Transcript of "Challenges of SME's and women in business"
CHALLENGES OF WOMEN IN SMES By Randa Abousleiman Managing Partner in Abousleiman and Partners.
SUMMARY— Women and SMEs— Current Legal Framework of SMEs & Proposed Amendments― Access to Financing― Conclusions 2
WOMEN AND SMESMajority of women owned businesses in Lebanon are informal: ― Such businesses do not benefit from Social Security ― Average income is low, which sustains poverty ― Chances of business expansion are significantly reduced 3
LEGAL HURDLES TO MOVE TO THE FORMAL SECTOR: ― High costs involved in establishing formal businesses ― Lack of knowledge on the legal options available ― Legal framework not adapted to cater to SMEs • business concerns do not limit personal liability • corporate structures available, such as SARLs and SALs, are too cumbersome 4
ENVISAGED SOLUTION Improving the legal framework and reducing registration costs to encourage women who own businesses to formally register their businesses.Advantages: ― Participating in economic growth ― Benefitting from Social Security coverage ― Having a legal structure that would facilitate access to financing 5
LEGAL FRAMEWORK OF SMES― No official legal definition of SMEs.― One legislative attempt: Article 2 of law n° 24 dated February 23, 1999, defines SMEs as being enterprises employing a maximum of 40 employees.― Since more then 80% of businesses fall within the scope of this definition, we need a more developed legal definition of SMEs to cater to the needs of the different categories of SMEs: Medium Sized Enterprises Small Enterprises Micro Enterprises Cumulative thresholds: Staff Headcount Annual turnover 6
LEGAL ACTIONS TO ENCOURAGE THE ESTABLISHMENT OF FORMAL WOMEN-OWNED BUSINESSES: ― Applying tax incentives for businesses that fall within the scope of the SMEs by establishing a favorable fiscal regime. ― Reducing the costs relating to the incorporation of existing corporate structure ― Creating new legal corporate structure such as an “Entreprise Unipersonnelle à Responsabilité Limitée” (Sole enterprises with limited liability) 7
ACCESS TO FINANCING― Most of women-owned businesses are self-financed― Difficulty in obtaining banking loans: • insufficiency of bank loans • high pricing of loans • high level of collateralization― Solutions implemented in Lebanon to remedy the unavailability of financing: • Kafalat guaranteed loans. • Micro – credit regulations introduced by Banque du Liban. 8
CONCLUSION1. Implement a legal framework that is not complicated to encourage women to formally establish businesses2. Reduce business registration costs and minimize the paperwork required to register a business3. Establishing a One-Stop shop for micro-enterprises4. Support and further develop the services offered by Kafalat and develop similar enterprises. 9
CONCLUSION5. Offer women access to further education and business training.6. Support women to have greater market exposure, technical know-how, as well as networking and strategic partnership opportunities. 10
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