Loans Are Not Enough: Social Safety Nets Key
to Lifting Women Nano-Entrepreneurs Out of Poverty, Study Finds

Mindanao, Philippines — Market-based approaches such as microloans are not enough to help women nano-entrepreneurs escape poverty. What they urgently need are strong social safety nets—savings, insurance, childcare support, and disaster assistance—to survive repeated crises and build sustainable livelihoods. These social safety net strategies are needed alongside microfinance services to lift the poorest out of poverty.

This is the central finding of a new study, Resilience of Women Entrepreneurs in Mindanao and the Impact of Access to Finance and Digital Technologies (Download here), released by the Ateneo Center for Social Entrepreneurship (ACSEnt) and Social Enterprise Development Partnerships, Inc., in partnership with the World Bank and Australian Aid. The research is based on longitudinal surveys from 2020 to 2023 and focus group discussions conducted in 2024 among women nano-entrepreneurs in CARAGA and Davao regions.

Credit Alone Did Not Deliver Recovery

Despite years of access to microfinance, only about one in three women had returned to normal business operations by 2023 from the height of the COVID-19 pandemic in March 2020. Repeated shocks—from typhoons and floods to inflation and a major earthquake—prevented many from fully recovering.

“Loans helped women cope in the short term, but they did not protect livelihoods from collapsing again and again,” explained Vince Rapisura, the lead researcher. “In environments of constant crisis, debt alone cannot deliver resilience,” he added.

Women Rely on Safety Nets, Not Loans, to Survive Crises

When asked how they actually coped with disasters and economic shocks, women consistently identified cutting household expenses, withdrawing savings, and finding additional income as the most effective strategies. Borrowing—from friends, relatives, or formal lenders—was rated among the least effective coping mechanisms.

In identifying ideal support mechanisms, respondents prioritized savings and insurance, not credit. Community-based insurance systems such as damayan were especially valued, providing fast payouts—often within 24 hours—during emergencies. In contrast, commercial insurance products were seen as slow, complex, and inaccessible.

Rapisura emphasized, “These findings show that women entrepreneurs are not asking for more loans; they are asking for protection from external risks.”

Disasters Are the Norm, Not the Exception

All respondents were affected by the COVID-19 pandemic. Beyond this, 22% were hit by Typhoon Vicky in 2020, 16% by the 7.5-magnitude earthquake in 2023, and another 22% by floods in early 2024. These crises occurred in rapid succession, leaving little time for recovery.

Under such conditions, market-based solutions that assume stability and growth cycles fall short. Without safety nets, women are forced to sell assets, drain meager savings, or take on debt—deepening, rather than reducing, poverty.

Care Work and Childcare Gaps Undermine Enterprise Growth

Women face a “double burden” in business and at home. In 2023, as the economy fully reopened and men returned to formal employment, there was a spike in stopped Income Generating Activities (IGAs) for women. Many women were forced to exit the labor force or stop their IGAs to care for their children when face-to-face classes resumed. Ultimately, only about one in three women were able to return their businesses to normal following these continuous disruptions. This highlights how unpaid care work limits women’s economic participation, as childcare responsibilities fell disproportionately on them..

“Childcare is economic infrastructure,” Rapisura argues, calling on the government to invest in accessible, well-staffed daycare centers so women can sustain their livelihoods.

MFIs Filling a Social Protection Gap

Focus group discussions revealed that microfinance institutions (MFIs)—not government programs—were often the most reliable source of support during crises. While MFIs are primarily financial institutions, many effectively functioned as informal social protection providers through flexible savings, insurance, and emergency assistance.

The study urges stronger government–MFI partnerships to scale up these protective mechanisms rather than relying solely on credit expansion.

Policy Message: Protect First, Grow Later

The report calls for a shift in development strategy for nano-entrepreneurs, emphasizing:

1. Strengthen Social Protection:
   1. The government must prioritize improving child care support to free up women’s time for livelihood activities.
   1. The government must ease membership in social insurance programs (Pag-IBIG, SSS, and PhilHealth), as many women are excluded due to high costs or lack of required IDs.
   1. Institutionalize cash transfer programs in partnership with microfinance institutions to veer away from patronage politics.
2. Ensure Disaster Coverage:
   1. The government should include disaster coverage in social insurance programs.
   1. Microfinance institutions are effective partners in implementing this since this form part of their risk mitigation strategy to protect their portfolio
3. Support Non-Debt Rebuilding:
   1. MFIs should be supported to act as conduits for government livelihood and recovery funds, combining grants with non-interest-bearing loans.
   1. Zero-percent interest, long-term micro housing loans are also needed to help families rebuild after devastating events.

“Women nano-entrepreneurs are already working hard,” Rapisura said. “What holds them back is not a lack of effort or entrepreneurship—but a lack of protection. Without social safety nets, loans alone cannot lift them out of poverty,” he concludes.

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About the Study

The study was conducted by the Ateneo Center for Social Entrepreneurship and Social Enterprise Development Partnerships, Inc. (SEDPI) in partnership with the World Bank and Australian Aid, drawing on SEDPI longitudinal survey data (2020–2023) and focus group discussions in 2024 among women nano-entrepreneurs in Mindanao.

For media inquiries:

Vince Rapisura
Presidente and Co-founder
SEDPI Group of Social Enterprises
vincent.rapisura@sedpi.com
+63 918 9367003