Gender, entrepreneurship and access to finance

© 2009 The World Bank Group, UNECE, All Rights reserved

United NationsEconomic Commission for Europe

Developing Gender Statistics

Women access to financial services is essential to allow them to benefit fully from economic opportunities.

What kind of resources?

Tangible: Land,

Financial Capital

Intangible: Human

Capital

Why it is important?

Universal Financial Inclusion:

Economical Growth Poverty Reduction Expanding business

Economic and Financial Resources

Gender equality and the empowerment of women

What is access to finance?

Access to finance is broadly defined as access to products (e.g. deposits and loans) and services (e.g. insurance and equity products) at a reasonable cost.

Access to what?

A. Financial Institutions Formal banks/near banks- foreign credit

union other formal- mutual or pension

fund

Informal money lenders,pawshops, NGOs non-intermediated- friends, family

B. Financial Services Transactions/payments Savings Credits Insurance Pensions

Legal access is not an issue in UNECE region:

Women's Access to land Women's Access to Property Other

than Land Women's access to bank loans

…butmore subtle forms of gender inequality

Who has access to finance and who does not?

Women's entrepreneurship general profile

ECONOMIC SECTOR: Service sector output

hard to quantify, no physical assets

SIZE:

Micro, small or medium

sized firms profit

Women in top management in UNECE region

% of Firms With Female Top Manager

0 5 10 15 20 25 30 35

Poland(2009)

Ukraine (2008)

Estonia (2009)

Belarus (2008)

Kazakhstan (2009)

Romania (2009)

Montenegro (2009)

Kyrgyz Republic(2009)

Moldova(2009)

Lithuania (2009)

Russian Federation (2009)

Hungary (2009)

Armenia (2009)

Turkey(2008)

Tajikistan (2008)

Uzbekistan (2008)

Azerbaijan (2009)

Source: "Enterprise Surveys, The World Bank Group“,

2008, 2009

Are women discriminated in credit markets?

Lower women access to formal finance compared to men

In the U.S. only 4.2 percent of $19 billion in venture capital went to women-owned businesses in 2003.

In the UK, a recent study shows that women enter businesses with about a third of the starting capital used by men (Carter and Shaw, 2006).

In ECA region, female-managed firms are 5.4% percent less likely to get a loan and are charged 0.6 percent higher interest rate than men (Muravyev et.al. 2007)

Why? Barriers for Financial Access and for Expanding Women's Businesses

DEMAND-SIDE BARRIERS Male signature for

opening an account and for credit

Borrowers Property Rights: Access to Collateral

Women lack access to networks which are largely male dominated

Less financial literacy

Domestic responsibilities

Limits on women mobility

SUPPLY-SIDE BARRIERS Financial institutions

lack technical know how to design products that suit the needs of women clients

The strong link between legal framework for secured transactions and secured registry

Government and financial sector policies-unintended effects

Small number of women in the board

Women Entrepreneurs and Firm Size

Source: "Enterprise Surveys, The World Bank Group“, 2008, 2009

% of Firms With Female Top Manager

0

5

10

15

20

25

30

35

40

Small Medium Large

Firm Size

Poland

Russian Federation

Azerbaijan

Microfinace Target mostly women Important role in women empowerment Number of women have increased over the

last decade

A tool for the discriminated groups

Is the welfare impact higher when more women are served?

Impact on children’s health, more salient in the case in of women borrowers in comparison with men borrowers.

Why women’s access to finance is important?

Wealth CreationWealth Creation

Contingency PlanningContingency Planning

CreditCreditAccessAccess

Savings & Investments based on household’s

level of financial literacy and risk

perception

Savings & Investments based on household’s

level of financial literacy and risk

perception

Consumption LoansConsumption Loans

Housing LoansHousing Loans

Emergency LoansEmergency Loans

Business livelihoodBusiness livelihood

Insurable Contingencies

Insurable Contingencies

Buffer SavingsBuffer Savings

Retirement SavingsRetirement Savings

Source: Raghuram Rajan Committee on Financial Sector Reform, India, 2008

Still…why women’s access to finance is important?

EQUALITY BETWEEN MEN AND WOMEN

ECONOMIC PROGRESS

Commercial Bank Partnerships with MFIs to increase access for women

Mainstreaming Gender in formal financial institutions

Specialized women’s banks

Integrated credit registries

Mentoring, training in non traditional businesses

Increase financial literacy and awareness

Have more female voices at the decision-making table

Sex disaggregated data

Increasing women’s access to finance

The value-added of statistics

Need for accurate, comparable and reliable

sex-disaggregated data

Why is data collection on access to finance difficult?

Supply side Regulators Financial institutions

Demand side

Data sources

Various data sources are available for measuring women's access to finance

(1) Gender and entrepreneurship: Enterprise Survey, The World Bank Group

Eastern Europe & Central Asia Central America South Asia East Asia & Pacific Middle East

& North Africa Latin America & Caribbean Sub-Saharan Africa

Over 100,000 firms in 125 countries

Main focus: emerging economies but also a few developed economies for comparative purposes

% OF FIRMS WITH FEMALE PARTICPATION IN OWNERSHIP% OF FIRMS WITH FEMALE TOP MANAGER …by FIRM SIZE … by SECTOR … by OWNERSHIP

Women's access to land Women's access to bank loans Women's access to property

other than land Mean age of marriage (women,

in years)

(2)The OECD Gender, Institutions and Development Data Base

(3)Africa Gender and Development Index (AGDI)

Ownership of urban plots/houses and land; Access to credit; Freedom to dispose of own income; Management

(4) Reserve Bank of India

A central bank’s initiative to track sex-disaggregated data

National level (Governments) improve the legislative frame monitor the impact of policies

support financial institutions

International community promote training for financial institutions create awareness of women's needs and of

the benefits of the lender collect sex-disaggregated data in their

field

UNCTAD gender dimension in all areas of work

reassess the capability of their programs to

combat gender inequalities

UN Recommendations for Gender Mainstreaming and Data Collection

Concept & Production:

United Nations Economic Commission for Europe – Statistical Division

Edited by:United Nations Economic Commission for Europe - Statistics DivisionSources:

Sushma Narain, “Gender and Access to Finance”, World Bank Report (working paper)

”World Survey on the Role of Women in Development”, Women's Control over Economic Resources and Acess to Financial Resources, including Microfinance, United Nations, New York, 2009

"Enterprise Surveys, The World Bank Group“, 2008, 2009

“The Gender, Institutions and Development Database” (GID-DB),OECD, 2009

Photo Credits:http://www.fotolia.com

© 2009 The World Bank Group, UNECE, All Rights reserved

United NationsEconomic Commission for Europe