Disclaimer: This English translation was produced with AI assistance and then reviewed by a human editor; the Arabic original was written wholly by the author.

Introduction

The true sustainability test for small enterprises launched through women’s economic empowerment programs in Yemen begins the moment when initial support—grants, production tools, and training—ends. While these provisions serve as a vital catalyst for launch, long-term viability hinges on whether these businesses can sustain themselves independently. This capacity relies heavily on tailoring assistance to specific market needs and extending support through the vulnerable early operational stages. During this phase, women entrepreneurs face numerous hurdles—from securing raw materials and managing operational costs to reaching customers—which are severely compounded by soaring material and transport expenses and a steep decline in local purchasing power. Together, these challenges threaten project continuity, restricting a business's capacity to cover basic operating costs or finance subsequent production cycles from its own revenues.

Follow-up monitoring data highlights the extent of this challenge. A 2022 CARE assessment found that 27 to 36 percent of beneficiaries across two evaluated programs were forced to suspend their economic activities just one to two years after the subsidy ended, citing poor profitability as the primary driver. This high rate of operational halt puts project sustainability to the test and raises critical questions regarding underlying design flaws in support interventions.

Addressing these questions is crucial due to their direct link to the efficient allocation of livelihood resources and to evaluating whether such programs can generate lasting income streams that outlast initial funding.

Drawing on the experiences of three micro-enterprise female owners in Yemen and insights from economic empowerment specialists, this article analyzes the structural dimensions of the post-subsidy sustainability gap, evaluating how program design, follow-up mechanisms, and non-financial services dictate project survival or failure.

Economic Empowerment Programs: Fragile Economy and Projects Beyond Monitoring

The war in Yemen has fundamentally reshaped economic roles within the Yemeni household. With the outbreak of renewed warfare, severe economic conditions, widespread job losses, and the frequent absence of male breadwinners have compelled an increasing number of women to seek alternative income streams to cover basic household expenses. This shift unfolds against the backdrop of a profound gender gap in economic participation, with female labor force participation standing at just 4.7% compared to 61.2% for men.

Within this context, economic empowerment and livelihood initiatives have become an integral component of humanitarian and development programs implemented by international and local organizations in Yemen. Notable examples include projects supported by UN Women, which provided 893 women with micro-grants, capacity-building, and essential goods and services in 2022. Similarly, under the "Emergency Crisis Response Project" between 2016 and 2022, the World Bank provided grants to support 13,000 smallholder farmers and 3,000 micro and small enterprises owned by women.

However, these interventions operate within an exceptionally challenging economic environment. According to World Bank data, Yemen's GDP contracted by 1.5% in 2025, with an anticipated further contraction of 0.5% in 2026, driven by tight liquidity, a deteriorating business climate, and weak domestic demand. In internationally recognized government areas, inflation averaged roughly 20% in 2025, severely eroding household purchasing power, while currency depreciation during the first half of the year further drove up the cost of imports. Conversely, in Houthi-controlled areas, infrastructure damage to Red Sea ports—particularly Hodeidah—reduced efficiency and disrupted operations, slowing the flow of fuel, food, and essential commodity imports.

Small household enterprises navigate these conditions under immense pressure. Skyrocketing raw material and transportation expenses coincide with reduced consumer spending capacity, as distressed households allocate most of their tight budgets primarily to food and basic survival needs.

The informal nature of many women's home-based businesses exposes another critical gap in support programs’ evaluation mechanisms: the profound difficulty of tracking project viability once initial funding ends. A 2024 report on women’s economic empowerment in Yemen highlighted the limited availability of up-to-date data on women’s work in the informal sector, and the lack of systematic mapping since 2015 for programs aimed at boosting their economic participation. It also revealed a lack of analytical frameworks to measure long-term impact. This tracking deficit stems partly from the structural nature of informal home-based work, which often includes seasonal activities that evade formal administrative metrics.

Furthermore, program design frequently concentrates support in traditionally gendered sectors—such as sewing, cosmetology, and incense production—which quickly face market saturation in small and rural communities. The absence of regular data makes it difficult to identify surviving versus lapsed projects or evaluate how program design shapes post-subsidy outcomes.

