“Women are the largest untapped reservoir of talent in the world.” – Hillary Clinton
In the recently held forum on “Mainstreaming Asean women in the trade of goods and services toward AEC 2025,” this writer felt very honored to be one of the chosen few men to grace the event and be given the opportunity to share my views on the contributions of women to the micro, small and medium enterprises sector.
Administrations led by more competent women owners or managers have generally resulted in higher returns on investment, sales and equity. Three of those Asean Women Entrepreneurs who provide inspiration and were cited in the forum are: Malaysian Hooi Ling Tan, co–founder of Grab, which is now valued at $3 billion; Indonesian Nabilah Alsagoff, founder of Doku, an online payments firm in Indonesia; and our very own Reese Fernandez-Ruiz, co-founder of Rags2Riches, a social enterprise that helps women to directly access consumers and retailers with their unique “upcycled” products.
However, there are still barriers to the economic participation of women. Some of these are, the capacity to take full advantage of socioeconomic opportunities and limited access to resources, such as technology, finance, factors of production, information, and government support. Women have to confront the issue of control over resources, including the freedom to make decisions and accountability. One of the top exit reasons from an entrepreneurial venture by women is personal in nature, specifically pertaining to balancing work and family life, defying social expectations and coping with the fear of failure. It cannot be denied that, indeed, gender is a factor.
Based on a study by the International Labor Organization, the global female labor participation rate has dropped to 49.6 percent from 52.4 percent, between 1995 and 2015. The gender gap has declined only marginally.
Globally, 37 percent of business establishments are owned by women, based on IFC’s Banking on Women 2013. That means 224 million women contribute to the global economy. Of the 224 million, 126 million are in business, a result of women’s reinvestment of 90 cents of every additional dollar of their income in “human resources.” In the US and Europe, women are recognized for their higher level of innovation, and an analysis of 350 microfinance institutions across 70 countries indicated that lending to women have lower write-offs and lower portfolio-at-risk. In the Asean Regional Entrepreneurship Report of 2015-2016, it is mentioned that of the total population of 627 million, 61.3 million or 9.8 percent are women entrepreneurs.
The forum opened my eyes to various initiatives in the Asean perspective. Brunei has its action plan for women; Cambodia, a five-year strategic plan for gender equality and women’s empowerment 2014-2018; Indonesia, a roadmap to accelerate achievement of the MDGs; in Lao PDR, there is a national strategy for the advancement of women 2006-2010; Malaysia has a national policy on women; Myanmar, a national strategy action plan for the advancement of women 2013-2022; Thailand, the national development plan for women 2012-2016; and Vietnam, a national strategy on gender equality for 2011-2020.
In the Philippines, we have R.A. 9710, or the Magna Carta of Women Act of 2009, which paves the way for equal access to credit and capital, as well as employment opportunities. We also have R.A. 7192, or the Women in Development and Nation Building Act, which states that in all contractual situations where married men have the capacity to act, married women shall have equal rights. As a matter of fact, in 2015 and 2016, the World Economic Forum’s global gender gap report ranked the Philippines as the only Asian country to beat other economically advanced countries, by closing 78 percent of its total gender gap. In all government agencies, there is a Gender Awareness and Development (GAD) budget that requires 5 percent of their budget to go to gender-related activities and for 30 percent of official development assistance and soft loans to be spent for GAD projects.
As I have previously shared, the Development Bank of the Philippines has adopted a strategy of investing with a gender lens through its pioneering Inclusive Lending for Aspiring Women Program (ILAW). The ILAW initiative has fostered growth and diversification of women enterprises and entrepreneurs. This is initially through an increased access to finance via program participation and, subsequently, an improved market and supply-chain linkages with the assistance of and access to a network of top women business leaders and experts.
ILAW initially started from our observation that in the micro enterprise sphere, more than 90 percent of proponents are women or “nanays.” However, we observed that the graduation from the micro to the small enterprise category needed some push. Luckily, we found inspiration from the leadership of the Women’s Business Council, specifically Ma. Aurora “Boots” Garcia and Pacita “Chit” Juan. In the true development by partnership mode, we conceived and put into motion the seeds for the ILAW program.
To back up its social impact claim, the ILAW Program targets a sub-sector generally perceived to be “risky” and “pre-bankable,” enterprises that are women-owned, managed, and/or controlled. Using a gender lens for financing, we aimed to help remove barriers facing small women entrepreneurs in the Philippines. This likewise demonstrates DBP’s concrete support to women empowerment and gender equality. Today, ILAW has supported 101 proponents, with P713 million worth of loan approvals all over the country.
We join hands with AWEN (Asean Women Entrepreneurs’ Network) in empowering the passion in every woman across the world to open more opportunities for them, in helping them fix the challenges they face while doing business, and in making them globally competitive and successful. As DBP is now under the leadership of a seasoned woman banker, President and CEO Cecile Borromeo, we expect the ILAW program to receive further boost and refinements so it may be more responsive to the needs of women-led businesses.
(Benel D. Lagua is executive vice president at the Development Bank of the Philippines. He is an active FINEX member and a long-time advocate of risk-based lending for SMEs. The views expressed herein are his own and do not necessarily reflect the opinion of his office, as well as FINEX.)