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RESHAPING THE ENTREPRENEURIAL JOURNEY OF FEMALES IN JORDAN


CONTACTS Endeavor Jordan 7 Kamal Junblat St. ,5th Circle, Amman Tel: +962 6 5939 160 endeavorjoinfo@endeavor.org Connect with Endeavor

World of Letters Abdoun Shamali, Ram Allah Building, Baalbeck St., Amman Tel: +962 6 6490 585 info@worldofletters.net Connect with World of Letters


ABOUT ENDEAVOR Established in 1997, Endeavor is leading the global high-impact entrepreneurship movement to drive economic growth and job creation by selecting, mentoring, and accelerating the best high-impact entrepreneurs around the world. Endeavor helps high-impact entrepreneurs scale up, multiply their impact, and pay it forward, inspiring future generations of founders. Headquartered in New York City, Endeavor currently supports 1,911 entrepreneurs leading 1,195 companies in 34+ markets around the world. Endeavor launched its operations in Jordan in 2009, and currently supports 36 Endeavor Entrepreneurs, representing 25 companies from varying industries.

ABOUT WORLD OF LETTERS World of Letters, founded in 2006, is building equitable and just communities by bridging the education, economic, and opportunity gaps in the MENA region. It supports organizations and governments to improve the quality of the educational system through innovative, contextualized, and multi-disciplinary curricula development in the Arabic language. World of Letters blend its curricula with Ed-Tech solutions that are powered by need-based training programs.

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Entrepreneurship is a critical enabler for socio-economic change and sustainable development as it creates new jobs, generates economic growth and brings about the production of new innovations.

communities are productive, their cities and regions are more likely to thrive, but when entrepreneurship communities struggle, cities and regions can become trapped in decline’1.

Within communities, job creation allows wider social circles (such as towns and

Entrepreneurship is therefore a timely tool

cities) to grow and thrive.

for Jordan given its sluggish economic growth and unemployment levels.

Insights from an Endeavor research report (2018) show that communities with fewer

In 2016, Jordan ranked 46th among

jobs and entrepreneurial opportunities

the 65 countries participating in the

tend to get trapped in decline. It states:

Global Entrepreneurship Monitor (GEM) survey. While the Total Early-Stage

‘Entrepreneurs play a critical role in cities and nations as they create new jobs, generate economic growth, and spread the development of new innovations. When local entrepreneurship

Entrepreneurship Activity (TEA) was 18.3% in 2004, it declined to 8.2% in 2016 as illustrated in figure2. This means that only 8.2% of working age people are in the entrepreneurial business.

Figure 2: TEA in Jordan

1 Fostering Productive Entrepreneurship Communites, Endeavor Insights, (2018). 2 Global Entrepreneurship Monitor (GEM), www.gemconsortium.org

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The GEM survey found that for every five

The limited participation of females in

individuals who are starting or running a

entrepreneurship is an outcome of a larger

new business, there is one individual who

challenge, which is their low participation

has discounted a business in the previous

in the workforce and high unemployment

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year . For women, market conditions and

rates. In 2018, the ILO estimated that only

lack of profitability was the main reason

14% of women participated in the labor

for business discontinuation (61%),

force, and of those active women, the

followed by familial obligations (16%) and

unemployment rate soared up to around

access to finance (13%).

23%.5 Today, there is a significant gap

Female entrepreneurship takes up a small

in labor market indicators between men

share of the country’s TEA, standing at

and women, but most importantly, Jordan

3.3% in 2016 compared to 12.8% for male

continues to have one of the lowest female

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TEA .

labor force participation rates globally.6

Figure 3: Labor market indicators, ILO Estimates, 2018

3 Global Entrepreneurship Monitor (GEM), www.gemconsortium.org 4 Global Entrepreneurship Monitor (GEM), www.gemconsortium.org 5 Data.worldbank.org. (2019). Unemployment, female (% of female labor force) (modeled ILO estimate6 World Bank, International Labour Organization, September 2018 6 Data.worldbank.org. (2019). Labor force participation rate, female (% of female population ages 15+) (modeled ILO estimate)

