Connecting women entrepreneurs over WhatsApp for networking and business growth in Ghana

Sub-Saharan Africa is the only region of the world where there are more female entrepreneurs than male entrepreneurs. However, most of these female-owned businesses are microenterprises. In addition, women-owned businesses earn 34% lower profits than male-owned ones. Understanding the constraints faced by female entrepreneurs is, therefore, vital for fostering economic growth. 

Across many settings, interfirm relationships and access to professional networks have been shown to be key determinants of business success (see Ashraf et al., 2019; Kanter, 1994; Cai and Szeidl, 2018). Building business networks and forming collaborations can help firms adopt new business practices, expand market reach, innovate, and gain new customers (Kanter, 1994; Cai and Szeidl, 2018). However, due to gender norms and cultural expectations, female entrepreneurs often face social constraints that restrict their participation in business-related activities, leading to smaller networks and fewer connections to other firms (World Bank Group, 2019). As a result, women are more likely to rely on their friends and family members when doing business and have limited access to high-quality entrepreneurs with whom to network and grow their businesses. 

Can online networking improve women’s businesses?

Increasing networking opportunities may be an effective solution to closing the gender gap in entrepreneurial performance. However, past interventions aiming to expand business networks have primarily focused on male entrepreneurs and relied on in-person networking activities. This raises questions about scalability and generalisability to women, given that women likely face additional constraints such as limited mobility and household responsibilities that make it harder for them to engage in traditional networking settings. Online networking offers a potential, flexible, accessible solution by allowing female entrepreneurs to build professional relationships without needing extensive travel. Yet, evidence is limited on how creating online interfirm networks can support the growth of female-owned businesses and close the gender gap in entrepreneurship.

To address this, we conducted a field experiment in Ghana to study how access to online networking opportunities could affect the performance of female-owned businesses. We targeted 1,771 female entrepreneurs who had applied to a COVID-19 Stimulus Fund operated by several local NGOs—the Women’s Empowerment & Investment Group (WEIG), Annan Capital Partners (ACP), and GUBA Foundation—with the aim of supporting high-growth female-owned enterprises. 

Connecting female entrepreneurs through WhatsApp groups

We randomly assigned the entrepreneurs into two groups: one group received access to networking opportunities through WhatsApp, while the other group received the same networking opportunities with additional legal support.

The first group was placed into small WhatsApp networking groups of eight entrepreneurs each. They participated in two rounds of weekly networking activities, where each week, participants were paired up to meet virtually. The aim was to help these women expand their business networks and increase collaboration opportunities.

The second group had the same setup but with the added benefit of weekly legal support sessions. These sessions, also delivered via WhatsApp by a local corporate lawyer, covered topics like reducing risks in business collaborations and drafting contracts. Participants could also book one-on-one consultations with the lawyer during the four-month programme.

Online networking enhances innovation, business practices, and profits

Our results are encouraging. One year after the intervention, we found that access to online networking groups has a significant positive impact on business outcomes:

• Innovation: Treated entrepreneurs are 33-36% more likely to introduce changes to their businesses, such as launching new products or trying new marketing strategies.
• Business practices: There is a noticeable improvement in marketing and financial planning practices. For example, treated businesses are more likely to use advertisements, offer special deals, and regularly review their financial performance.
• Profits: Business profits grow by 26%. Interestingly, the biggest gains are seen in businesses that were already performing well, showing that those in the upper 60th percentile benefited most from the intervention.

One key finding was that the legal support provided to the second group didn’t significantly affect overall outcomes. This suggests that reducing networking constraints is the primary driver of this improvement in business performance.

Figure 1: Effect on innovation

Figure 2: Effect on monthly profits

The role of business collaborations and peers

Why did access to online networking groups lead to an improvement in business outcomes? We find that the results cannot be explained by changes in business ambitions or measures of female empowerment. Instead, we show that the results can be explained by two important channels. 

1. We find that the intervention changed the nature of business collaborations. Entrepreneurs in the treatment group reduced collaborations with friends and family, choosing instead to work with business network members. This shift in collaborators comes from a change in beliefs about the quality of potential collaborators, with treated entrepreneurs perceiving a higher return to collaborating with someone external to their friends and family network. Consistent with the change in beliefs, the treatment group also exerted greater search effort and are more likely to contact and meet firms external to their existing friends and family network.
2. We show that peer effects play a key role in explaining our effects. Female entrepreneurs randomly assigned to WhatsApp groups with more entrepreneurs who are college-educated, have better baseline business practices, and have higher baseline sales and profits are more likely to innovate, improve business practices, and increase profits. We also find that businesses of entrepreneurs in groups with a larger share of peers from the same industry are less likely to improve. This suggests that networking with high-quality entrepreneurs with diverse experiences can accelerate firm growth and innovation. 

Scope for sustained networking opportunities for women entrepreneurs

These results, however, did not persist in the long term. Three years after the intervention, most of the positive effects have faded. We find little evidence of sustained improvements in innovation, business practices, or profitability. The initial network expansion also didn’t last—only 3% of the treated entrepreneurs are still in touch with the contacts they made through the intervention. 

While the gender gap in entrepreneurship is a persistent challenge, our results highlight the potentially large benefits of providing networking opportunities for growth-oriented female-owned enterprises. Importantly, our findings demonstrate that even a low-cost, light-touch online intervention can yield substantial improvements in firm outcomes. A cost-benefit analysis reveals that the intervention generated 14 times the return in profits for the treated entrepreneurs, suggesting that online networking programmes can be an effective policy tool to promote business growth among female entrepreneurs. However, as our long-run results suggest, the persistence of these benefits over time may depend on sustained engagement or additional support, a factor that should be considered in designing future interventions.