After the Subsidy: Market Testing and Sustainability

Interviews for this article reveal three distinct trajectories for enterprises after external support ends: early operational failure, fragile continuity, and relative stability. These case studies illustrate how post-launch survival is shaped by a combination of ongoing mentorship, entrepreneurial experience, and the adaptability of management after initial funding concludes.

Early Production Stoppage: The Case of Fatima Hussain

In 2021, Fatima Hussain¹ started a home-based business that produced pillows stuffed with local kapok cotton.² After receiving a nine-month training program and a small financial grant, Fatima decided to transition from home-based production to a formal business setting. She immediately encountered operational hurdles, including supply-chain communication, quality control, pricing, and customer acquisition. Fatima noted that her most critical need during this phase was practical guidance and mentorship through her very first production cycle.

Fatima used her grant to purchase raw cotton and produce an initial batch of pillows. However, when the intermediary who facilitated her access to kapok-growing regions and farmers withdrew, her supply chain collapsed. The high cost of travel to remote cotton farms—compounded by safety and cultural barriers requiring a legal guardian (Mahram) to accompany her on her travels—made direct sourcing unsustainable. Unable to consistently secure raw materials or reach her consumer base, Fatima's enterprise folded after a year of continuous attempts.

An Unclear Profitability Project: The Case of Basma

Basma Mohammed³ founded her enterprise in 2022 after receiving entrepreneurship training and a financial grant from an entrepreneurship support program, converting a room in her home into an art workshop for glass painting and souvenir production. While the business has technically remained active, it struggles to generate consistent profits, surviving instead on sporadic, intermittent orders. Basma notes that her financial returns remain marginal relative to the escalating costs of paints, specialized materials, and packaging. Furthermore, she operates without formal accounting practices, failing to systematically segregate material costs, labor time, and net profit. In evaluating her project's performance, Basma treats occasional customer orders as a sufficient proxy for viability, bypassing rigorous calculations of net return.

Basma believes that the artistic nature of her products compounds the difficulty of securing steady demand given declining purchasing power, as consumers place such items outside their spending priorities. Consequently, the enterprise persists in name yet operates entirely within an analytical blind spot—lacking the financial metrics required to determine whether it actually covers its overhead or generates a sustainable return.

Relative Stability through Experience and Structured Support

Five years ago, Ijlal Mohammed⁴ stepped into the perfume and incense business with only ten days of basic training—offered by an entrepreneurship program—under her belt. For a long time, her sales barely extended beyond a small, local circle of sporadic buyers—a bottleneck that kept her income unpredictable and made growth nearly impossible. Everything changed, however, when she joined an intensive, year-long program offering advanced training, hands-on mentorship, and financial grants, with a strong emphasis on digital marketing and business management.

The training helped her refine her production and marketing cycles and master her bookkeeping skills. By continuing to take part in additional support initiatives, Ijlal grew her customer base far beyond her neighborhood, reaching clients in neighboring governorates. Ultimately, her journey demonstrates that a business's stability is the result of accumulated experience, sharpened management skills, and taking full advantage of a diversity of training and support programs.

The experiences of the three women highlight a critical turning point: the transition from initial support to independent operation. At this stage, a business's ability to sustain itself and fund its own operational cycle from revenue is put to the test. While all three projects benefited from launch or development support, their trajectories diverged significantly once the programs ended. Ijlal achieved relative stability through accumulated experience, continuous training, and steady improvements in management, production, and marketing. In contrast, Fatima's project faltered due to a broken supply chain and a lack of operational follow-up. Meanwhile, Basma's project remained vulnerable, constrained by limited demand and a lack of clear calculations for costs and net profits. This divergence exposes a major gap between launching a business and preparing it to survive after subsidies end—a challenge closely tied to the owner's experience, ongoing mentorship, and their ability to secure supplies and access markets. While these cases offer valuable insights, a rigorous assessment of empowerment programs in Yemen ultimately requires reliable, long-term data that tracks businesses after support ends to measure their ability to transform into effective, stable, and lasting projects.

Where Does the Sustainability Gap Lie?