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To better understand why women continue to be disadvantaged, Endeavor Jordan, in partnership with World of Letters, under the Women As Partners in Progress initiative, set out to answer an important question: “What are the social, economic, and structural challenges women encounter when starting or growing a business in Jordan?� In order to explore the aforementioned challenges, this research report utilized four methodology tools. First, it reviewed existing literature and research around the topic. Using the information gathered from literature, semi-structured interview guides were then developed to be used during in-depth interviews with key

informants. These included executives of entrepreneurship support programs, select mentors, and investors, as well as male and female entrepreneurs in Jordan. Third, a validation session took place in which twenty-four business women from different backgrounds sat together to validate the findings of the interviews. Finally, a session gathering 60+ stakeholders was organized to discuss the findings and explore possible actions to enhance the opportunities of female entrepreneurs. The research indicates that women face several direct and indirect challenges that reduce their chances of benefiting equally from opportunities within Jordan’s entrepreneurial ecosystem. The results of the study can be summarized in five key findings:

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KEY FINDING 1

INVESTOR RELUCTANCE TO INVEST IN WOMEN-LED STARTUPS Research indicated that investors in Jordan are reluctant to support femaleled startups7. Given the added familial obligations women have, investors presume that women cannot manage their businesses as efficiently and effectively as their male counterparts. This puts pressure on female entrepreneurs, who must meet investors’ expectations regarding their ability to balance their roles as wives, mothers, and businesswomen. Executives at business accelerators also indicated that the same perceptions are affecting investment decisions, regardless of the marital status of the female entrepreneurs8. Women are aware of this and feel apprehensive about the effect of their maternal roles on their career prospects. For example, the vast majority of female business owners interviewed mentioned that, when meeting with investors, they must constantly answer questions about their ability to manage their businesses and maternal duties. Around 46.2% of the female entrepreneurs interviewed mentioned feeling the need to explain themselves in regard to their ability to balance both

business and personal obligations. In fact, some of the investors found these perceptions unacceptable but justifiable. Consequently, women entrepreneurs need to outperform men to be considered for investment. On the contrary, only one male interviewee stated that he felt similar pressure from stakeholders; paternal duties appear to have minimal impact. This pressure on businesswomen is palpable and limits female representation in the field: 46.2% of the female entrepreneurs interviewed recounted hesitating on this career choice because of the pressure to perfectly balance familial obligations with the demands of entrepreneurship.

“Male investors are reluctant to invest in women. If she is single, they worry about what would happen to the business if she gets married, and if she is married, they worry about what would happen to the business if she decides to have children.� - Female Investor

7 Wejdan Alakaleek & Sarah Y Cooper (2018), The female entrepreneurs financial networks: accessing finance for the emergence of technology-based firms in Jordan, Venture Capital, 20:2, 137-157 8 Salime Mehtap, Massimiliano M. Pellegrini, Andrea Caputo, Dianne H.B. Welsh (2017), Entrepreneurial intentions of young women in the Arab world: Socio-cultural and educational barriers, International Journal of Entrepreneurial Behavior & Research, Vol. 23 Issue: 6, pp.880-902 5


KEY FINDING 2

ACCESS TO FINANCE

start receiving the money. Difficulties

“Men are usually more knowledgeable of the market and are better at networking. Women need time to build their market knowledge and networks. Women also fear risk and prefer not to give up shares for equity funding; they don’t open up for partnerships. Nevertheless, women are persistent and hardworking.”

surrounding the process prompt many

- Male Investor

In Jordan, available funding is very limited, and it is hard to access for both men and women. Many entrepreneurs describe the process of funding in Jordan as “challenging” and “exhausting”. Even when investors make their decisions, it could take a year for the founder to actually

budding businesses to explore funding opportunities outside the country.

Women also have fewer chances of

Moreover, women feel that they are

receiving loans from banks because they

receiving a small share of the available

do not have collateral.9Social norms and

funding because investors prefer to invest

inheritance laws reduce women’s access

in male enterprises, as indicated earlier.

to assets, which are the main source

Investors interviewed, on the other hand,

of collateral requested for bank loans.

stated that women-led startups request

Jordan’s financial inclusion strategies

less funding and are usually not as

of 2016 and 2018 by the Central Bank

seasoned as male-led startups. Investors

of Jordan, and many commercial banks,

and mentors alike note a strong perception

recognized this limitation and effort

that men are better than women at

is underway to introduce financial

networking, which significantly hinders the

products and services for women in

women’s ability to raise funding as quickly.

