Women power helps boost Việt Nam’s economy

March 08, 2019 - 06:00

Women are taking a larger part in Việt Nam’s economy and backing women entrepreneurs will help the country boost growth.

Hồ Thị Hải Ngân, owner of an electronics shop in Dong Nai Province, work with her employees to prepare products to ship to customers. — Photo courtesy of the shop — Photo courtesy of the shop
Viet Nam News

By Mai Hương

HÀ NỘI – As far as Việt Nam’s economy is concerned, sisters really are doing it for themselves.

More and more women are running businesses across the country.

There are around 145,000 small-and-medium-sized enterprises (SMEs) currently run by women in Việt Nam.

Such SMEs businesses play a crucial role for growth, contributing 30 per cent of GDP and more than half of job creation.

And a quarter of all SMEs nationally are run by women.

But it’s not just at the top where women are making a difference.

The World Economic Forum says Việt Nam is among the top 25 countries in the world closing the gender gap in the labour force.

Of all woman, 73 per cent are in gainful employment, just 10 per cent lower than their male counterparts.

By 2020, Việt Nam wants one million enterprises and of them they are targeting more than a third owned by women.

That means in the next two years, the amount of companies with a woman at the helm will have to increase threefold.

And that’s a challenge.

Last year was a big success for Việt Nam’s economy with GDP growth surpassing 7 per cent, but for the first time the number of enterprises going under topped 100,000.

Lack of capital

“My biggest obstacle is the lack of capital. I need cash to purchase merchandise and prevent risks,” Hồ Thị Hải Ngân, an owner of an electronics shop in Đồng Nai Province, told Việt Nam News.

The 34-year-old businesswoman took time to find her feet.

Her first two commercial ventures failed but it was a case of third time lucky for Ngân in 2016 when she and her husband opened the store.

She borrowed US$25,000 from VPBank with receivables pledged as security helping her explore new corporate clients.

The need for capital is common among SME owners, especially women, who sometimes face roadblocks related to the lack of collateral and have to face conscious and unconscious biases.

Men often have broader vision and better planning skills while women are risk-averse which, in many cases, make them see an opportunity slip away, Ngân said.

“Women cannot go out and drink a lot with clients like men, and in Việt Nam, it’s difficult to get clients without drinking,” she said.

“Asian women need time to get used to their role shifting from a housewife to a business owner.”

A market study by the International Finance Corporation (IFC) showed that 70 per cent of Women operated enterprises (WOEs) in developing countries are unserved or underserved by financial institutions. The financing gap is estimated at $1.19 billion for WOEs throughout Việt Nam.

“To continue its rapid growth, Việt Nam needs to support this sector to access credit and markets. Much more can be done to connect women SMEs to local and global value chains,” said Amy Luinstra, IFC Programme Manager and Gender Advisor, East Asia Pacific.

In the knowledge based economy, female entrepreneurs must also work harder to get capital, Luinstra said, noting that only 7 per cent of private equity and venture capital is invested in women-led companies in emerging markets.

“Women-owned enterprises are an important customer segment of VPBank,” a representative of VPBank told Việt Nam News.

“From an entrepreneur perspective, Vietnamese women are active, creative and enthusiastic. They participate in economic activities and are not inferior to men,” he said, citing examples that women are more willing to be housewives in the South Asia, Middle East and Africa.

VPBank in 2018 launched a loan package specifically designed for women-owned businesses and has disbursed 12,000 loans to WOEs so far. Besides, the bank has also built free access to non-financial services for women-led SMEs, enabling them to share experiences with each other and find new networking opportunities for their business.

More than 50 per cent of the bank’s women customers operate in distribution and service industries. "And we find that women are more sensitive than men in terms of service quality and when being satisfied, they are very attached," the bank’s representative said.

Need government support

Doing business in the time of integration and technological revolution is difficult and this is amplified by the inconsistent and changing legal framework, creating a big obstacle for businesses, according to Hà Thị Thu Thanh, vice president of the Hà Nội Association for Women Entrepreneurs.

In addition, the new era also requires women entrepreneurs to constantly make efforts, be proactive and creative and have strong mind to cope with challenges, Thanh said and added that they needed more support from the Government.

From a businesswomen perspective, Ngân hopes the Government and State agencies support women in explaining and clarifying policies and legal regulations related to their businesses, as well as enable them to participate more in the trade and investment promotion activities organised by the State agencies.

Her successful electronics business told her that, besides funding, the investment in business relationships and exchanges ideas will pave a way for success.

In the meeting with women entrepreneurs early this month ahead of the International Women Day (March 8), Prime Minister Nguyễn Xuân Phúc reiterated the Government’s support for women-led businesses. He also suggested female entrepreneurs continue learning and enhancing skills, contributing better to the country’s economic development. – VNS