Empowering female entrepreneurs is a no-brainer in the most important areas - employment generation and sustainable development; the evidence is that they are more responsible stewards, writes Thu Vân.

The sad, shocking sight of large amounts of dragonfruit being fed to cattle or left to rot on roadsides in many places smote her heart.

Lê Nguyện was also haunted by the fate of farmers in the southern province of Bình Thuận, a principal producer of dragon fruit in Việt Nam, as prices fell and they suffered huge losses in 2014 and 2015.

She thought about ways to redeem the situation and ensure it would not be repeated. She came up with the idea of establishing a co-operative to buy dragonfruit at a stable and reasonable price from local farmers, and to make wine with it as an added value product.

“I wanted to do this so that farmers wouldn’t have to sell their crops to traders at any price, or throw the fruit away, and of course I wanted to make a profitable product,” Nguyện said.

In November 2015, the Hàm Đức Co-operative was set up with 17 members, all farmers in Hàm Đức Commune, Hàm Thuận Bắc District. By the end of 2016, they had produced 60,000 litres of dragonfruit wine, and by the end of this year, the output is expected to almost triple at 170,000 litres. The co-operative now hires 22 workers, mostly local women.

A female entrepreneur’s initiative has helped stabilise farmers’ lives and generated employment for local women, facilitating genuinely sustainable growth.

At a time when the world economy is stagnating, and jobs and other forms of income generation have become hot topics, female entrepreneurship, particularly at the grassroots level, assumes greater importance.

At the APEC Women and the Economy Forum held late September in Huế City, a joint-statement called for members to support women’s access to capital and markets, skills development, leadership and application of innovation and technology.

 “We recognise women’s immense contribution to the achievement of sustainable, innovative and inclusive growth in the region and acknowledge the remarkable contribution of MSMEs to the GDP of every APEC economy,” the statement said.

It called on the private sector to champion an inclusive business agenda, giving women greater roles, “whether as workers, suppliers, distributors, customers or consumers.”

APEC leaders also encouraged the public and private sectors to collaborate on gender-responsive policies that improve access to resources and opportunities for women-led enterprises.”

Currently, in the 21 APEC economies, approximately 600 million women are in the labour force, and over 60 per cent of them are engaged in the formal sector, contributing up to US$89 billion annually to the bloc. Placing these figures in the context of APEC contributing more than 50 per cent of global real GDP growth only underlines the value and importance of boosting women’s access to growth opportunities.

A Goldman Sachs report has said that unlocking the potential of women by narrowing the gender gap could lead to a 14 per cent rise in per capita incomes by the year 2020 in several APEC economies, including China, Russia, Indonesia, the Philippines, Việt Nam, and Korea.

Therefore, it does not make socio-economic sense that women face more challenges than men in the business world.

Multiple barriers

In this year’s Global Talent Competitiveness Index, Việt Nam was placed 88th in terms of business opportunities for women.

Kamal Malhotra, Co-Chair of the Informal Ambassadors and Heads of Agencies Gender Policy Coordination Group and Resident Coordinator of the United Nations in Việt Nam, said there were multiple barriers to equal access, participation and progress in the labour market for women in Việt Nam.

“The Labour Code reflects the presumption that only women have responsibility for family and home care. This provides a rationale for excluding women from jobs that are considered unsuitable for them.

“The notion that a particular skill, job or industry is better suited to one sex leads to horizontal segregation of the labour market, often clustering women into the informal sector and lower paying jobs,” he said.

Many Vietnamese women have experienced this, including Lê Nguyện of the Hàm Đức Dragonfruit Co-operative.

Nguyện, who graduated as an engineer in 2004, first managed to open her own construction company in 2010. But she was not lucky enough to have the support of her husband, and a year later they divorced. Nguyện took care of their two kids.

“My husband didn’t want me to do business, just stay at home and take care of the housework,” she said.

“When our conflicts could not be solved, I chose my career,” she said.

But the choice came at a high price, she feels.

“I totally didn’t want it. I don’t want and don’t think any woman who wants to go out there and have her own business should have to sacrifice their families for that,” she said.

Hải Yến, director of Benew, a clothing company in Hà Nội, shared Nguyện’s feelings.

“Although I have a happy family, my husband does not really support the fact that I’m a businesswoman,” said Yến, whose company employs 20 people.