business. Yet, many women are not

Investors also believe that women’s fear of

aware of these developments. Financial

risk-taking and unwillingness to sacrifice

management remains one of the hardest

shares for equity narrows their chances at

skills to master for both male and female

securing investment.

entrepreneurs. Technical training on

9 The World Bank, Economic Participation, Agency and Access to Justice in Jordan (2013). The World Bank, Women, Business and the Law (2018)

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financial management offered by service providers was mentioned as an important tool that helped many startups overcome this knowledge gap. However, 61.5% of the female entrepreneurs interviewed spoke to a lack of exposure to entrepreneurship in their educational experiences. Only one had taken an entrepreneurship class while pursuing a postgraduate studies degree, during which she began her entrepreneurial endeavors developing an application to help female entrepreneurs overcome the knowledge gap. In general, the interviewees sensed that men are closer to the world of business and money, while women felt that they need to overcome a larger knowledge gap than their male counterparts.

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KEY FINDING 3

ENTREPRENEURIAL SELF-EFFICACY Both men and women are not encouraged to start a business in Jordan due to societal pressure to conform to traditional paths of employment and stability, causing feelings of self-doubt and fear of failure in regard to entrepreneurship. Findings indicate that such feelings are more prominent among female entrepreneurs. Consequently, women tend to take more calculated steps when starting and growing their enterprises. In fact, 46.2% of female entrepreneurs who were interviewed for this report remarked that women must take much more calculated steps than men in the entrepreneurship arena, and that women are not as confident as men. They plan the expansion of their businesses to the finest detail, do not offer a product or a service until it is perfect, estimate their funding needs conservatively, and only ask for the exact amount of funding they need. Men, on the other hand, expand quickly and request higher amounts of funding. The general impression is that investors perceive this positively, characterizing men as bold and women as reluctant. However, others believe that male-led startups tend to make more mistakes and give up more equity than they should. One mentor stated:

“Men take more risks and step into things quickly. Women take calculated steps. So women grow slowly while men are more likely to fall into legal issues because they did not think things through.” - Female Mentor Women learn to deal with these feelings much later in their journeys and start taking more risks, therefore, limiting their early opportunities for growth.

“I’ve learned, later on, that being confident and taking risks is the only way forward. My confidence and persistence are the main reasons for my success.” - Female Entrepreneur

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KEY FINDING 4

SOCIAL VALUES VS. CAREER CHOICE As a whole, Jordan’s business community does not perceive entrepreneurship as a commendable career choice. Jordanians tend to gravitate towards traditional career paths to secure jobs that provide them with a stable income, social security, health insurance, and a prestigious title. Therefore, traditional employment is the widely encouraged career choice for both men and women compared with the riskier path of entrepreneurship. A report by Wamda Research Lab found that the regional workforce largely prefers jobs at a corporation or in the government: 64% and 41% find those respective options more appealing than working at a startup. 10Nevertheless, such observations are more noticeable among female-led startups. It is evident that while women’s parents push them to be high achievers during their educational years, aspirations for anything more than traditional employment are restricted by family and society, whether directly or indirectly. This is especially prevalent among women if their husbands or parents can provide for the family. Also, many parents believe that the entrepreneurial path will reduce their daughter’s chances of marriage and will hinder her ability to care for a family. One female entrepreneur remarked that she did not return to pitch practice because “[her]

parents think that if [she] becomes an entrepreneur, [she] will not get married.” It is not just family that opposes selfemployment; social groups also discourage women from starting businesses. Friends are known to believe employment is a safe option that provides women with the luxury of having more room for a personal life. For example, one female entrepreneur recalled her social circle making comments as to why she would work in such a sector and exhaust herself rather than focus on getting married and starting a family. Moreover, family structure largely places most of the familial responsibilities on the shoulders of women. Due to this, aspiring business women often feel caught up in a situation where they need to balance competing duties: responsibility to both their families and their businesses. In addition to dealing with guilt, which stems from this pressure, women are called upon to defend themselves against negative societal perceptions assuming they are not “good mothers” when they dedicate significant time to their businesses. Women end up scheduling their working hours around their household responsibilities. These responsibilities greatly reduce the women’s ability to immerse themselves in their business

