Women constitute a large group in Vietnam in

terms of business start-up and ownership.

Encouraging more women to become involved in

enterprise and grow existing businesses will impact

positively on Vietnam's economic performance.

We invite to listen to women entrepreneurs from

different parts of Vietnam as they share their

experiences in doing business. As in other

developing countries, women face a number of

challenges, not only due to the strong influence of

historical and cultural values but also because of

discriminatory barriers in the business

environment. However, despite these obstacles,

they have been struggling to develop their

companies, in many cases with creativity and

effectiveness. They have different definitions of

success, varying goals, and unique life experiences

that influence their work and their business. Their

frank and insightful confidences may help inspire

other women across the country to put their

cherished business ideas into practice, provide all

those involved in supporting, financing and

developing businesses, including the government,

with more information about the specific needs of

women entrepreneurs, and serve as suggestions

for concrete actions that can boost women's

enterprise.

Ms. Trang NguyenManager, Business EnablingEnvironment ProgramMekong Private SectorDevelopment FacilityInternational Finance Corporation

TABLE OF CONTENTS

ACKNOWLEDGEMENTS 3

INTRODUCTION 5

LAWS AND REGULATIONS - THE BUSINESS ENVIRONMENT 9

MONEY MATTERS - ACCESS TO FINANCE 15

SETTING UP SHOP - PROPERTY AND INFRASTRUCTURE 23

MAKING CONNECTIONS - BUSINESS CULTURE AND NETWORKING 29

DAY-TO-DAY MANAGEMENT - RUNNING A BUSINESS 37

BUSINESS AND FAMILY - WORK-LIFE BALANCE 47

FINAL THOUGHTS 51

NOTES 52

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This publication is a joint product of the International Finance Corporation's (IFC) MekongPrivate Sector Development Facility (MPDF) and Gender Entrepreneurship Markets (GEM)initiative. We are grateful to the Australian Agency for International Development (AusAID) forits financial support.

We wish to thank the Vietnam Women's Union, the Hanoi Young Entrepreneurs' Association, theHo Chi Minh City Women Entrepreneurs' Club, the Young Business Association of Ho Chi MinhCity, the Can Tho Business Association, and the Da Nang Women Entrepreneurs Club. Withouttheir logistical support in arranging interviews and focus group discussions among their members,this publication would not have been possible.

The team responsible for developing this publication includes the following individuals: HuongThien Nguyen (MPDF) was responsible for the overall management of the project, under theguidance and technical oversight of Trang Nguyen (MPDF) and Amanda Ellis (GEM). RashmiPendse (MPDF), Froniga Greig (consultant) and Thi Trinh Nguyen (consultant) drafted thedocument; Froniga; Thi and Huong coordinated the data gathering and field research.Photographs were taken by James Maxtone-Graham. Julie Weeks (consultant and CEO ofWomenable, Inc.) and Jozefina Cutura (GEM) provided feedback on both research tools anddrafts of the report. Dung Tuan Hoang (MPDF) also provided feedback on the content, layout anddesign. My Thi Nguyen (MPDF) provided logistical support.

Most importantly, we wish to express our sincere thanks to the women entrepreneurs across thecountry who gave their time to share their views and thoughts for this publication.

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ACKNOWLEDGEMENTSACKNOWLEDGEMENTS

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INTRODUCTIONINTRODUCTION

Women play a crucial part in reducing povertyand advancing human development. Througha variety of roles - family caregivers,agricultural producers and wage earners -women have a positive impact that not onlysustains their households but also benefitstheir overall societies. In recent years, therehas been greater awareness of yet anotherway through which women power economicgrowth - entrepreneurship.

Throughout the world, the number andinfluence of women-owned and women-managed enterprises is increasing. This isdue to a number of factors, including betterrecognition and protection of women'spolitical and economic rights (such asequality, education, and access toresources), the growing role of the privatesector in many economies, and theglobalization of trade, which has increasedmarket opportunities for businesses.

Businesses run by women - ranging fromlarge companies to small, family-sizedenterprises - contribute to their communities in

many ways.1 They not only increase theproduction of goods and services but alsocreate jobs, in many cases for other women.The extra income of women business ownersand workers boosts family incomes, instillspersonal confidence and fosters a sense ofempowerment. Over time, this leads togreater recognition and respect for women'sabilities and contributions, which, in turn, canchange broader attitudes and perceptions intheir societies and ultimately shape a moreequal environment for women and men alike.

In Vietnam, there are several reasons to beoptimistic about women's entrepreneurship.The country's impressive track record ongender equality, its strong commitment to botheconomic growth and poverty environment forwomen's business activity.2 Current estimatesof the percentage of female-owned businessesrange from 22 percent to 35 percent.3 As longas these positive trends continue, there is noreason to doubt that women in Vietnam willincreasingly have greater opportunities not onlyto share in but also to create prosperity.

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However, much remains to be done toensure that women-owned businessescontinue to thrive. Recently, the IFCsurveyed 473 women entrepreneurs inVietnam and conducted in-depth interviewswith over 80 of them to learn more aboutthe challenges they confront and seek theirrecommendations on possible policyremedies.4 The results yielded severaluseful inputs for reform; in particular,businesswomen expressed a clear need forentrepreneurial and women-only training,improved access to finance, and an officialchannel or "home" through which theycould relay their particular businessconcerns to policymakers.

Voices of Women Entrepreneurs in Vietnamhighlights some of these conversations withsuccessful businesswomen. As they revealin the following pages, women entrepreneursstill face many obstacles on a variety oflevels. In "Laws and Regulations - theBusiness Environment," they begin bydiscussing the problems posed by anevolving and inconsistent legal context.Next, in "Money Matters - Access toFinance" are their thoughts on theoverwhelmingly common concerns of findingcapital and managing finances. Followingthis, in "Setting up Shop - Property andInfrastructure," the women explain how alack of access to land and to adequate

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facilities and services limits their businesses.In "Making Connections - Business Cultureand Networking," they describe how the waythat business is done in Vietnam can impedetheir efforts. They also highlight a clearneed for networking and associations. Next,in "Day-to-Day Management - Running aBusiness," the conversations turn to theproblems women business ownersencounter in expanding their markets andfinding and retaining qualified staff. Finally,in "Business and Family - Work-LifeBalance," the women candidly reflect on theirconflicting responsibilities at work and at home.

Despite the difficulties confronting them,Vietnamese women entrepreneursdemonstrate an extraordinary ability tosurvive, adapt and prosper. Theirdiscussions go beyond describingproblems to reveal a number of creativeand effective coping strategies and tactics.It is our hope that by amplifying theirvoices, this publication will not only helpexpand opportunities for existingbusinesswomen in Vietnam but also inspirefuture generations to follow their ownvisions for economic development.

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LAWS AND REGULATIONS

THE BUSINESS ENVIRONMENT

In recent years there has been increasingrecognition that a country's legal and policyenvironment is a key factor in its achievingsustainable business and job growth. InVietnam, the government has demonstrated astrong commitment to transforming theeconomy from centrally planned to market-oriented. Since launching the economicreforms known as doi moi ("renovation") in1986, the country has experiencedremarkable growth, driven largely by theprivate sector.5 During the Tenth CommunistParty Congress this spring, the politicalleadership reaffirmed its commitment tofurther integrating Vietnam into the globaleconomy and to continuing with relatedreforms, such as the Common InvestmentLaw, which facilitates business investments.The government is also firmly centered onfulfilling the United Nations' MillenniumDevelopment Goals, which include povertyeradication, gender equality and women'sempowerment, by the year 2015.

However, despite its progress and futureambitions, Vietnam still has a long way to goin terms of improving business conditions for

private firms in general and for women-ownedenterprises in particular. In the World Bank'sannual Doing Business report, whichcompares the business enabling environmentacross countries, Vietnam ranked 99 out of155.6 Most enterprises, whether male- orfemale-owned, report difficulties when itcomes to understanding and followingcomplex regulations, dealing with governmentofficials, and providing insights regardingpotential policy changes. Businesswomen inVietnam also believe that the absence of apolicy dialogue mechanism through whichthey can address their chief concerns, suchas access to capital and land, imposesadditional limitations on their success.

