Access to Trade and Growth of Women’s SMEs in APEC Developing Economies

KATE BOLLINGERWEP WORKSHOP 2014UBUD, BALI

Indonesia ∙ Malaysia ∙ Philippines ∙ Thailand

Presentation Outline Research Purpose and Partnership Overview and Methodology Findings Recommendations

Purpose and Partnership with APEC

It is increasingly recognized that women’s full and equal participation in business has important repercussions for domestic and regional economies.

Asia-Pacific Economic Cooperation (APEC) commissioned a research study to increase understanding of the factors that encourage or deter access to trade and growth for women’s SMEs in:

◦ Malaysia◦ The Philippines ◦ Thailand

TAF extended the research to Indonesia

Research Overview Research examined a range of micro-economic factors that affect women’s ability to start and grow SMEs in the study economies:

◦ Economic and Financial Barriers

◦ Government and Policy Barriers

◦ Social Environment, Support Systems and Opportunities for Women

Research Methodology Quantitative research

Survey questionnaire

Malaysia• 92 SMEs• 55 exporting SMEs• ~50% female, ~50% male• Area-based quota sampling

Thailand• 80 SMEs• 56 exporting SMEs• ~50% female, ~50% male• Stratified random sampling

Philippines• 100 SMEs• 50 exporting SMEs• ~50% female, ~50%

male• Area-based quota

sampling & simple random sampling

Qualitative researchAll Study Economies

• Semi-structured interviews• Focus group discussions • Case studies of female entrepreneurs

Indonesia• 108 SMEs• 42 exporting SMEs• ~50% female, ~50%

male• Area-based quota

sampling & simple random sampling

Finance & Loans Complexity of the loan application process is a key problem for womenowned SMEs across all countries surveyed.

12%

41%

3.5%

13%

8.1%

2.3%

7%

14% 8.1%

38%

3.5%

21%

5.8%

1.2%3.5%

19%

Male Owner Female Owner

Learning about types of loans High interest rates

Finding a lender Completing application paperwork

Developing a business plan Getting Collateral

Waiting time for approval Other

Most Challenging Part of The Loan Process: Malaysia, the Philippines and Thailand

Employee Hiring and Training Among women and men business owners employee hiring and training was cited as their primary business challenge.

26%

37%

7%

10%

3%

9%

8%21%

40%

7%

11%

2%

13%

7%

Male Owner Female Owner

Physical space Hiring and trainingBusiness licensing Access to capitalAccess to technology/assets Relationships with clientsOther

Primary Business Challenge: All SMEs

Employee Hiring and Training Women owners hire more women than men owners.

Average Firm Size by Frequency of Interactions with Formal Networks

020

4060

Per

cent

age

of F

emal

e E

mpl

oyee

s

Philippines Malaysia Thailand Indonesia

NetworksNetworks are recognized as important to success in business, but women-owned firms lag in formal networking.

Frequency of Interaction with Formal Business Associations: All SMEs

TechnologyWomen firm owners lag behind men in their knowledge and use of technology

Awareness of Technologies that Would Make Business More Profitable

0.2

.4.6

.81

Mea

n of

Aw

aren

ess

Philippines Malaysia Thailand Indonesia

Male O

wner

Female

Owne

r

Male O

wner

Female

Owne

r

Male O

wner

Female

Owne

r

Male O

wner

Female

Owne

r

Are you aware of Technologies that would make your Business more Profitable?

Corruption Informal payments are a problem for all business owners, especially in the Philippines.

0 20 40 60 80 100percent

Thailand

Malaysia

Philippines

Severe Problem Moderate ProblemMinor Problem No Problem

Perceptions of Severity of Informal Payments Problem: By APEC Economy

Government Support Women business owners in Malaysia and Thailand perceived low levels of government support.

0 20 40 60 80 100percent

Female Owner

Male Owner

Very Supportive Somewhat SupportiveIndifferent Unsupportive/Hostile

How Supportive is Government of Businesses Like Yours?: All SMEs Malaysia

Social Support: Role Models & Mentors

75% of all business owners in the study had a relative who ran their own business. Women owners are much more likely than men to have a female relative in business.

64%

36%

78%

22%

Male Owner Female Owner

Yes No

Do You Have a Female Relative in Business?

Key Recommendations Finance and Loans: Work with the private sector, including SME business associations and networks, to support potential women entrepreneurs on financial literacy and the loan application process.

Networks: Support the capacity of business associations to reach women-owned firms and create programs to address their needs.

Technology: Develop training programs to help women business owners more effectively use technology appropriate for their particular business.

Key Recommendations Government Support: Build opportunities for more constructive interaction between business women and the public sector through activities such as public-private dialogues and trade fairs.

Social Support: Mentorship programs can pair women with role models to help that start their own business and navigate social constraints.

Both studies are available online

Areas of Research Focus◦ Economic and Financial Barriers

◦ Access to finance: interest rates, loan applications, collateral requirements◦ Operational: employee hiring and training, turnover, business technologies◦ Networks: business associations, informal networks

◦ Government and Policy Barriers ◦ Perceptions of government◦ Access to business information from government◦ Government services◦ Corruption/informal payments◦ Crime and safety

◦ Social Support Barriers ◦ Domestic responsibilities◦ Role models: relatives in business, mentors