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The Special Challenges and Opportunities of Women Entrepreneurs in the Greater Mekong Subregion
- 3. Challenges • They have potential to contribute a whole lot more but face challenges. • Challenges facing WOBs are generic and unique. • Gendered challenges relate to: childcare; access to capital due to property rights; low education; lack of role models; mobility restriction; negative societal / family attitudes and perceptions.
Editor's Notes
- In 55 of the 61 countries when parity in entrepreneurs was achieved GDP increased from 4 to 8 percent. When coupled with a push to become the “best in the region”, the results are better than ever. The McKinsey Global Institute (September 2015) has found that if all countries match the rate of improvement of the fastest-improving country in their region they could add as much as $12 trillion, or 11 percent, in annual 2025 GDP. Further they claim that when women play an identical role in labor markets to that of men this figure more than doubles ($28 trillion or 26 percent). Globally women account for 37 percent of WOBs. Women’s entrepreneurs comprise around 37 percent of SME owners throughout the world. In the Mekong region, the figure is higher than the global average. In Cambodia 55 percent of all businesses are owned by women, while in Lao PDR the figure drops to 40 percent and in Vietnam women own 25 percent of businesses. WOBs are good for society. Research conducted by MBI in partnership with the LWBA in Laos has found that women entrepreneurs are more likely to employ females, be better bosses, pay benefits. These findings echo international research which has found the same thing.
- These challenges include limited availability of capital, inadequate market information, ambiguous rules and regulations, and a shortage of skilled employees. However, women entrepreneurs also confront barriers that are gender-specific, including a lack of business and financial management training, insufficient networking opportunities, and difficulty in balancing work and family responsibilities. (The last one is a major challenge in Vietnam, where many husbands do not want their wives to be more successful.) The World Bank identifies the characteristics of WOBs as smaller size, home based businesses, with limited access to finance, lower profits, limited access to markets and limited business and technical skills. Opportunities for WOBs are limited by legal, institutional and business constraints. Some of the challenges include: lengthy registration, licensing and permit processes; lack of information on processes and weak property rights; financial constraints (lack of information on financial services, lack of collateral and infrastructure for business and perceived risk by financial institutions); limited access to networks, limited skills, mobility restrictions, low education, skills and experience especially in ICT; and a lack of childcare and restricted decision making within the household.
- While proxy indicators such as gender parity in education, achieving a critical mass of women in leadership and decision making, services and laws designed to stop gender based violence and improved access to healthcare provide a good indication of women’s economic advancement, there are other specific solutions which can promote women’s entrepreneurship. Targeted support for WOBs should not be perceived as positive discrimination. Its instead recognising the specific / unique challenges facing women, responding to the need for women to catch up to men and the role that WOBs can play in development – the economic argument. Access to finance: Tom talk about this but we know that preferential access to credit, such as using jewellery as collateral, weighting a business plan higher than a capital, savings plans, evidence of a contract agreement with a buyer all benefit WOBs. Trade promotion: women only missions, availability of information on trade through expos, websites, lists of opportunities and emerging markets all help women who may not have the same mobility as men, fewer networks, limited access to information. Business services and development: while established in GMS, still behind developed countries and still lack innovation, government support and outreach. One stop shops / incubators. Need for services not just start ups. Need to expand existing services to focus on online markets. Less emphasis on the capacity of women – and more on the development of new ideas, markets, networks and advisory services.
- Globally there is a shift towards the creation of inclusive businesses. We hear about mainstreaming gender alongside programs to foster businesses owned by minority groups or youth. Sure we see some examples of large – particularly private sector inidiatives such as the women on boards, global top 1000 women. Etc. but definitely a move towards mainstreaming. BUT there is still a need – more than ever given the persistent challenges – to get smarter about assistance to women entrepreneurs – Targeted initiatives. While this is OK for developed countries where WOBs established, this is bad news for women in GMS. (Perhaps we should suggest a phased approach for developing countries? – Targeted support combined with more and more inclusive programs, until certain targets are achieved, such as the number of WOBs to be increased to 35% for VN in 2020?) Some countries still don’t have reliable data on numbers of WOBs and no definition of what constitutes a WOB. Vietnam. Cant agree on what constritutes a woman owned business. Joint businesses.
- Although women entrepreneurs comprise around 40 percent of all business owners in the Mekong region, there is a shortage of evidence-based examples of what works and what does not. There is also a complete dearth of practical tools to measure and gauge success in promoting women’s entrepreneurship The benchmarking tool developed for ASEAN summit identifies7 index categories and 21 indicators of practical and strategic initiatives that will help women entrepreneurs grow their businesses. This benchmarking tool is designed to enable countries to simply measure national level policies and approaches against recognized regional and international approaches. The tools can be used as a diagnostic instrument, advocacy and planning tool. The comparison will foster healthy competition within the region to meet the international and regional “bests”, but it will also illuminate potential for cross country partnerships and opportunities to work together to find solutions to addressing common obstacles. For example, regional solutions that come to mind include: recognizing and promoting women entrepreneurs, building stronger institutions for women entrepreneurs with far-reaching networks and increasing women’s access to international trade and export opportunities.
- We have rolled out the tool in 6 countries and identified a number of good practices. Some of these include: angel investment, partnerships with banks – collateral etc. Singapore – Angel investors but also strong instittuions. Cambodia also shines with promising experiences in bsuiness incubation. Across the region we see a lack of policy promoting wobs and lack of targeted government support. This transfers into a lack of data, without the data there is a lack of strong institutions with the evidence base necessary to advocate for services / policy changes. Need for more partnerships with private sector – banks. Perhaps this can be achieved by working regionally. Perfect timing for the ASEAN summit.