LEGAL ISSUES

As is the case for most entrepreneurs inVietnam, whether male or female, legal issuespose a significant concern for womenbusiness owners. Many female entrepreneurssimply do not have the time or resources tounderstand the full impact of regulationsrelating to their businesses. Different laws

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specify a variety of complex requirements,inadvertently creating a great administrativeburden for businesswomen. In practice, theimplementation of laws varies according to thelevel of government (national, provincial, orlocal); to complicate matters further, actualprocedures often diverge from those requiredby rules on the books. As one businesswoman comments,

"Enterprises find the implementation of policiesand laws frustrating, unclear and too dependenton the discretion of government officials."

In a fairly constant legal environment, suchinconsistencies would be problematic enough,but given Vietnam's ambitious pace of reform,they can be downright confusing.Entrepreneurs often find it difficult to getaccurate and timely information on proposedchanges affecting businesses:

"Laws and policies in Vietnam change so fast...sothere's no choice but to work hard and try mybest to stay on top of them."

Even when such details are available, official"commitments" tend to differ from what isultimately decided. For example, while thegovernment officially insists that private sector

growth is important for the country, manyregulations and practices still tend to favorstate-owned companies.

"Although the government has opened theprinting industry to private companies,preference is still given to state-ownedenterprises. For example, only state-ownedcompanies can publish materials about religion."

Some laws, originally meant to be beneficial,actually prevent enterprises from operatingefficiently. For example, although the laborcode in Vietnam recognizes the specialcircumstances of working mothers, it effectivelyraises businesses' cost of hiring them:

"At present, there are very few special policiesto support enterprises that employ a lot ofwomen. Government policy is that femaleworkers have four months of maternity leave,and one extra hour per day off during thechild's first year. For enterprises that employmainly women, this means having to deal witha labor shortage throughout the year."

Many women entrepreneurs are eager toemploy other women, but existing governmentincentives in this area, such as tax benefits,require measures that lie beyond the capacityof small companies:

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"There is a policy that says enterprises employingmany female workers are eligible for a taxreduction, but such businesses have to meet tenspecific conditions, including one that requires theenterprise to have childcare facilities."

As a result, both the actual and perceivedcosts associated with hiring females make itmore profitable to hire men.

TAXESHigh regulatory costs on and constraints todoing business are other common problems forentrepreneurs. Several women complainedabout illogical tax laws and collectionpractices:

"Our [income] taxes increase every year. Thetax authorities don't care whether we'veactually had profits, or what our expenditureswere throughout the year. They also don'tcare that even though we may have highrevenues, our profits may not be very high.They just fix an amount each year and makeus pay that in taxes."

Businesswomen involved in international tradealso face other charges besides income tax:

"We are required to pay the VAT [value addedtax] immediately when importing goods; but it isonly after we sell the products that we can get the VAT refund. This is difficult for enterprisesthat lack capital because even if they haven'tsold the goods yet, they have to pay the VAT in advance. This can have a huge impact onthe cash flow of small enterprises."

Another common concern is that officialsapply tax regulations in an inconsistentmanner, thereby creating a breeding ground for "unofficial payments." Bribes arepractically a standard for doing business inVietnam, so much so, in fact, that businesswomen view them as facilitation fees

that reduce document processing timesrather than as an element of corruption. Onewoman put it matter-of-factly:

"We had a difficult time trying to get our taxrefund because we didn't pay enough of abribe. We gave them some money, but theywanted more. And if we don't pay that, theywill just make our lives difficult."

INTELLECTUAL PROPERTY RIGHTS

Beyond taxes, another problem that limits thegrowth and innovation of many women-ownedenterprises, particularly design, craft or othercreative businesses, is Vietnam's inadequateenforcement of intellectual property rights:

"My company has registered for intellectualproperty rights protection, but frankly, even ifthere are violations, there is nothing we can

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do. For example, in 1995, I won the thirdprize in a national contest for my designof a wooden toy. But when I went to anexhibition, I found that a state-ownedcompany also in the education industryhad exactly the same design as mine. Icouldn't do anything because mycompany was small and private,competing against a large SOE."

CONTRACTENFORCEMENTContract enforcement in Vietnam is stillrather weak, especially since laws andpolicies are applied inconsistentlythroughout different levels ofgovernment and/or regions. Whendisputes arise, women business ownerstend to find that resolution throughcourts or arbitration is quite prohibitivein terms of time and costs:

"Going to a commercial arbitrator is nodifferent than going to court. Court feesand arbitration fees are both very high.And because the processes are so time-consuming and have an impact on thebusiness, enterprises don't have time topursue them."

Consequently, many womenentrepreneurs often just prefer to cuttheir losses and proceed with businessas usual.

RECOMMENDATIONSBusinesswomen suggested several ways in whichthe government can improve the legal environmentfor enterprises. Harmonizing laws and proceduresis crucial:

"We have to do business according to the law. So it isimportant to have a clear, reliable legal system that canbe followed."

Also, women entrepreneurs suggested thatinformation related to laws, policies and potentialchanges should be more readily available, throughchannels such as business associations,newspapers, the internet and other public media. AsTran Thi Lan Huong states:

"I just want to do business in an environment wherethe competition is fair and healthy. Entrepreneursneed to have better access to information. Wegenerally don't have easy access to informationabout laws and policies, and the relevant authoritiesusually aren't forthcoming when enterprises want tofind out this type of information."

Women business owners regard government effortsthat specifically encourage private sectordevelopment as crucial. The draft SMEDevelopment Plan for 2006-2010 tasks the Ministryof Planning and Investment (MPI), Ministry ofJustice (MOJ), and Ministry of Finance (MOF) withreducing costs, streamlining regulations andreforming tax policies for small and medium-sizedenterprises. Such measures may particularlyencourage women entrepreneurs, many of whomhave informal businesses, to register theiroperations formally and thus have easier access tocapital.

Ultimately, businesswomen in Vietnam would like tohave a more permanent "home" that allows them toadvocate their regulatory and policy concerns togovernment officials. Governments in othercountries have implemented high-level advisoryboards, special task forces and public-privatedialogue mechanisms for women's business issues.In Vietnam, where the government already consultsthe private sector when forming strategic andeconomic development plans and where themachinery for gender equity is rather well-established, such approaches may prove effectivein boosting women's enterprise development.

NAVIGATING THROUGH UNCERTAINTYSTAY INFORMED ABOUTGOVERNMENT POLICIES

During my 20 years as an employee of the DaNang General Hospital, I encountered patientswho had to wait for months before they couldhave operations. In 1989, an idea popped upinto my head - I would open a private practicethat could serve patients faster. Initially, wehad more patients than we could serve. Inorder to increase our capacity, we had to turnour health care center into a major hospitalwhere operations could be carried out legally.

At that time, government policies relating tothe health care sector were ambiguous,especially the regulations that defined whatthe private sector could do. The Ministryofficials were nervous because nobody hadopened a private hospital before. It took meone and a half years to get permission fromthe Ministry of Health for my hospital.

Because the legal framework was undefined,other people were afraid of investing in thehealth care sector. At the beginning, only afew people supported my idea. People said aprivate hospital wouldn't be as respected as apublic one. They advised me not to leave myimportant position at the state hospital.

During the initial years, I ran my businesswithout any clear idea of government policy.The government did not consult businessesabout potential changes in laws andregulations. However, during the last fewyears, I have gone to Hanoi many times todiscuss regulations affecting private hospitalswith the government. Now I feel that thegovernment respects the private sector morethan before; it takes the effort to clarify thepolicy environment and make it more favorablefor business. Now businesspeople are actuallyinvited to official meetings.

VU THI TU HANG, 54, is the director of Binh

Dan Hospital in Da Nang. In 1996, Hang opened

the first private hospital in Vietnam. Despite the

initial lack of a clear legal framework for

business, Hang has managed to establish a

successful venture. Today, the hospital has

annual revenues of VND7 billion (US$450,000).

Early this year, Hang opened a second hospital,

also in Da Nang, that was expected to earn a

revenue of VND30 billion (almost US$2 million) in

its first year of operation.

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MONEY MATTERS ACCESS TO FINANCE

Throughout the developing world, access tofinance, which refers not only to theavailability of funds but also to knowing how tomanage money, is probably the biggestchallenge facing enterprises.7 In manycountries, entrepreneurs find it difficult toobtain financing for any number of reasons,including poverty, a lack of acceptablecollateral, a poor understanding of bankrequirements, improper financialmanagement, and banks' rigid perceptions ofrisk. Without adequate funds, businessescannot operate effectively, invest in innovationand capacity improvements, nor, ultimately,expand. Even if they can obtain capital,owners of small and medium-sizedenterprises (SMEs), in particular, may lack thefinancial management and accounting skills tomake the best use of available funds.

