Micro, small and medium scale enterprises are the backbone of Asia’s economy. Asian MSMEs account for 96% of total enterprises, employ 62% of the labour workforce and contribute an average of 42% of gross domestic product (GDP). Women-led MSMEs comprise almost 23% of MSMEs, creating jobs and livelihoods for both women and the broader ecosystem in Asia.
Despite these contributions to GDP and livelihoods, women-led MSMEs continue to face persistent growth barriers. Limited access to formal finance and relevant markets, increasing exposure to climate risks, and digital and policy gaps that constrain their growth are well documented. For years, the dominant narrative has been that women need to “up their game” or “improve their leadership skills”, acquire more financial aptitude, become more confident, learn to pitch better, or adopt new technologies faster.
The Persistent Gap: Systems, Not Women Need to Try Harder
The evidence to date on this lack of inclusion and access, specifically financial inclusion, for women-led MSMEs is clear. The problem is not only women’s capabilities to run, sustain, and grow businesses but also the ecosystems within which they operate as entrepreneurs.
While both men and women entrepreneurs face the same gaps in the policy landscape, business registration processes, market entry and exit barriers, and tax rates, women entrepreneurs are often at a disadvantage in dealing with these challenges due to a number of factors. Lack of collateral and relevant channels to access market information, digital access, networks, legal constraints, financing products that are not suited to their specific needs, and norms and biases are some of the most cited and documented challenges women-led businesses face as compared to their male peers. Access to finance remains a key challenge for women entrepreneurs. Recent IFC estimates suggest that the financing gap for formal MSMEs globally is USD 5.7 trillion and for informal MSMEs it is USD 2.93 trillion. The estimated global credit gap for women-led SMEs range from USD 1.5 – USD 1.9 trillion, with a significant gap in Asia.
Plugging this key gap to unlock financing for women-led MSMEs requires a systematic approach and requires strengthening the capacity of the full range of stakeholders – including networks, financial intermediaries, regulators, and policy enablers that shape the environment in which women operate and unlock more capital. It requires philanthropic, impact investing, and corporate communities to support the organisations that sit in the middle; the connectors who translate capital into real impact.
Strengthening Intermediary Capacity To Unlock Financing for Women-Led MSMES
Intermediary financing organisations or bridge institutions, such as local microfinance institutions, gender-lens funds, social enterprises, NGOs, cooperatives, incubators, accelerators, and support networks play an indispensable role in closing the systemic financial, market access, and non-financial gaps that women entrepreneurs face. For micro-entrepreneurs specifically, their livelihoods and enterprise earnings are closely tied. Therefore, by being positioned closest to the lived realities of women-led MSMEs, they design products and services that respond to real financial, cultural, and other constraints rather than theoretical assumptions.
There are several examples of such bridge institutions that support women to link to the formal financial systems and fulfil other resource needs. In Indonesia, Amartha, a community-based fintech lender, uses community-based credit scoring to reach women micro-entrepreneurs who lack collateral. By building women’s business groups and investing in local field staff, Amartha maintains loan repayment rates above 95% in rural communities The organisation’s integration of digital literacy training and climate-resilience modules further illustrates how intermediaries can evolve and innovate in response to emerging risks to improve the overall business resilience of their clients.
Across the region, bridge institutions consistently:
- Provide support for solutions that de-risk early-stage women-led enterprises
- Build and support pipelines of investable women-led businesses
- Offer hands-on market access, aggregation, and value chain integration
- Facilitate digital adoption and provide logistics and sector specific tools, such as to adapt to climate risks
- Work with local governments to strengthen policies and incentives for women-owned MSMEs
Our ongoing landscape analyses to identify and map the challenges, gaps, and opportunities facing bridge institutions in four Asian markets have highlighted that these ecosystem intermediaries are often inadequately resourced to respond to the specific needs of their women clients. Many rely on short-term project grants, lack access to patient capital, and shoulder high operational costs particularly when serving last-mile, climate-vulnerable communities. Without sustained investment in these ecosystem actors, even the most promising solutions to unlock financing for women-led MSMEs will struggle to scale or deliver lasting change. Strengthening intermediaries is therefore not optional; it is essential to transforming the system so women entrepreneurs can thrive.
Philanthropy and Catalytic Capital: Catalysing the Systemic Shift
Philanthropic capital is uniquely positioned to catalyse the ecosystem shift women entrepreneurs need. By de-risking finance and systems, and supporting experimentation, pilots, capacity-building, and high-touch support models, philanthropy can unlock capital that currently doesn’t reach women-led MSMEs. Partnering with other funders to invest in bridge institutions further strengthens pathways for scale and sustained impact.
The most transformative investments will be those that:
- Strengthen or create networks of intermediary organisations
- Fund gender-intentional blended finance vehicles and pilots
- Enable local cooperatives, and women-led collectives to scale
- Support market-building activities, including digital marketplaces and climate-resilient supply chains
- Support evidence and action to promote policies that improve access to credit, formalisation pathways, and gender-responsive procurement
At AVPN, we see a growing momentum among members to move beyond siloed interventions and towards systems change; approaches that bring together capital providers, ecosystem enablers, and policymakers. The shift is timely and necessary.
Reframing the Narrative: Change the System, Not Women
The goal is not to “empower women” in the abstract. Women are already powerful economic actors. When we shift from fixing women to fixing the system, the impact multiplies: businesses become more competitive, families gain economic stability, and communities build resilience.
Supporting women entrepreneurs is not a matter of inclusion alone. It is a strategic investment in Asia’s economic, social, and climate future. Strengthening the ecosystem, especially the intermediaries who translate resources into real change is the most effective way forward.