10 Assaf, T., Haddad, H., Wyne, J. and Soueid, K. (2016). Access to Talent for MENA's Entrepreneurs. Wamda Research Lab

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by travelling and participating in events. Furthermore, interviewees experienced disapproval from stay-at-home mothers, who assumed a commitment to business indicated a lack of presence in their children’s lives. In some cases, which participants described the scenarios as hostile environments where they were “bullied” by full-time mothers. It is worth mentioning that key stakeholders in the ecosystem do not always realize that men and women face differing obligations. For example; some women feel intimidated when attending events in which the vast majority of the attendees are male. In fact, 69.2% of the interviewed female entrepreneurs commented on the environment at such events being male-dominated and that those events were often not accessible to female entrepreneurs with children because of their timing and location. When these events take place in the evenings or outside of town, women need to consider transportation and arrange for childcare while they are away. Women business owners, regardless of the age or the success of their businesses, need to continuously defend their career choice to their parents, husbands, friends, and the society-at-large.

They also need to combat the general perception that their work is not appreciated. Women often receive comments implying that they work to fill their time, rather than offering value. Gradually, women learn to deal with the continuous flow of these negative perceptions. In many cases, constantly battling these comments drains women’s energy, thus reducing their chances of benefiting equally from the ecosystem.

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KEY FINDING 5

LEGAL LIABILITY The final key area limiting the potential of female startups is the fear of legal liability. Indeed, 30.8% of the interviewed female entrepreneurs specifically referenced that legal liability is a threat for women in this field. Women fear imprisonment if their businesses default on payments or contracts and consequently take extremely cautious steps, proceeding at a slower pace than their male counterparts. In fact, women commonly avoid accessing commercial credit, believing that default of payment could bring imprisonment. This fear is further exacerbated by restrictive social norms that still find it unacceptable for a woman to be in court. Therefore, women in business try to settle cases outside court, even if this results in undue overpayment. Legal consequences are more severe for women given social norms and the lack of legal awareness. While legal advice is vital, even legal advisors sometimes conform to societal pressures, encouraging businesswomen to settle outside court — even if it is to their disadvantage. It is therefore harder for women in business to establish fair transactions with suppliers, clients, and employees as well as access commercial credit.

courts) are a way for women to challenge unfair and discriminatory practices. Despite the existence of such services, women are less likely to use the courts due to their lack of financial resources and fears of social shame. They are also more likely to be affected by personal status disputes, such as divorce, alimony, and child support where legal aid services are less developed. This particularly affects poorer women.

Furthermore, women face unique obstacles surrounding access to justice, even though the law is supposedly fair to both men and women. Justice sector services (such as those provided by 11


RECOMMENDATIONS 1. Complement technical training with agency-based training where women have a voice and a choice in the careers they wish to pursue, enabling them to take control of their lives. This would give women the confidence needed to fulfill their sense of economic independence and focus on the growth of their businesses. In addition, government, service providers and NGOs need to work at the national level and with grass-root communities to promote greater parental equality. This is attained by establishing a new identity for the “working mother� in a way where her work at home is not contradictory to her work in the public sphere. 2. Complement technical training with non-cognitive skills training for women entrepreneurs. There is a large body of evidence that non-cognitive skills are important in explaining entrepreneurial outcome. Additionally, training to develop behavior associated with entrepreneurial mindset has also proved to be more effective in improving outcomes of women-owned businesses compared to regular business training. Consequently, complimenting current technical training programs by non-cognitive skills training could overcome some of the challenges presented earlier. These trainings could include modules on risk attitudes and risk tolerance, teaching self-starting behavior, assertiveness, goal setting and identifying

and exploiting new opportunities. These trainings should be designed and delivered with the aim of developing new behaviors and entrepreneurial attitudes and not only for enhancing business knowledge. 3. Normalize the application process to reduce any potential gender bias during service provision. Making applications anonymous, especially during the early stages of application, is an easy step that the service providers could implement to level the playing field. Also, service providers could consider introducing scout programs to facilitate and normalize the interaction between investors and startups. An example of this model in Jordan is BeyondCapital’s Scout initiative in which a select group of Angel investors independently source deals and receive matching capital up to $25,000. Given that scout programs represent a new investment model, service providers should further investigate its advantages and its further application in Jordan. Moreover, service providers could publish regular gender-disaggregated data, including the share of women at different stages of the application process and the share of funding they receive. Sharing this data and discussing it among the management teams and boards of service providers could facilitate change towards expanding the opportunities of women in the ecosystem.