For women entrepreneurs in Vietnam, ascompared to their male counterparts, accessto finance is a particular challenge. Men tendto borrow more from government banks,whereas women are more likely to tap intoinformal sources that offer relatively smaller

loan amounts at higher rates of interest.8

Because businesswomen have relatively lessskills, time, resources, and credit, theirenterprises tend to be undercapitalized,employ fewer people, and less profitable thanthose run by men.9

BANK LOANSIn Vietnam, women business owners accesscapital from both formal and informal sources.The most common formal source of capital isbank loans, but this is generally only possiblefor established enterprises with significantassets:

"When you are just starting business, nobodytrusts you. You can't do anything without capital.If you don't have assets or a credit history, thennobody will lend to you."

Some women indicated that they haveborrowed from state-owned financialinstitutions. However, even if entrepreneurscan demonstrate sufficient collateral, formallenders are extremely conservative:

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"It is very difficult to borrow money from banks.You need to have assets like land or real estateas collateral. And in many cases, the bank'svaluation of your assets is much lower thantheir market value. As a result, the amount youare actually able to borrow from a bank is muchlower than what you need."

Often female entrepreneurs find providingevidence of collateral problematic, and manyhave been refused bank loans for thisreason. The most obvious form of collateral -land - is difficult to leverage without a LandUse Certificate that proves one's title to apiece of land:

"Although I have both land and houses, I don'thave all of the paperwork that provesownership. So I can't mortgage any of myassets for a bank loan."

Even those businesswomen who can tap into

bank funding say that getting a loan is a complex

process that involves confusing paperwork:

"It is very difficult for me to get a loan from abank because I don't know the proceduresvery well. Often having collateral doesn'tguarantee that you can get a loan from abank. The banks will also want to evaluateyour business plan and assess the investmentproject's feasibility and potential for success."

Women also perceive Vietnamese state-owned banks as inflexible and lacking incustomer orientation, especially when itcomes to SMEs and their needs:

"A customer once transferred a payment ofhundreds of billions of Vietnamese dong tome through the bank. But because there wasa minor difference between the name cited onthe transaction and the name on thecustomer's money order, the bank held themoney... what's worse, the bank didn't eveninform me of the situation! I found out about itfrom my client. Not being able to access thatlarge sum of money for such a long timecaused major problems for my company.Banks just don't have very good customerservice attitudes."

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Other common complaints about banksinclude insufficient credit limits, overly highinterest rates, and short loan terms. Somewomen indicated that it is easier for them toobtain better deals from non-state banks(private and foreign commercial banks),perhaps because such institutions are morecustomer-oriented and have a more flexibleview of the potential risks and returnsassociated with the enterprise market.

"In the last five years, the market economyhas allowed for the establishment of manymore private banks. This has been great for

private enterprises. It is easier to borrowfrom private banks, especially if you knowsomeone at the bank and are willing toaccept slightly higher interest rates. Theywill even help with preparing the necessarydocuments. Of course, it isn't easy forearly-stage companies to borrow large sums of money at one time. In the case of my company, in addition tomobilizing capital from my relatives, I havean established relationship with five othercompanies that allows me to raise fundsfrom them."

Truong Lan Anh, 52, is the head ofThuan Phat, a food-processing cooperativein Ho Chi Minh City that has beenoperating since 1982. Thuan Phat has 12contributing members and 130 employees.Anh's family holds an 85 percent share ofthe cooperative's capital, which isapproximately VND10 billion(US$650,000).

When Anh built her factory in an industrialpark outside of Ho Chi Minh City five yearsago, she received a loan from a city-runinvestment fund to cover 80 percent of herinvestment. However, the rate was "toohigh" and the loan term was "too short,"with only five years for repayment.

"For small enterprises like ours, banks aremore like pawn shops. We have to givethem our things, and they will give us avery short-term loan. So we can't use themoney to make a long-term investment.Because we lack capital, the investmentswe've made in equipment and technologyhave been sporadic."

Thuan Phat produces food products forboth the domestic and export markets, andrealizes revenues of about VND18 billion (US$1.2 million) a year. Since 1997, ThuanPhat has been exporting products toRussia, Hong Kong, Australia, and theUSA. However, a lack of capital is currentlypreventing the cooperative from expandingits domestic and international markets.

"The market has accepted my company'sproducts, but in order to expand nationwide,we will need to support a network ofdistributors financially. And to be able toexport to Europe, we will need to invest intechnology so that we can meet their foodsafety standards. We are planning to do allof this, but it will require a lot of capital."

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INFORMAL FINANCINGWhen formal sources of capital are eitherinsufficient or simply unavailable, womenentrepreneurs resort to a variety ofalternative financing strategies. Almost all,but particularly owners of newer and smallerenterprises, obtain financing from informalalternatives, such as family, friends,employees and other businesses. Loansfrom family and friends are considered mostreliable. While in some instances familymembers take on the additional roles ofinitial investors or business partners, theygenerally limit their involvement to loans:

"My company usually mobilizes capital byborrowing from family or friends. I pay theminterest on the loans, generally at a rateslightly higher than the bank's rate."

When the capital borrowed from family and

friends has been exhausted, women

sometimes approach “loan sharks” or

pawnbrokers, including jewelry stores.

Because these moneylenders are willing to

provide money in cases of emergency, the

interest rates that they charge are quite high.

"I mainly mobilize capital from family andfriends. It's hard to borrow money from othersources. Even if you borrow from the blackmarket, the interest rate is ten percent, and it'snot easy to get. But sometimes when I needmoney urgently, I end up having to borrow fromthe black market."

FUNDING STRATEGIESSome women have established their ownrevolving capital funds with friends or otherbusiness colleagues – an interestingarrangement because it also allows fornetworking opportunities:

"We have a network of women entrepreneursthat allows us to help each other out withcapital. We get together one Saturday amonth, and everyone contributes money into apot. Then we draw a name, and the personwhose name is drawn gets to borrow themoney. There is no interest on that loan, anda small amount is used to buy food for theget-together. Actually, the main purpose ofthese gatherings is for us to share experiencesin doing business and to advise each other."

Others have raised share capital for theirbusiness by inviting staff to invest, a tacticthat also reduces the risk of employeeattrition in an increasingly competitivemarket for skilled labor:

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"I mobilize capital from my employees byallowing them to buy shares in the company.When they have shares, they have a sense ofownership and are more conscientious anddedicated. And when they receive dividendson those shares, they are even more willingto contribute more money to buyingshares...by earning more money, theemployees are more committed to thecompany and are less likely to considerleaving."

MANAGING MONEY

In addition to the challenges of findingsufficient capital, another common problembusinesswomen cite is that of maintainingcash flow. Several women entrepreneurscomplain about the practice known as “chiem dung”, which translates into "moneyused by others." This is particularly commonin industries like construction, where thenature of the business cycle usually resultsin business owners receiving payments forgoods or services well after the time of sale

or delivery. This payment lag greatlyreduces the amount of available cash andcan even threaten an enterprise's operations:

"It is difficult for construction companies,especially in the case of dealing with large,state-funded projects. In the case of oneproject, I didn't receive payment until six monthsafter it was completed. And in the meantime, Ihad to pay cash up-front for the materials."

Financial management is difficult becausefemale entrepreneurs often lack adequateknowledge and skills and/or competent andtrustworthy staff to carry out essentialfunctions:

"In small businesses, the owner usually has todo it all, including accounting and many otherjobs. I tried to recruit accountants to give memore time to focus on other things, but thequality of the candidates applying to privatecompanies was too low."

Ultimately, the lack of financial and accountingskills can also make it difficult for businesswomento generate profits that they can subsequentlyreinvest into their businesses.

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RECOMMENDATIONSAccording to women business owners, thegovernment can improve enterprises' accessto capital by introducing targeted policies thatcomplement its broader economic reformsand efforts to liberalize the banking sector.Simplifying the loan application processwould be a good place to start. According toDo Thi Tuyet Mai,

"The requirements and procedures that privateenterprises must go through to get credit fromfinancial institutions, including internationalfinancial institutions, are currently verycomplex and need to be simplified. Inparticular, enterprises that have beenoperating for ten or more years and haveestablished good reputations should be able toaccess capital."