According to economic empowerment specialists, sustainability gaps and imbalances typically manifest in five core areas related to program design and follow-up:

Market and Supply Chains

The survival of any small business depends on a steady production and sales cycle—securing raw materials, covering costs, and using revenues to fund the next round of production. For instance, Fatima's project was derailed by supply chain disruptions and the absence of reliable intermediaries, alongside the challenge of building a steady customer base. Similarly, Basma noted that customers often view her products as non-essential or luxury items, which severely restricts market demand.

Hanan Nasher,⁵ Monitoring and Evaluation Officer at the Small and Micro Enterprise Promotion Service (SMEPS), explained in an interview that weak sales and marketing skills often prevent female entrepreneurs from effectively reaching customers and identifying shifting market needs, regardless of product quality. She also noted that raw material shortages are a leading cause of project suspensions. Nasher points out that reliable access to raw materials, stable pricing, and manageable transport costs remain decisive factors for survival—particularly given the sharp regional disparities in exchange rates across Yemen. According to Nasher, relying on locally sourced materials significantly lowers production costs and minimizes supply chain vulnerabilities, whereas sourcing materials from remote locations or depending heavily on imports greatly increases these risks.

Financial Management and Profit Accounting

Another critical gap lies in the entrepreneur's limited ability to accurately assess her project's true financial health. In Basma's case, sporadic orders keep her business technically active, yet her profitability remains unknown due to a lack of regular record-keeping for costs and sales. Confusing sales activity with actual profitability is a common trap, often causing business owners to keep operating without realizing whether they are covering their expenses. Nasher notes that a lack of practical knowledge in calculating operating costs and distinguishing between gross revenue and net profit is a primary hurdle for small enterprises—even among those with exceptional production skills. This financial literacy is especially critical in Yemen's volatile economic environment, where fluctuating exchange rates and shifting production and transport costs make it vital for owners to know whether their revenues can sustain ongoing operations and fund future production cycles.

Family and Social Restrictions

Family responsibilities and freedom-of-movement restrictions heavily constrain the time women entrepreneurs can dedicate to their businesses, limiting their ability to access markets and build professional networks. Zikra Al-Jabri, Executive Director of the Al-Amal Foundation for Training and Entrepreneurship (Riyadh),⁶ noted in an interview that men generally enjoy broader opportunities for field learning due to greater freedom of movement, an active presence in markets and workspaces, and easier communication with industry veterans. Concurrently, women must shoulder domestic care work alongside enterprise management, drastically reducing the time available for learning, experimentation, business development, and relationship-building with customers and suppliers. Furthermore, mobility restrictions compound these challenges by increasing the time and cost required to complete everyday tasks.

Al-Jabri also points out that these social restrictions extend into the digital sphere, where women entrepreneurs face unique hurdles in online marketing. In many cases, public attention can unfairly shift away from product quality toward scrutiny of the women themselves. Al-Jabri sums up this stark disparity in experience-building by pointing out that women must earn their entrepreneurial expertise “with a lot of hard work and effort”.

Entrepreneurial Capabilities and Financial Independence

Enterprise sustainability is deeply linked to core entrepreneurial skills that empower women to make strategic decisions and manage independent economic activity. These include initiative-taking, planning, financial discipline, self-learning, and the ability to build professional networks while drawing lessons from past experiences.

In an interview, Sawsan Bin Sheikh,⁷ former Yemen program manager at Internews, explains that failing to develop the entrepreneur's capabilities creates a dangerous gap between simply owning production tools and actually knowing how to manage a business. Bin Sheikh places capability-building at the very heart of the empowerment process, arguing that investing in the entrepreneur must precede investing in the project itself.

The impact of these entrepreneurial skills directly dictates a project's ability to achieve true financial independence. Hanan Nasher warns that repeatedly disbursing grants without strict controls—or without a clear pathway for teaching entrepreneurs how to manage resources and achieve self-financing—can perpetuate a state of dependency on external aid, leaving the business's survival entirely dependent on the next round of subsidies.

Similarly, Al-Jabri notes that treating interventions as mere temporary assistance undermines long-term economic empowerment, as this mindset restricts an owner's ability to manage operations independently, refine her skills, and find practical solutions to market challenges.

