance in the Western Balkans

In times of economic uncertainty, small and medium-sized enterprises (SMEs) play a critical role in job creation and economic growth as they tend to be market-driven and can innovate and adapt quickly to meet consumer demands. In the Western Balkans, SMEs account for 99 percent of enterprises across the six economies (Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia, Serbia). To sustain and grow their businesses, SMEs need access to capital. Yet many women-owned, -led, and -managed SMEs (W-SMEs) lack the information and access to finance needed, resulting in untapped potential for a country’s economic growth.

USAID representatives (Aleksandra Krzic, left and Rozalija Karchicka — Vasilevska, right) at the W-SME Access to Finance Learning Event in Belgrade, Serbia. Photo: Brian Oh/Palladium

Recently, the USAID CATALYZE Engines of Growth (EoG) Activity in the Western Balkans gathered 65 public and private stakeholders to discuss the barriers W-SMEs face in finding and accessing the appropriate financing solution for their businesses. At the regional Learning Events in Belgrade, Serbia, and Tirana, Albania, stakeholders identified the following effective strategies to help W-SMEs access financing that is tailored for their business.

Key Lessons

Cultural and social norms strongly impact what women can do in the business world. One of the major constraints in the Western Balkans is that women have fewer opportunities to access information, resulting in limited networks and less exposure to potential opportunities. Gender disparities reflect a mix of social, cultural, and legal barriers to women’s participation in the financial system in the Western Balkans. Without adequate support with housework and childcare, women face greater challenges when starting their own businesses. In the region, women are perceived to lack the knowledge and skills needed to run a successful business. However, learning event participants note that women entrepreneurs tend to be better at motivating and retaining people and employees. Participants also noted that women, on average, tend to retain employees at a higher rate than men and that they are good at managing staff and working productively with a team, which in turn is good for managing and growing a business. In general, women in the Western Balkans are not only motivated by profit but also by socially beneficial activities that have a positive impact on the wider community where they live.

Greater education and access to information and consulting services can help women make more informed decisions around identifying and accessing suitable financing. There is a lack of “hands-on” education around financing and financial literacy tailored to the business needs of W-SMEs in the Western Balkans. Women, especially those with families, have limited time to conduct research let alone access new sources of financing for their businesses. These women are often referred to as entrepreneurs out of necessity in the Western Balkans as they don’t necessarily invest in skills or start with a business plan. Potential solutions include building centralized sources of information about different financial products and services and providers, which would help women save time and money. Programs dedicated to helping W-SMEs access consulting services can also have a significant impact.

When the business environment changes, women are less likely to adapt since they tend to be risk averse and do not have the requisite skills to apply new business models. On the other hand, evidence shows that women are better savers than men, more responsible borrowers, and more calculated risk-takers. Given that women are risk averse and less likely to make investments, their businesses are susceptible to stagnation. The longer they are without investments, the less likely they are to be recognized by the bank for any new financing. Business Advisory Service Providers (BASP) and financial consultants can help women explore new sources of financing and develop business plans that account for the impact of growth on employees and communities.

Inequality in opportunities for W-SMEs to access finance does not exist in the Western Balkans, but there are inequalities in outcomes. Financial institutions do not tend to discriminate based on whether a business is owned by a man or woman, but instead select to work with businesses based on their historical performance. The traditional male dominated sectors such as manufacturing and extractives are preferred by financial institutions because they are comfortable with the sectors and know how they operate. The perception among many financial institutions is that women-owned businesses are primarily in the services sector and tend to be small and therefore riskier. One way to counter this perception is through effective and compelling communications touting successful W-SMEs across various sectors in the region. Providing positive examples through media, events, workshops, and conferences could help dispel some of these negative perceptions and demonstrate that women do indeed own and manage successful bankable businesses in the Western Balkans.

The digital economy provides a great opportunity for all W-SMEs. A digital presence, especially digital marketing platforms, can make a woman’s business more visible and provide a venue for presenting products to new markets that require less time and resources. Moreover, fintech and alternative sources of finance, such as private equity and venture capital, can be a great opportunity for introducing new customized products and services that meet the business requirements of W-SMEs.

“In addition to accessing information and new capital, BASPs help women entrepreneurs understand what types of financing are best suited for their business needs. Through our engagements, we also provide critical guidance and support in helping women entrepreneurs develop strategic business plans that will ensure the ongoing success and growth of their companies.”

— Meriha Manojlovic, Financial Facilitator BASP


Based on the lessons learned, CATALYZE EoG recommends the following steps to revising incentive structures with partners to facilitate access to finance and promote business advisory services to W-SMEs in the Western Balkans.

  • Expand W-SMEs’ use of BASPs to help them receive much needed services around access to finance and business management strategies.
  • Promote workshops, info sessions, and other learning events to help W-SMEs understand the tools and services on the market and how they can be applied.
  • Develop financial products with low collateral requirements for designed for W-SMEs.
  • Create an inclusive playing field that takes into account the challenges and opportunities faced by W-SMEs.
  • Promote basic financial literacy and work on raising awareness of new financial products and services, such as venture capital, private capital, and digital finance.
  • Establish start-up business mentorship programs, specifically for women entrepreneurs.
  • Develop sustainable access to finance information platforms that gather information on financial products that are easy to access and use.

The CATALYZE Engines of Growth (EoG) Activity supports the resilience, growth, and job creation of small- and medium-sized enterprises (SMEs) in the Western Balkans by improving their access to and use of appropriate finance. CATALYZE EoG helps mobilize capital to sustain distressed but viable SMEs and jobs in the wake of COVID-19 in the near term and promotes improved SME growth financing in the long term. The EoG Activity engages market actors and other stakeholders in a co-design process to identify key opportunities and develop activities to minimize access to finance constraints.

Learn more about USAID CATALYZE Engines of Growth in the West Balkans here.


USAID CATALYZE, implemented by Palladium, is an 8-year program designed to mobilize $2 billion in private capital for development impact, especially in underserved social sectors and frontier markets across the globe. The project incorporates cross-cutting initiatives for gender equity and social inclusion and climate change mitigation with the overall goal of increasing access to finance. CATALYZE supports blended finance solutions, working with local and international businesses and investors to explore and find commercially viable opportunities and approaches to creating jobs, developing sustainable social services, tightening and rationalizing supply chains, and advancing inclusive growth. We work across 28 countries in Asia, Africa, Europe, Latin America, and the Caribbean, with 190 partners, including financial institutions, business advisory service providers, anchor firms, and job trainers.

This page is made possible by the support of the American People through the United States Agency for International Development (USAID). The contents of this document are the sole responsibility of CATALYZE implemented by Palladium and do not necessarily reflect the views of USAID or the United States Government.