Also, women entrepreneurs suggest that thegovernment encourage financial institutions,particularly private ones, to lend more toSMEs and women-owned enterprises. AsCao Thi Minh Hanh suggests,

"The state should help enterprises accessdifferent sources of capital, includinginternational sources of credit. Now mycompany is so much bigger than I imagined itcould be when I started it, but without betteraccess to capital, I won't have the courage tocontinue expanding it."

Finally, improving businesswomen's accessto training in the areas of financial, accountingand management would greatly improve theircapacity to manage cash flow.

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My business is the first private shipping companyin Vietnam to provide investments forshipbuilding. Its success has been possiblebecause my business partners and I were ableto mobilize a huge amount of capital fromfamilies, friends, and other informal sources.

Formal capital such as bank loans, on theother hand, accounts for only 20 percent ofour total capital. Collateral is the biggestissue we have encountered when applying forbank loans. My partner and I have to use ourhouses and land as collateral, but even thenwe can only borrow up to 70 or 80 percent ofthe real value of our properties; my houseand land allow me to borrow only VND1billion (approximately US$ 65,000) from thebank. We've been able to find customercontracts worth US$ 200,000, but with onlysuch small loans from the bank, we wouldnever be able to fulfill those big contracts.We can only take on a couple of smallprojects, up to the value of US$ 3 0,000, atone time.

Getting loans from the bank can also be verytroublesome. Any time we want to get a bankloan, we have to go through a lot of paperworkand complicated procedures. We have to getsignatures from several people, such as theprecinct officials and the district authorities, andthere are many unreasonable requirements.

Three years ago, when we needed capital toinvest in shipbuilding, we managed to borrow80 percent of the necessary VND35 billion(US$2 million) from a state-owned financingcompany. The loan has to be repaid inquarterly installments for about 10 years. Evenwith this loan, it was still very difficult for us tocome up with the 20 percent deposit - the so-called "corresponding amount" - that financingcompanies always require from borrowers.

Our reputation and credibility have enabled us toborrow from informal sources, but those sourcesare finite. We will need to have better access toformal sources of capital if we want to continueto grow. Within the next couple of years, asVietnam joins the World Trade Organization, thegovernment will have to open our currentlyprotected shipping market to foreign companies,and competition will definitely increase.

My solution to the problem of insufficient capitalis to use the funds I have effectively. Thismeans that I continuously have to turn over thecapital by investing and reinvesting profits backinto the business. If a company has unusedcapital, that means its management doesn'tknow how to do business. I also try to tap intodifferent sources of capital. For example, I haveset up a joint-stock group under which mycompany and two other private firms help eachother financially.

SAVING PENNIES TO MAKEPROFITS BE CREATIVEIN FUNDING YOUR BUSINESS

CAO THI MINH HANH, 47, is the general director ofInternational Trading and Shipping Co. Ltd. (ITS).Before founding ITS in 2000 with two other partners,Hanh worked for a state-owned ship charteringcompany for fifteen years and then for a shipping jointventure for several years. Her company now has fourbranches across the country and provides a range ofservices, including freight forwarding, import/exportservices, and investments for shipbuilding. Despite itsremarkable success so far, ITS will need increasedaccess to capital and improved financial managementto continue its growth.

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SETTING UP SHOP PROPERTY AND

INFRASTRUCTURE

Having access to sufficient land and properinfrastructure are two important policy-relatedissues that directly affect the livelihoods ofwomen in developing countries. In manyplaces, women face restrictions on owning,using and inheriting land, which in turnprevents them from using such property ascollateral to obtain business or even personalcredit.10 Poor infrastructure burdensenterprises and customers with increaseddelays and costs, ultimately hurtingprofitability and opportunities for expansion.In rural areas in particular, the lack ofsufficient power, telecommunications, water,and roads makes it difficult for women notonly to do business but also to carry outdomestic responsibilities.

LAND ACCESSWomen's access to and control over land hasbeen a longstanding issue in Vietnam.Officially, the state owns all land and grantsusage rights by issuing "Land UseCertificates" (LUCs) to businesses andhouseholds.11 Until recently revised legislation

- namely, the Law on Family and Marriage(2000) and the Land Law (2003) - specifiedthat family LUCs must list the names of bothhusband and wife, women were notguaranteed equal rights to land. At least tenmillion LUCs have been issued to individualhouseholds in an officially gender-neutralcontext, but because each LUC originally hadspace for only one person's name, many morewere issued to men, as the heads ofhousehold, rather than women.12 Even now,women continue to face obstacles in gettingland certificates (re)issued with their names;reasons range from varying degrees of locallaw enforcement to social factors such astraditional family practices.13 Ultimately, boththe lack of a legal land title and adequatephysical space impose serious limitations onwomen-owned enterprises, especially thoseinvolved in agriculture and manufacturing:

"Access to land is a major problem forprivate enterprises like ours. At the moment,many women entrepreneurs are stilloperating from home. When their businessesgrow bigger, they will be faced with thedifficult issue of finding land."

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INFRASTRUCTURE

Another related issue, particularly in ruralareas, is access to infrastructure. Evenurban enterprises cite the need for betterroads, ports, and bridges. Lack of adequateinfrastructure has limited production anddelayed some women business owners'plans for expansion:

"I own a company that sells both industrialand household electrical supplies. One of mydifficulties is that big ships cannot dock in DaNang, so I have to go to Ho Chi Minh City ona regular basis to get my merchandise."

In recent years, the government hasestablished industrial parks in key

locations, such as along nationalhighways or near airports. While thesezones are proving to be successfulmagnets for investment, their high rentsand distance from city centers rendersthem inaccessible to many womenentrepreneurs:

"It is very difficult for a company to getinto the industrial zone. And industrialzones are not necessarily good for allbusinesses - some businesses need to belocated in the city center so thatcustomers can find them. My company, forexample, supplies packaging materials andwe need to be accessible to ourcustomers, so a central location isnecessary for us."

Phan Thi Minh Tue, 49, is the director of

Phu Thanh Co. Ltd., a seafood processing

and exporting company in Can Tho. Before

she and her husband started their business,

Tue had 17 years experience in working for

state-owned seafood companies. Today, Tue

has 280 employees, and her exports are

worth about US$4 million a year.

Although Can Tho is considered the capital

of Vietnam's Mekong delta region, Tue

notes that inadequate investments in

infrastructure impede the development of

local enterprises:

"The roads and bridges are in badcondition,and investments in infrastructurehave been very slow. We have to firsttransport our shipments all the way to HoChi Minh City, and then put them in storagebefore we can export them. These extrasteps cost money and significantly lower ourprofit margins.

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RECOMMENDATIONS

According to women business owners inVietnam, the single most important reform thegovernment can undertake with respect to landis improving their access to it. As mentionedearlier, while women now enjoy the legal rightto land, obtaining LUCs in practice is still quitedifficult. In 2003 and 2004, after the revisionof the Land Law, a World Bank-funded pilotproject was implemented in several communesto ensure that LUCs included the names ofboth husbands and wives. Not only were asignificant percentage of certificates issued oramended, but the project also generatedgreater awareness of women's land rightsamong local officials and the general public.Reissuing certificates via this two-name

approach throughout the country can make iteasier for women entrepreneurs to establishtitle to land, provide lenders with evidence ofcollateral and obtain financing for theirbusinesses:

"There isn't a single enterprise in Vietnam thatisn't dependent on land or property. Enterprisesneed land-use rights in order to access capitaland invest in longer-term production."

The other major recommendation from womenbusiness owners is to improve "hard" (i.e.,roads, ports, telecommunications, etc.) and"soft" (i.e., labor and services) infrastructure inrural areas and industrial zones so that it iseasier for them to access suppliers, tap intohuman resources and reach customers.

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In 1989, after working for a state-owned seedcompany for thirteen years, I realized that Ihad spent a lot of energy, effort and devotion- all in vain. A major weakness of state-owned institutions was that they were notputting research into practice. Without anyplans, I decided to leave the job to developmy own career.