Follow-Up and Program Design

The follow-up crisis becomes most evident at the start-up phase, as the entrepreneur tries to translate training into real-world operational decisions about suppliers, pricing, and production. Nasher notes that post-support follow-up is only truly valuable when it focuses on diagnosing the technical, financial, and marketing hurdles facing a project. She criticizes programs that reduce follow-up to mere compliance visits—checking only whether beneficiaries kept their equipment rather than sold it—without genuinely evaluating the production process and its underlying challenges. Furthermore, she points out that many programs sever ties with entrepreneurs immediately upon delivering support, lacking a “safe exit plan” to manage the transition from direct aid to ongoing referral and monitoring mechanisms.

Al-Jabri explains that a project's entry into the market reveals its true needs, whether for financial, marketing, or legal guidance. She highlights a stark mismatch between the needs of a newly launched idea and those of an established or struggling business, criticizing the rigid, one-size-fits-all design of many support programs. Applying the same path to every beneficiary weakens a program's ability to adapt to different business lifecycles and diverse needs. Concluding this thought, Bin Sheikh describes the post-launch phase as the “real work phase”, noting that it cannot succeed without continuous accompaniment and mentorship.

Conclusion

From Subsidy to Sustainability: Lessons from Yemen's Women-Led Enterprises

Ultimately, small businesses established through women's economic empowerment programs in Yemen often stall due to an intricate web of challenges —market fragility, design flaws in support programs, and entrenched family and social constraints. Together, these factors expose a glaring sustainability gap as businesses transition into independent operation. The case studies and expert insights demonstrate that bridging this gap requires sustained support across every phase of a project's lifecycle, from initial idea testing and market analysis through to post-support operations and mentoring. To achieve lasting impact, future initiatives should prioritize the following key areas:

• Diagnosing Project Needs and Market Realities: Tailoring the type and scale of support to match each project's specific lifecycle stage and needs. Crucially, comprehensive market analyses must precede any funding decisions to prevent oversaturating local markets with identical projects.
• Entrepreneurial Capacity Building: Grounding training programs in the real-world operational challenges of each business so owners can immediately apply what they learn to daily management and decision-making. Ongoing mentorship should allow experts to review these decisions, help entrepreneurs learn from outcomes, and then gradually step back to foster true independence in management and problem-solving.
• Extending Support Through the First Operating Cycle: Ensuring that assistance continues through the crucial phase of utilizing grants or production tools to execute the business's very first operating cycle. Active follow-up during this window helps compare projected costs against actual expenses, gauge real market demand, and adjust business plans early. Under this model, handing over equipment or grants marks the true beginning—rather than the end—of practical, hands-on support. 
• Providing Ongoing Advisory Follow-Up: Transforming monitoring visits into practical advisory services designed to troubleshoot emergency operational challenges during the critical first months. This specialized support should be delivered by mentors with financial, marketing, and technical expertise, following a structured exit plan that ultimately connects the entrepreneur to long-term local service providers and networks.  
• Connecting Projects to Broader Markets: Facilitating access to alternative local sources for raw materials, leveraging digital marketing platforms, and unlocking supply channels for retail stores and the private sector. Doing so strengthens a business's ability to sustain its resources, expand its customer base, and reduce vulnerability to unstable, ad hoc individual relationships.
• Aligning Programs with Family and Social Realities: Actively accommodating the domestic responsibilities and freedom-of-movement restrictions faced by female entrepreneurs when designing and scheduling training, mentorship, and service delivery. Effective practical options include remote training modules, flexible scheduling, targeted digital marketing support, and structural arrangements that minimize the need for frequent, costly commuting.
• Measuring Results Beyond the Program Lifecycle: Conducting structured follow-ups with projects six months and one-year post-support, using performance indicators that reflect true business viability. Key metrics should include sales consistency, accurate calculation of costs and net profit, the ability to independently finance a new production cycle, and the retention of a stable customer base. Tracking these data points provides an empirical foundation for accurately assessing program impact and refining future interventions.

By embedding these priorities into program design and evaluation, implementers can transform the post-support phase from an afterthought into a cornerstone of sustainable development. Ultimately, a project's proven ability to maintain operations, cover its costs, and generate steady financial returns should serve as the true benchmark for program effectiveness—and the foundation for shaping future interventions.