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4. Identify female role models and mentors from different backgrounds to inspire confidence in budding entrepreneurs. Specifically, those who have challenged traditional gender norms to set an example for future generations of young female entrepreneurs. Given the expansion of entrepreneurial support programs outside Amman, identification and training of community-based mentors to provide coaching and advice to other women in their localities should become part of the service providers’ long-term support measures. Mentors should also be trained to coach and advise entrepreneurs on technical business skills as well as provide encouragement and reassurance through the adversities in business growth and work-life balance. 5. Disseminate information about financial products and services provided by commercial banks. It is important to disseminate the knowledge of the available financial products for women offered by commercial banks. In fact, some banks also complement their financial products with technical services that are of chief importance to womenled start-ups. Banks can develop factsheets of available financial products and service providers can organize events introducing these products and services to their entrepreneurs. Clarifying the legal obligations and complications in case of default should also be part of these factsheets and events.

6. Extend access to support networks and peer communities. Events are important for networking and service providers should consider inclusion of all when planning these events. Service providers should consider how to ensure the inclusion of all entrepreneurs, regardless of their family responsibilities or place of residence, in the events they organize. Time and location of the venue could limit the possibility of women to participate in an event, or attend a training session. Examples to reduce these barriers could be using technology to deliver training programs, arranging supporting services such as transport for reduced costs and conducting events in multiple geographical areas. 7. Key competencies of entrepreneurship should be integrated into curricula and teacher-training within both formal and non-formal education. Learning has to provide common and equal opportunities to each gender, in order for any individual to engage in any type of employment, to succeed in any sector of the economy and to run his/her own businesses. Measures should be taken to overcome traditional, discriminatory cultural attitudes towards women as portrayed in curriculum and socialized by teachers. Educational programs should also focus on developing self-efficacy among women entrepreneurs and promote their roles in businesses, company management, and even boards.

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BIBLIOGRAPHY Assaf, T., Haddad, H., Wyne, J. and Soueid, K. (2016). Access to Talent for MENA's Entrepreneurs. Wamda Research Lab. Cooper, S. and Alakaleek, W. (2019). The female entrepreneurs financial networks: accessing finance for the emergence of technology-based firms in Jordan. [online] Taylor & Francis. Available at: http://www. tandfonline.com/doi/pdf/10.1080/136910 66.2017.1345120 [Accessed 3 Apr. 2019]. Hattab, H. (2010). The Effect of Environments’ Dimensions on the Growth of Female Entrepreneurial Projects in Jordan. Journal of Small Business & Entrepreneurship, 23(2), pp.211-223. Mehtap, S., Pellegrini, M., Caputo, A. and Welsh, D. (2017). Entrepreneurial intentions of young women in the Arab world. International Journal of Entrepreneurial Behavior & Research, 23(6), pp.880-902. Mitra, J. and Rauf, A. (2011). Role of Personal Networks in the Growth of Entrepreneurial Ventures of Ethnic Minority Female Entrepreneurs. SSRN Electronic Journal.

World Bank. (2014). Women in Jordan – Limited Economic Participation and Continued Inequality. [online] Available at: http://www.worldbank.org/en/news/ feature/2014/04/17/women-in-jordan--limited-economic-participation-andcontinued-inequality [Accessed 18 Dec. 2018]. World Bank. (2018). Women, Business and the Law - Gender Equality, Women Economic Empowerment - World Bank Group. [online] Available at: http://wbl. worldbank.org/ [Accessed 17 Dec. 2018]. World Bank. ( 2018). Unemployment, female (% of female labor force) (modeled ILO estimate) | Data. [online] Available at: https://data.worldbank.org/indicator/ SL.UEM.TOTL.FE.ZS?locations=JO [Accessed 11 Sep. 2019]. World Bank. (2019). Labor force participation rate, female (% of female population ages 15+) (modeled ILO estimate) at: https://data.worldbank.org/ indicator/SL.TLF.CACT.FE.ZS?locations=JO [Accessed 11 Sep. 2019].

Morris, R. and Török, L. (2018). FOSTERING PRODUCTIVE ENTREPRENEURSHIP COMMUNITIES.

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