The legal climate in Vietnam was still verydifficult for private enterprises, especiallythose in agriculture. I thought that as anagricultural country, Vietnam could not affordto neglect the development of the seedindustry. Moreover, with no husband orchildren, I was in a better position thananyone else to do something meaningful.

I helped a Dutch friend find investmentopportunities in Vietnam's seed markets, andhe insisted that we set up a business. Tryingto avoid risks, I decided to start small, on my

own, and as a local private firm. I started thebusiness with my own savings. My parentsthought I was crazy. Back then, the Chinesecontrolled nearly 98 percent of the seedmarket in Vietnam, and competing with themwas not going to be easy. I would go toChinatown to observe the Chinese buyingand selling seeds and to learn about thetrade. I would stay there until 10 p.m.

Initially I had many problems because I was ascientist, not a businessperson. During the firsttwo years, I had only losses. I did a lot ofwork on my own - testing the market, breedingnew varieties and recruiting and training newstaff. I didn't own any land and so I had to usemy mother's house as an office.

I decided to focus on getting the farmers'acceptance. Instead of selling seeds throughagencies, I would sit in farmers' huts andsell to them [directly]. I believed that once

FOLLOWING YOUR VISIONSTAY PATIENT AND

PERSISTENT

NGUYEN THI BINH, 50, is the general managerof East West Seed Vietnam Co. Ltd. Binh, atrained biologist, used her savings of US$23,000to start a vegetable seed company in 1994. In1997, she set up a joint-venture enterprise withEast West Seed Group, contributing 30 percenttowards the company's start-up capital. Today,the business employs 200 staff across thecountry and has an annual growth rate of 40percent.

the farmers accepted the quality of our seeds,they would demand them from the agencies,who would then have to sell our seeds. Thisstrategy worked; today, we're supplying seedsto 200 agencies. My long-term goal is to focuson research and development (R&D). Myforeign partners initially wanted to centralizeR&D in Thailand, but they finally let me set upfacilities here with the business profits.

Starting up was extremely difficult, but theskills I had acquired previously, includingknowledge of finance and money management,helped. The biggest challenge for me, though,has been finding and training good people. It isvery hard because agriculture doesn't appeal toyoung people these days. Our turnover rate atthe beginning was extremely high. I think theyounger generation today lacks ideals andcommitment. During the American War, I lived

away from my family from the age of three; Ilearned to live in the forest and got used tobombings and malaria. All these things taughtme to be persistent. Without such a history, Iwould never have been able to make thisbusiness survive.

During my career as an entrepreneur, I havelearned a few lessons. First, never think youare unable to do business just because youdon't have capital. What you need, in fact, isknowledge and experience. Don't start big.Without experience, a big investment is a bigrisk - especially when our economy is stillchanging very fast. Start small with whateveryou have, accumulate experience and beeffective. Your business will grow along withyour experience and knowledge. The problemis not one of capital. Once you have provenyourself, the capital will find you.

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Vietnamese womenENTREPRENEURS

VOICES OF

28

MAKING CONNECTIONS

BUSINESS CULTURE AND NETWORKING

One of the biggest obstacles to the success ofwomen business owners in Vietnam, incomparison to that of their male counterparts,is their relative lack of business developmentand networking opportunities. Womenentrepreneurs believe that male businessowners have more resources and time at theirdisposal to advance frameworks and one-offmeasures such as loan assistance, trainingand incentives. Encouraging women'sbusiness networks is an importantcomplement to these efforts, since suchgroups can take on a life of their own andyield continued benefits.

BUSINESS CULTUREIn Vietnam, the experience of being a womenentrepreneur often involves seriousconstraints to doing business. Traditionally,business is considered men's work, andmany customs and practices discriminateagainst women either by restricting theirparticipation or through outright exclusion:

"In places like Hue, attitudes towards womenare still very conservative. If you talked toten men on the street, eight or nine of themwould say that women should stay home.Women entrepreneurs are still consideredstrange, as if they were breaking the order ofthings. And although many women are self-employed and run household businesses, theyaren't considered entrepreneurs. Theirhusbands don't want them to becomebusinesswomen."

Government relations, which are a vitalelement of business dealings in Vietnam, tendto be conducted in informal, social settings:

"Everybody knows that 60-70 percent ofgovernment-related business transactions orcontracts are signed at social gatherings, overdrinks. That's where men have the advantageover women - they can drink and have lots ofopportunities to network at social events."

Typically, it is inappropriate for women toparticipate in such gatherings, which cancreate disadvantages for their enterprises:

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30

"When I first started doing business, it wasvery hard for me to establish relationships withlocal government authorities. Being a woman,I couldn't invite them out for drinks or toparties, so I didn't have the opportunity to getto know them informally. I would only seethem when I had a problem related to mybusiness, so it was very difficult. I've hadproblems with the tax office, customs and localgovernment agencies."

Gender stereotypes also influence women'schoices and opportunities when it comes toparticular work sectors and occupations. InVietnam, sectors such as construction,politics, science, and technology aretraditionally viewed as male domains, whilehealth, education or labor-intensivemanufacturing (i.e. textiles, footwear) aredeemed more appropriate for women. Forwomen business owners who operate in"male" sectors, breaking into the world ofbusiness is definitely more difficult:

"Often it seems that clients and business

partners are less enthusiastic to conductbusiness with a woman, especially early in therelationship. This is especially true in sectorsthat are traditionally male-dominated. I makestainless steel products; this is considered aman's business. When I meet new clients,they often seem suspicious, as if they don'tthink that a woman can provide high-qualityproducts and services. It's not until we'veworked together for a while that they start totrust me."

It is not only customers who often display alack of respect; women entrepreneurs alsomaintain that managing men is also difficult inthe workplace:

"In general most male employees don't likehaving a female boss. But if they respect yourability, that negative impression will slowlyfade away."

Younger women, in particular, encountermany problems, since respect for elders, bothmen and women, is an important part of the

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Confucian legacy in Vietnam. Thecombination of youth and gender makes itharder to establish relationships withsuppliers, clients and employees:"Right after I graduated from university, Ibecame a shareholder in a company. Thepartners, who were older, often shot downmy opinions and comments. In their eyes, Iwas just a kid, and female at that. What I'mtrying to say is that women even have toovercome negative stereotypes held by theircolleagues, not to mention customers andbusiness partners."

Despite these obstacles, many womenentrepreneurs have developed ways to workwithin Vietnam's informal business culture. Insome cases, women work around genderbiases by sending male colleagues to networkwith partners and officials:

"When you deal with government authorities,one of the difficulties you face as a woman isthat they expect you to be demure, accepting,and to do what they tell you. If you are tootough, things are more difficult. But onceyou've made a good impression through yourwork, you can build a strong relationship. It'ssimilar when it comes to relationships withbusiness partners and customers. Mycompany sells technological equipment andprovides consulting services, so 95 percent ofour customers are men. To get a contractsigned can be quite an ordeal; sometimes itrequires taking customers out to a big dinner.But if there are women present, the men feelless comfortable and have to watch theirbehavior...so often I ask my project managerto do the negotiation with partners in myplace. It's easier for two men to talk."

Over time, by using the "appropriate" behaviorto their own advantage, women can subtlyreshape the way business is done in Vietnam.Women business owners tend to find thattheir people and relationship managementskills ultimately stand them in good stead withpartners and clients who may initially doubttheir abilities:

"If you are a woman, and especially a youngwoman, doing business, customers areautomatically skeptical at the beginning. Onetime, a customer came to my company andinsisted on meeting with the director. When hemet me, he was visibly taken aback becausehe thought I was too young. But after we haddiscussed business for a while, I saw hisattitude change, because he realized that I ama capable professional."

NETWORKINGBusiness associations provide anotheropportunity for women to get around "old boy"networks. Such groups provide a setting inwhich women can share information, formpeer relationships and build partnerships withother entrepreneurs. The WomenEntrepreneurs' Council, which is part of theVietnam Chamber of Commerce and Industry,was the first association for registeredwomen-owned enterprises in Vietnam; inrecent years, a number of associations forprivate companies have also beenestablished. In addition, other massorganizations, such as the Vietnam Women'sUnion and Youth Union, have made efforts tobuild relationships between SMEs, especiallythose in the informal sector.