“So it’s pretty much just me when I have difficulties or trouble in my work, and sometimes, it’s very stressful when you can’t share this with your partner.”

Wide gap

A report titled “Towards Gender Equality in Việt Nam: Making Inclusive Growth Work for Women”, prepared by the United Nations Entity for Gender Equality and the Empowerment of Women (UN Women) and the Institute for Family and Gender Studies, Việt Nam Academy of Social Sciences, noted that while a number of job opportunities have opened up for female workers in export-oriented manufacturing sectors, women are less likely than men to receive training and be promoted.

The gender-earning gap has also widened. The report found that agriculture was still the main source of livelihood for a large portion of the population, particularly for women in the central-north and Central Highlands regions. Besides, a large percentage of women work without pay on their family farms. This leaves them vulnerable, with limited opportunities to earn more secure incomes and become more productive.

Women also spend disproportionately more time on unpaid domestic work in comparison with men. The burden of unpaid work limits women’s access to economic opportunities and capacity to engage in paid work, according to the report.

Credit discrimination

A recent report by the Mekong Business Initiative (MBI) showed that apart from gender-specific barriers, many challenges facing women-owned businesses are generic and also shared by male business owners. These include limited capital, inadequate market information and a shortage of skilled employees.

Nguyện said her dream is to open a factory that can produce dragon fruit juice, but she does not have the financial capacity to do so.

“It would cost a lot to set up such factory, and bank loans are very difficult to access for small businesses like mine,” she said.

“Although there’s no gender bias, banks would require conditions that new companies like the Hàm Đức Co-operative can’t meet. I understand that banks have their risks – so I don’t blame them but am trying to find my way round and saving up money gradually to expand my business.”

A study released in October by the International Finance Corporation, an affiliate of the World Bank Group, found that while Việt Nam’s investment climate for women is generally supportive, there was a large financing gap between women’s demand for capital and what they tend to receive.

According to the country’s 2014 GSO Enterprise Census, Việt Nam’s women own 95,906 or about 21 per cent of formal enterprises. Some 57 per cent of these are micro-enterprises; and 42 per cent are SMEs. Women-owned businesses are also similar in size to that of men, with similar average annual revenues, (the 2015 Enterprise Census showed average annual revenue of US$548,000 for small women-owned enterprises against $543,000 for men).

However, the study said that even when women entrepreneurs do qualify for a bank loan, they tend to receive less than what they ask for, and lower amounts than men. As it stands, the financing gap is estimated at $1.19 billion for women-owned SMEs.

“Most banks either see no need for a different approach to women entrepreneurs, or view the segment as less profitable,” said Đào Quang Hưng, deputy director of the Việt Nam Prosperity Bank’s SMEs Division.

“This is because of the misconceptions that women are less business savvy and require more support, and are therefore costlier customers to acquire and serve,” he said.

Kyle Kelhofer, IFC Country Manager for Vietnam, Cambodia and Lao PDR, said: “It is an opportune time for banks to recognise women-owned SMEs as a separate and strategic customer segment, with uniquely tailored products and services.”

Hưng of VPBank said that according to their data, the fact is that when women who own businesses take loans, they tend to be more serious about repayment than men and are more careful in running their businesses.

“Even in times of difficulties, women are better at managing situations,” Hưng said.

A viable strategy

VPBank was one of the first banks in Việt Nam to adopt a strategy specifically designed for women-owned businesses; and now, around 25 per cent of its SME clients having loan are women.

The bank expresses their ambition of increasing the women owned business in their portfolio significantly in coming years.

The bank is also facilitating free-access to non-financial services for women-owned SMEs, where female entrepreneurs can share experiences with each another and find new connections for their businesses.

“I found these activities very helpful as I get to network and learn from other enterprises. I think non-financial support like helping SMEs with financial management skills, customer care services, networking, and so on are very useful,” said Hải Yến, director of the Benew clothing company.

World Bank Country Director for Việt Nam, Ousmane Dione, spoke of the need to address specific constraints on access to finance for women, such as lack of collateral and necessary documentation.

Việt Nam has set the target of having 35 per cent of businesses owned by women in 2020. But in order to foster women’s participation in economic sectors, Việt Nam, as well as other APEC members, have much to do.

Given the urgent need for sustainable development, policy makers and other stakeholders, including banks, should be motivated by the fact that enabling women like Nguyện and Yến to do business will yield disproportionately higher returns. – VNS