For over a decade, access to the digital economy has been shown to be a catalyst for economic empowerment. Digital payments and services like mobile money, online banking, and digital payment cards and wallets can enhance micro and small enterprises’ agency, helping their owners gain access to other financial services.
CGAP’s Impact Pathfinder makes reliable evidence available to financial services providers and others, which shows that the uptake and use of digital payments can benefit women-owned micro and small enterprises in various ways. It can reduce barriers to entrepreneurship, enable business growth – for example by creating efficiencies and providing access to digital markets – and promote financial security.
Since its founding in 2014, the Mastercard Center for Inclusive Growth (the Center) has been committed to using a data-driven approach to financial inclusion and economic opportunity for small businesses and entrepreneurs around the world. From programs like Strive Women to partnerships with institutions like Accion, the Center aims to bring everyone into the digital economy so small business owners have access to digital tools and resources to grow their business safely.
CGAP and the Center have been working together since 2021 to ensure that entrepreneurs and small business owners, especially women, have access to the digital economy. This means that small businesses can leverage and use digital payments and tools, which expand economic participation, increase earnings stability, and strengthen business performance. The Center’s findings on digital payments are in line with those of the Impact Pathfinder, allowing for a partnership that maximizes impact.
Snapshot from the Impact Pathfinder
A closer look at the evidence from the Impact Pathfinder reveals that the benefits of using digital payments include:
- Women who use digital payments are more likely to start businesses: A study in East Africa found that women using mobile money were ~28% more likely to become entrepreneurs compared to non-users. Digital payments allowed them to more easily receive financial support from family, save digitally, and access digital credit due to their now having transaction history.
- Women using digital payments have greater agency and their enterprises tend to perform better: Receiving loans digitally can make a significant difference for many women entrepreneurs. A study from Uganda found that women micro-entrepreneurs receiving loan disbursements via mobile money saw a 15% increase in business profits and an 11% rise in business capital compared to those receiving cash. The study suggests that mobile money gives women greater agency, allowing them to manage funds discreetly, reduce familial pressures to share resources, and reinvest more strategically in their businesses.
- Digital payments stabilize women’s earnings: For many self-employed women and micro-entrepreneurs, digital payments help stabilize earnings by reducing transaction costs, increasing payment reliability, and providing a digital record for financial planning. Women using mobile money are less likely to experience irregular income as digital payments reduce cash flow disruptions and enable more predictable income management.
The Pathfinder and the Mastercard Center concur, however, that digital payments alone will not suffice. To ensure that digital payments lead to a long-term impact, they must be bundled with complementary financial services, tools, and business support. That could include policies and efforts such as:
- Expanding access to affordable credit: Alternative credit risk assessments based on transaction histories can help women entrepreneurs qualify for business financing without traditional collateral requirements. Targeted interventions, such as directing funds into women-controlled accounts and offering asset-based financing, empower women to retain earnings and reinvest in their businesses.
- Strengthening financial literacy and business training: Financial literacy programs improve women’s ability to use digital tools effectively. Embedding training into digital platforms at a “teachable” moment, such as product onboarding, can help women develop investment strategies and manage growth sustainably.
- Giving women entrepreneurs autonomy: Measures such as granting women the legal right to own assets and sign contracts independently, providing targeted subsidies, and streamlining business registration, providing targeted subsidies, and streamlining business registration enable women to participate fully in formal financial and business sectors. Additionally, the ability to save and track finances digitally reduces cash flow volatility, enabling smarter investment in business expansion, and enabling women to participate fully in formal financial and business sectors. Additionally, the ability to save and track finances digitally reduces cash flow volatility, enabling smarter investment in business expansion.
Most experts agree that digital payments are an effective gateway to empowerment, but the sector can benefit from clear strategies to translate payment use into sustained improvement in women’s economic participation. The challenge ahead is not about proving that digital payments can work for women – it’s about ensuring they work sustainably for all small businesses and entrepreneurs.
Achieving this, as CGAP has proposed, requires a whole-of-market effort to create an inclusive financial ecosystem. By integrating digital payments with credit and market access, targeted financial literacy, and regulatory safeguards, women entrepreneurs can move beyond subsistence-level earnings to become scalable, resilient businesses.