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Alan Duong, 30, is the owner ofMosaique, an upscale furniture and home-accessories company based in Hanoi. Alanspent six years in a refugee camp in HongKong and returned to Vietnam in 1996.She started up her own business in 1998at the age of 23 and today, she employsmore than 100 staff at three Mosaiquestores. Exports account for about 80percent of Alan's production.

To make up for her lack of formaleducation and training, Alan has goodtaste and a passion for the deùcor business.

"This business is very demanding. Itrequires capital, connections, technicalskills and experience. It involves hundredsof people from production, exporting,transportation, and finance, and is evendependent on the weather! You have tomake sure that all processes are in placeand everything goes smoothly in order tomeet deadlines. You have to be verydynamic to be in this business. If I didn'tlove it, I couldn't be in this business."

Before starting her home deùcor business in

1998, this young and outgoing woman had already established a wide network of personal and business contacts whileworking as a realtor for foreign clients.Alan understands the role of marketing andnetworking in doing business - that's partlywhy she opened Mosaique Living Room,the first members-only club in Hanoi, ayear ago.

"I see business relationships as mutuallybeneficial - my partners and I createbusiness opportunities for each other."

Alan has supplied deùcor items tocompanies such as Neiman Marcus in theU.S.A., Hong Kong-based Shanghai Tang,and stores in Japan and Singapore.

However, access to associations inVietnam is limited because such groupshave limited service capacity. Also, due totheir own personal time constraints, manywomen view mass associations more associal organizations rather than as usefulbusiness networks.

In several cases, women entrepreneurs areestablishing their own informal groups as away to stay connected and even provideaccess to capital:

"Business associations provide a forum throughwhich women entrepreneurs can meet oneother. However, most women entrepreneursdon't have a lot of time because they split theirtime between family, friends and society, andtheir companies. Women can form smallgroups within associations, like the women'sgroup of the Ho Chi Minh City YoungEntrepreneur's Association. When we meetonce a month, we always find a lot to talkabout, because so many of us are in the sameboat. Businesswomen understand one another- we can relate to each other's difficulties andprovide one another with advice and feedback."

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RECOMMENDATIONSAlthough the Vietnamese government haslong been committed to gender equality,women business owners believe that thereis still ample opportunity to reducediscriminatory attitudes and practices in theeconomic arena. Publicly highlightingwomen's achievements and expandingnetworking opportunities for women are twopotential measures that the government cantake. As Cao Minh Truc observes:

The issue for Vietnamese womenentrepreneurs is not necessarily that theyface discrimination, but rather that they lackinfluence. There need to be fora wherewomen can really raise their concerns. Reallife often occurs before laws are made. Ifmany people raise their voices, the laws willhave to follow real life."

In developing recent policies affecting thebusiness community (including theInvestment Law, Enteprise Law and SMEDevelopment Plan), the Vietnamesegovernment has consulted with a wide rangeof stakeholders, including over 30 businessand civil society organizations such as theVietnam Women's Union and the VietnamChamber of Commerce and Industry. Thistype of public-private dialogue is an effectiveway for women entrepreneurs to raise theirissues with upcoming policies that mayaffect their businesses; perhaps in the futurea more formal and permanent mechanismthat focuses specifically on businesswomenmight be established. The governmentcould also consider measures thatspecifically encourage business networkingactivities among women entrepreneurs. `

I was one of the many people who jumpedinto the labor services industry as soon asthe government opened the market up toprivate companies. I started with aninvestment of VND100 million (US$65,000)from my family's savings, with five employeesand a tiny office.

Now my business covers a full range ofrecruitment and training services. We cansupply companies with workers, secretaries,accountants, sales supervisors, andexecutives. On average, we've grown by 150percent per year.

My biggest achievement so far is that I havebuilt a brand name for the company. There aredifferent ways for companies to build areputation. Some use the media, advertising orpublic relations. I have tried to build a culturefor my company. The core values I promoteinclude professionalism, caring, and dynamism.I think the culture of a company is primarilyinfluenced by the style of its own leader.

This market is getting increasinglycompetitive, but I am prepared. To avoidcompetition, we have to find our niche. Mystrategy is to focus on the high-end market -to train and provide consultants and

MANAGING RISKS LOOKBEYOND YOUR BUSINESS

PHAM THI MY LE, 34, is the director of

Le & Associates Co. Ltd, a Ho Chi Minh

City-based management consulting and

training company with annual revenues of

VND11 billion (US$750,000). Le founded

L&A, which provides a range of personnel

services, private management consulting,

and professional training, in 2001. L&A

currently employs 600 people in positions

ranging from workers to executives. The

company's main challenges include

maintaining its brand, growth and staff

amidst increasing competition.

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executives. We will provide training courses notonly on skills but also on behavior and self-motivation. In the future, I will look for foreignpartners who can help bring our services up to"international standards".

A key investment principle is diversifying risks.I also have stakes in other businesses - asoftware firm, an occupational health andsafety consulting joint venture, and atranslation services and overseas education

company. Sometimes I look for investmentopportunities, but other entrepreneurs also justcome and find me.

The greatest difficulties I have faced in businessare managing people and time - capital andother issues are easier to handle. Also, SMEslike mine don't have money to spend on marketresearch, which can cost more than setting up anew business, so we often base ourinvestments on qualitative information.

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Vietnamese womenENTREPRENEURS

VOICES OF

36

DAY - TO - DAY MANAGEMENT

RUNNING A BUSINESS

For female entrepreneurs in Vietnam, runninga business successfully involves makingseveral decisions on a daily basis and in anincreasingly competitive environment. Someof these - government policies, financialmanagement, and professional networking -have already been discussed. Among themany other aspects of managing anenterprise and maintaining itscompetitiveness, women business ownersconsider market expansion and humanresources the most important areas forpotential policy intervention.

EXPANDING MARKETS

Vietnamese women entrepreneurs are morethan aware of the challenges arising frominternational economic integration andresulting competition from other countries:

"My company is facing harsh competition fromforeign companies who operate in the sameindustry. They have better technology, betterworking conditions and more capital. They can

sell goods at lower prices because theirtechnology enables them to produce at lowercosts. Because my company's technology isout of date, my prices are higher. Inaddition, because there are so manycounterfeit goods on the market, customersprefer to buy products from large companieswith brand names rather than from smallcompanies like mine, even if our product andprices are the same."

Given the country's delay in WTO accession,those involved in the manufacturing industry,particularly the garment and footwear sectors,have already had to deal with loss of marketshare to Chinese producers and continue toharbor concerns about the future:

"When Vietnam joins the WTO I will be moreworried. Many more enterprises will beestablished, and many big companies willcome to Vietnam, making the competition evenfiercer. For example, a Chinese company sellsa shirt that I sell for US$5 at only US$1 - howcan I compete with that? I think theiradvantage is that they must be getting somegovernment support."

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Most women entrepreneurs are interestedgrowing their businesses through a variety ofmeans, such as: better customerrelationships, larger trade and exportnetworks, the use of national trademarks andbranding campaigns, technology upgrades,and staff training. However, they face anumber of obstacles, including a lack ofresources, time, information, and linkages topotential partners and markets.

Nevertheless, several businesswomen believethat global developments will bode well for

Vietnam's economy and have a number ofconcrete suggestions at both the enterpriseand government levels. For example,partnerships with foreign companies or otherlocal enterprises are a viable opportunity forwomen entrepreneurs who want to expandtheir businesses, as they can pool resources,undertake joint activities, and accessnecessary expertise and technology:

"I think I need to join forces with other cakemanufacturers in order to develop our ownbrands. Many brains can always generatemore ideas than one."

Tran Thi Le Quy, 63, is the director of DaNang-based Phu Ngoc Co. Ltd., acompany that produces and suppliesliquid medicine containers to thepharmacy industry. She currently employs20 workers and has an annual revenue ofVND1.5 billion (US$95,000). Quy hadoperated the production as a familybusiness for 20 years before registeringthe business as a company in 2002. Hermain focus now is on staying competitive.

Technology improvement has been vital toQuy's business success and remains acentral concern in her business strategy.Quy was the first in her sector to switchfrom manual to mechanical production,which has enabled her to secure herposition in the market:

“Everyone in this business, from central tonorthern Vietnam, seals the product by hand; Iam the only one who has switched tomachinery. It's lucky that I switched, becausejust after I did, the government made itmandatory to use machine sealed containers."

