Last year, the Asia-Pacific region recorded its worst economic performance in decades. With the pandemic far from over, the region’s recovery is slow, fragile and highly uneven both across and within countries. As the region struggles to recover, how can countries rebuild their economies and revive their development?
The answer can be found in the flea market of Suva, the Facebook commerce online stores of Bangladesh, and the digital learning centers across Viet Nam. In these and so many other spots across the Asia-Pacific region, it is clear that women entrepreneurs are a driving force of recovery and the mainspring of commerce and technology. While we have always known that women entrepreneurs play an essential role in supporting inclusive economic growth in the region, the pandemic has made it more evident than ever that countries ignore women’s role as job creators, employees and contributors to economic expansion at their peril.
Advancing women’s equality in the Asia-Pacific region could add as much as US$ 4.5 trillion – a 12 per cent increase – to the region’s GDP annually by 2025. With the economic slump that countries now face, none can afford to continue to miss out on this largely untapped dividend.
That is why ESCAP – in collaboration with the Government of Canada – initiated the Catalyzing Women’s Entrepreneurship (CWE) programme. The programme addresses three fundamental barriers that are hindering the growth of women-led businesses.
The first is lack of access to finance. The programme works to unlock private capital and use this capital to support women enterprises. This capital – whether as loans, equity, or blended finance – is used to provide targeted support to women entrepreneurs. It has created partnerships and used blended finance to support a range of gender-smart investment mechanisms, including a FinTech challenge fund, impact investment, and a women’s livelihood bond. To date, the programme has supported over 7,000 women to access formal financial services and has unlocked over US$50 million in private capital for women entrepreneurs.
The second barrier is policy. Existing policies and laws often do not recognize the specific issues women-led Micro, Small and Medium Enterprises (MSMEs) face.
The programme is working to influence national Small and Medium Enterprise (SME) policies and laws with Government partners in six countries. For example, in Cambodia, the programme worked with the Ministry of Industry Science Technology and Innovation to review the national SME policy and included special measures for women-led MSMEs.
COVID-19 has illustrated that businesses need to have greater resilience and the ability to ensure continuity through times of crisis. This is even more critical in places where other challenges like vulnerability to disasters and climate change have been in play. In Viet Nam, the past year has seen an extreme impact on agricultural farmers – a vast majority of them being women – because of the drought and saltwater intrusion. Based on consultations with female farmers and provincial officials in Ben Tre province – the largest agricultural bed of the country – the programme is developing a strategy to address the impact of climate change on female farmers in the Mekong Delta region.
The third barrier to growth in women-led businesses is skills. Women entrepreneurs need support to become equipped with digital and business skills to manage, sustain and grow their businesses.The CWE programme has assisted women entrepreneurs to use digital tools in their financial management and leveraging e-commerce to reach new clients and expand to new markets. In Cambodia, CWE is helping women entrepreneurs to use the Kotra Riel mobile app, which allows them to record income and expenses, and more importantly, to prepare financial records for their loan and financing applications.
All of these barriers have been in play in the aftermath of the pandemic. As a result, the impact on women and women entrepreneurs across the region has been disproportionate to their male counterparts. Women have continued to take the burden of unpaid care work and homeschooling. Sectors in which women employees work – such as the garment sector – have been hit harder than other industries, impacting women’s employment. Women entrepreneurs, who predominately make up the informal sector, face a range of financial and digital literacy constraints affecting business continuity.
Over the past year, we heard incredible stories of the resilience of the women entrepreneurs that our programme is supporting. We have seen women entrepreneurs repositioning their businesses and building back not only better but more agile, more capable and better prepared for shocks.
Take for example our partner iFarmer, in Bangladesh that quickly established new digitally enabled supply chains to keep women-led businesses running and providing food delivery Or the women enterprise recovery fund, in collaboration with our partners at UNCDF, that is co-financing fintech solutions that support women entrepreneur’s resilience and recovery.
But the scale of the challenge also requires a change in our response. In 2021 we will continue to scale up our work, leverage more capital, replicate and scale up our financing initiatives and share what we have learned. To increase the footprint of the programme, we are also leveraging regional partnerships, including with organizations like ASEAN.
Building back better means ensuring that women entrepreneurs not only survive this crisis but thrive coming out of it. This requires scaling up the resources directed to women-run businesses exponentially. Now that we have the model for success, we are looking for partners from across the private sector and development landscape to help us do just that. Because quite simply, the smartest investment for the SDGs is in the women of Asia and the Pacific.