Seeing the potential of women entrepreneurs will drive investment in gender and equality

Seeing the potential of women entrepreneurs will drive investment in gender and equality 

The United Nation’s call for accelerated progress towards investment in women this International Women’s Day highlights an important issue: women entrepreneurs in our region continue to be invisible in the formal economy and financial system. If we are to truly ‘count her in’, the first vital step is for investors to see the potential and value of women entrepreneurs,and the financial sector to provide access to fair and safe loans for eligible people. 

As we mark International Women’s Day, the barriers facing women entrepreneurs in our region remain significant. Women continue to be underserved and unseen by financial institutions, and the lack of access to financial products and services to meet the needs of marginalised groups such as women puts them at further risk. Many banks require collateral that women simply do not have, due to the fact that business and houses are usually in the name of the man in the family. Banks discriminate against women clients, and the result is that many vulnerable women turn to loan sharks to access finance. 

This is a global trend, and currently nearly 1 billion women worldwide have no access to formal banking services, according to the International Monetary Fund. The International Finance Corporation has estimated that, worldwide, a $300 billion gap in financing exists for formal, women-owned small businesses. UN Women have told us that more than 70 percent of women-owned small and medium enterprises have inadequate or no access to financial services.

Women also have less opportunity than men to access financial training and skills to build their business and take control of their livelihoods. In Nepal, the financial literacy score for men is higher than women by 7.5 percentage points and the financial knowledge score of men is higher than women by 17.9 percent. In Cambodia, financial literacy rates for women are at 16%, lower than the national rate of 18%.

Economic empowerment for women is a must, not an option. If we enable women to access finance, money skills and business opportunities, we know they are more likely to invest their takings into their family. We also know a more stable financial position for a woman means a more resilient family - better prepared for disaster and income loss and less likely to slip into poverty.

Breaking down barriers to financial inclusion for women is also imperative for economic growth in developing countries. In fact, the World Economic Forum has said if policy-makers prioritised investments in women’s economic power, the global economy could grow an additional $10 trillion by 2030.

To boost investment in women entrepreneurs, the first step is to see their value and potential. Women in our region are already running businesses - sometimes more than one - alongside managing household accounts, caring for children and in-laws and the family home. They are farming, managing staff, producing food and products, manufacturing and selling. Yet investment in women-led businesses remains low, even in the impact investment sector. 

Socially driven Impact investing is seeing a huge growth pattern, yet only 1% of impact investments go towards gender-focussed projects. Women and women-focussed products are still not taken as seriously, have to work a lot harder to access capital and prove the social impact of their business as well as the commercial viability. 

Good Return works to remove barriers to women in business by working with ethical lenders to deliver financial services to women. Our microloan program has boosted over 11,000 small businesses in the Asia-Pacific, and our Impact Investment Fund has provided $500m in loans to women-led Micro, Small and Medium Enterprises (MSMEs) which have been chosen as they employ other women and support women in their supply chains. To support this work, we also run financial capability training and large-scale media campaigns on financial skills to ensure women understand their financial rights and products. 

We recently met a loan recipient, Mrs Sam Eng who runs a fish farm and fish wholesale business in Cambodia. Despite being a business woman for 20 years, it is only through our loan program she has been given access to finance to act on her business growth plans. She now runs three fish growing ponds, employs four staff members and is expanding to selling ducks to diversify her income. Her daughter-in-law has been part of the process and knows now that, as a woman, she too can be in business in the future.

In Australia, we are a partner in a project running a business club for Indigenous women in the remote Kimberley region. Recognising the strength and skill of Indigenous women entrepreneurs should be part of every International Women’s Day celebration. These women are extraordinary in how they manage their lives and their commitment to family and community alongside their businesses - often in very remote locations. Investors need to see the opportunity in these powerful women leaders and what they can teach us all about the role of business in empowerment and community.

This International Women’s Day we call on you to share our vision and see the potential of women entrepreneurs in our region.