The new equipment, technology transfer,and worker training required an investmentof VND1 billion (US$65,000). Quyborrowed the capital from a bank using herreal estate as collateral. However, Quyanticipates that she may need to invest afurther US$360,000 in technology toupgrade her production.

"The government will continue to upgradeindustry standards, and the market will alsodemand higher quality, especially now thatVietnam's presence is increasing in theworld market. We have to continually adaptand upgrade our products."

Mai learned about business managementfirsthand after her first business failed. In themid 1990s, seeing how fast the livingstandards of Vietnamese people wereimproving in the big cities, Mai started toimport and supply equipment and servicesfor swimming pools and saunas. But withoutthe skills necessary to manage a business,especially marketing skills, she failed.

"I accurately predicted the growing demandsof the market, but that wasn't enough. Ididn't do proper market research, and didn'tplan carefully...so I ended up importing alarge shipment of products before I had doneany marketing. So I ended up with a largedebt and didn't have the money to pay it."

Since then, Mai has appreciated theimportance of market knowledge and marketing skills to business successes.Two years ago, when she decided to investin producing e-books and educational toysfor children, she spent much time andeffort on marketing, advertising, andestablishing the distribution system evenbefore her products entered the market.

Mai, who eventually aims to export herproducts particularly to the Vietnamesecommunities overseas, finds businessassociations and other networking channelsbeneficial to her business in terms ofmarketing, updating information and findingbusiness partners.

Nguyen Thi Hong Mai, 36, is the director of Hong Phat JointStock Company, a business that produces andsupplies e-books and educational toys. In 1997, shestarted her first business, which supplies swimmingpool and sauna equipment and services. Mai startedHong Phat in 2003 and currently employs more than30 staff. Together, her two businesses currentlygenerate more than VND30 billion (approximatelyUS$2 million) a year in revenue. Mai is also the vicechairperson of the Hanoi Young BusinessAssociation. She attributes her success to havingdeveloped a keen understanding of marketing, whichshe has applied to her businesses.

39

Many women suggest that the governmentshould make greater efforts to promote SMEsby developing better trade promotioninitiatives and providing greater support:

"Trade promotion programs have not been veryeffective to date. There are hardly any womenentrepreneurs who can afford to attendinternational trade fairs on their own to findnew customers and markets...so government-sponsored trade promotion programs shouldconsider paying for a booth that a group ofwomen entrepreneurs can share at these typesof fairs. In addition, local governments shouldconsider giving discounts to womenentrepreneurs who want to rent space atprovincial commercial centers."

FINDING AND KEEPING TALENT

Women entrepreneurs believe that havingtalented people is crucial to the long-termsuccess of their enterprises. However, inVietnam, attracting and retaining capableemployees is one of their biggest challenges.Private businesses are often at adisadvantage compared to state-ownedcompanies in attracting good people becauseof a widespread perception that state-ownedenterprises provide better working conditionsand job security. They must also competewith foreign-owned companies for talent.

40

Quach Kim Hong, 39 and of Chinese origin,is the president of Ho Chi Minh City-basedTruong Vinh Garment Export Co. Ltd.

After working for several years atTaiwanese and Hong Kong-basedgarment companies, Hong started her owncompany in 1995. Hong's company is nowsubcontracted to produce brand nameclothing for export including Adidas,Reebok, Lee, and Nike. Hong employsmore than 600 workers, of which 80percent are women.

Attracting and retaining workers havebeen the biggest concern for Hong.Monthly staff turnover at her businesshas been 10 percent. The rate - althoughnot unusually high among privatecompanies in Ho Chi Minh City - hasnegatively affected Hong's business andslowed her expansion ambitions.

"As hard as we try, we just can't competewith the wages that foreign-ownedcompanies pay their workers. Even thoughworking for foreign-owned enterprises ismuch more demanding, workers are easilytempted by higher pay. It's very difficult forme to retain workers, especially since weare surrounded by foreign companies in thisindustrial area."

Hong, however, believes that as aVietnamese businesswoman, she hasadvantages over foreign companies,particularly in understanding workers'feelings and needs.

"In this business you have to stay in closetouch with the workers. My workers knowthat they can come to my office anytimethey have a problem. We speak the samelanguage and I can understand the mindsetof my employees. Employees of foreign-owned factories go on strike all the timebecause they have issues with theirmanagement...we've never had a strike inmy company."

Hong's believes that her human resourcedepartment is probably too large, but sherecognizes the importance of recruitment andtraining, and of being able to deal with issuesthat concern her workers, such as housing,insurance, health, and family affairs.

"Family lives need to be stable, or workerswon't be able to perform well. So ourcompany always tries to help out the familiesof our workers when they are havingdifficulties."

Hong offers housing allowances and rents anearby dormitory for workers from otherprovinces. She is also setting up a vocationalschool where she will train about 100workers a month. Although Hong had tomake a lot of changes and investments tomeet the standards required by internationalcompanies such as Nike, she has found thatthese efforts have helped improve thecompany's management and quality controlsystems and her staff's working conditions.

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Also, as the private sector grows, manybusinesses also find that some of theirbest employees are leaving to start theirown businesses:

"I think the main reason is that everyonewants to eventually become his or her ownboss - no one wants to work for othersforever. Many of my employees have goneon to start their own companies oncethey've learned the business. This isinevitable. When my company grows bigger- who knows? My business partners maybe former employees."

Many women adopt different strategies toavoid high staff turnover. Some provideincentives to staff or attempt to improveworking conditions, but a general lack ofresources means that many cannotincrease salaries or provide trainingprograms:

"Due to the nature of our industry, womenaccount for over 80 percent of the totalemployees in the company. With regard towomen who are key professional staff, wesupport them in getting more educationand skills training. When it comes toworkers, we are concerned about theirhealth and with helping them care for theirfamilies."

Businesswomen find it particularlydifficult to recruit skilled and qualifiedhuman resources in poorer areas, whereeducation levels are often lower than inurban centers:

"In general I'm frustrated about theslow pace of development in theMekong Delta region. Anymanufacturing company that wants touse technology will have a difficulttime, because it's hard to find workerswith high skills. Any company,regardless of what industry it's in,needs technology to develop. For acompany to grow it must continuouslyimprove its products. But this cannothappen unless the skills and abilities ofworkers in the region are improved "

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RECOMMENDATIONSAs Vietnam integrates with the globaleconomy, the SMEs that are powering itsgrowth will need to become and remaincompetitive. Towards this end, womenbusiness owners would enthusiasticallywelcome more government-sponsoredtraining programs and assistance targetingboth entrepreneurs and staff. Suchtraining, according to them, should not onlycover general business issues but also avariety of specific areas, includingtechnology (both as it relates to production,as well as to computers and the internet ingeneral), marketing and strategy, businessand financial management, and humanresources. It should be made available ona wide scale and on an ongoing basis,especially in rural and/or poorer areas.Interestingly, a number of businesswomenexpressed a strong preference for gender-specific business and managementtraining, partly because of the increasednetworking and experience-sharingopportunities that a women-only trainingenvironment can provide.

Another key area for government action isexpanding market access for womenentrepreneurs. Increasing information onpotential markets, conducting trade fairs,encouraging study trips abroad andestablishing promotional offices abroad canhelp businesswomen establish internationallinkages with intermediaries andcustomers.

Finally, women business owners believethat the government should put higherpriority on the national human resources

development by reforming the existingeducation system. As Nguyen Thi Binh remarks, the need for reform in this area ispervasive:

"The education system needs a completeoverhaul. The schools have not been ableto teach our students how to thinkindependently. In terms of developing ourhuman capital, our country has been veryslow. This is a huge obstacle forenterprises like ours."

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The most important skill I have learned over theyears is how to manage people, including howto handle the relationship with my husband inour business. Private companies like ours facemany problems in terms of human resourcesmanagement. It's very difficult to recruit andretain good people; typically, those who areinexperienced or incapable stay, while the goodones leave. The issue is a particularly pressingone in our rapidly growing southern market,where workers are less interested in savingsand other employers can easily lure them awaywith higher pay.

We've set up our own training center where wetrain about 100 workers a month. We can'tafford to pay our workers very high salaries, butwe try to emphasize professionalism, form a

bond between them and the company, andmake them feel secure about their jobs. We nolonger take on short-term or part-timecontractors; instead, we focus on long-termcontract employees so that we can ensure astable work environment. Now we havemanaged to maintain a reasonably steadyworkforce, with a turnover rate of about threepercent a month.

Managing people is still the biggest challengefor me, though. I'm certain that some timesoon, there will be a dramatic adjustment inthe wages in the labor market. If workers arenot satisfied with their salaries, they will quit.But it's not easy for us to pass raises ontoclients. If low pay becomes a big issue in ourcompany, it will be the death of us because

VALUING PEOPLERECOGNIZE THAT EMPLOYEES CAN BE YOURSTRONGEST ASSET

PHAM THU HA, 43, is the vice director ofHanoi-based Hoan My Co., a provider ofcompany cleaning services, equipment andtechnology. Ha and her husband, thecompany's director, started the business in1997 and since 2000, they have expandedoperations to central and southern Vietnam.As for many other businesses, humanresources management poses a majorchallenge to Hoan My. The company, whichhas annual revenues of VND37 billion (US$2.4million), employs about 2,000 staff across thecountry, providing services to hotels, officebuildings, industrial complexes, and hospitals.

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all of our staff are laborers. Ourbusiness has been growing very rapidly,but I want to slow things down so wecan make adjustments. We need tohave a defense strategy - to find a wayto increase the income for workers.

Up to 90 percent of our employees arewomen who come from the countryside.We haven't received any assistancefrom the government, although we'recreating jobs for the poorest people inthe society. On the contrary, the currenttax rules make it even harder to managehuman resources. While I have to spendup to 70 percent of the company'sexpenses on workers' salaries, the taxauthorities have established a top-endlimit of 50 percent. With such a rule, itwould be very difficult for us toincrease workers' salaries. It's alsodifficult for us to give bonuses andother extra benefits to our femaleemployees because the tax authoritiesdon't consider these outlays asenterprise expenses.

Managing family relationships in ourbusiness has also been a challenge. It'sironic that my husband and I didn't haveany problems when we faced difficulties,but issues have emerged since we havebecome successful. Even in ourbusiness, I try to act as the wife. I thinkI have good intuition and I know themarket better than my husband does,but I just offer a different opinion and lethim make the final decisions. As awoman, I have to consider the familyabove all else

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Vietnamese womenENTREPRENEURS

VOICES OF

46

BUSINESSAND FAMILY

WORK - LIFE BALANCE

As women throughout the world have greateraccess to economic opportunities, they areincreasingly able to contribute financially to thewell-being of their families. However, they mayalso encounter more complications in balancingwork and family life. In many countries,traditional expectations of a woman's role andfunctions within the family can persist,potentially leading to a "double shift, doubleburden" for those who work outside the home.This is especially true for many women indeveloping nations, "where poverty and lack ofinfrastructure can make the most basic tasksharder and more time-consuming".14 Forwomen entrepreneurs in particular, time spenton domestic duties can leave them with lessavailability for other activities that may helpgrow their businesses, such as training,networking and business development.

FAMILY RESPONSIBILITIES

In Vietnam, women entrepreneurs strive tobuild successful businesses while alsomaintaining a strong role in their families.Many believe that balancing work and familycan be much harder for women than for men.Women often feel pressure, either self-inflicted or from others, to put their familiesfirst before their businesses:

"Sometimes I feel women have to dividethemselves in two halves: one for family andone for society."

Another woman told us,

"I have worked for over 20 years, but in mymind it's always 'family and work,' never 'workand family.’ ’’

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The ability to make quick and effectivedecisions is a key aspect of managing anybusiness. Although women entrepreneursrecognize that business advisors orconsultants can add value to their enterprisesand help them with key issues, the high costof such expertise prevents many women fromactually employing them. Instead, manywomen in Vietnam frequently turn to familymembers for advice before making importantbusiness decisions:

"Both my husband and I are entrepreneurs, sowe often discuss business matters. Myhusband has good ideas...everyone looks atan issue from a different perspective.Sometimes he helps me by giving me anumber of options from which to choose. Butother times I just have to make my owndecisions and stick to them."

Family members, especially husbands, canprovide varying levels of support:

"If both a husband and wife are entrepreneurs,they can discuss business with each other...butif they do different things, it's more difficult.Family happiness is ultimately determined bythe woman."

Many women managers of family enterprisesindicate that even though they exercise defacto operational control, it is extremelyimportant to have important decisions appearas though they were made by their husbandsor another man in the family.

SOCIAL PRESSURESMost women entrepreneurs in Vietnamcherish their traditional roles and influenceswithin their families, but they are alsosensitive to the fact that societal conventions,which stem partly from patriarchal Confuciantraditions, may complicate their efforts tostrike a balance between business and

With little business experience and a smallamount of capital borrowed from her familyand friends, Huong started a business as asmall-scale trader.

"In the beginning, foreign business partnersdidn't take me seriously because theythought I was too young. I knew nothingabout running a business. I was

just learning by doing - learning from eachexperience about dealing with customers."

Two years later, Huong was ready to setup a company. She was also pregnant withher first baby.

"It was such a difficult time for me. I wasdoing everything myself, even makingdeliveries to my customers."

Tran Thi Lan Huong, 29, is the director of Hanoi-based Nam Son Trading and Production Co. Ltd., abusiness that assembles, produces and distributesbathroom and kitchen equipment. Huong started herbusiness in 2001 and registered it as a privatecompany in 2003. As is common for many womenentrepreneurs in Vietnam, Huong has found that herfamily is both an invaluable source of support as wellas a significant time commitment.

personal life. Those who want theirbusinesses to grow find that practicalconsiderations, such as time and resources,can limit their choice of activities:

"I want to grow my business, but only to theextent that I can manage it. I don't want mybusiness to expand to a point where it's beyondmy own management capacity. As a woman,I have a lot of other responsibilities to both myfamily and society."

However, other women feel that genderbiases prevent society from acknowledgingtheir achievements and contributions:

"When your business achieves a certain levelof success, you want to take some pride in it.But when a woman entrepreneur is successful,sometimes she isn't given the credit shedeserves, and instead, people will say that sheused her femininity to get ahead. When I hearsomething like that, it bothers me, and itaffects my work and attitude. I feel like all ofmy efforts, the fact that I worked all thoseyears and sacrificed spending time with myfamily hasn't been recognized and valued.This is especially difficult for youngerbusinesswomen who are successful, as theymay have small children at home and thereforemore family responsibilities...it's probably a bitbetter for older women."

Occasionally, some women entrepreneurshave even had to defend their right tosuccess, wealth and a career.

STRIKING A BALANCEAlthough juggling work and family can bedifficult, many women entrepreneurs havedeveloped their own creative and effectiveways of managing their time and otherpeople's expectations:

"The biggest lesson I've learned in running myown business is the importance of planning my

time and relying on the right people. I didn'thave my first baby until six years after I gotmarried because I couldn't juggle work andfamily at the same time. Before I had mybaby, it wasn't unusual for me to work 16 hoursa day. Now I work 10 hours a day, and when Iget home, I focus solely on my baby. Imanage this by delegating responsibility toothers At home, I have a housekeeper, and atwork, I have slowly moved away from dealingwith day-to-day management of the companytowards focusing on strategy and businessdevelopment."

Women find that networking with otherwomen, sharing experiences and discussingstrategies both helps and inspires them tocontinue with their efforts. Through theirsuccesses, businesswomen challengetraditional Vietnamese gender roles on a dailybasis, ultimately paving the way for the nextgeneration of female entrepreneurs.

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RECOMMENDATIONS Although Vietnam is a regional pioneer in the area of gender equality, women business ownersbelieve that more can be done to improve business opportunities. At a broader level,government and society should recognize that

"Equality doesn't mean that women want to trade places with men. They still want to be wivesand take care of the family. Society needs to provide more support for women-ownedenterprises, because women entrepreneurs have to juggle both family responsibilities and runtheir businesses."

In terms of specific policy solutions, besides investing in the infrastructure and services thatwomen need to coordinate their family and professional lives better, providing more access tobusiness and management training would be a smart way for the government and society to go.As Do Thi Tuyet Mai suggests,

"Women entrepreneurs need better access to business education and training so that theycan manage their businesses better. Training courses need to help women establish longer-term strategies for their businesses. Women entrepreneurs would benefit from having accessto networks where they could ask questions of each other and share experiences aboutrunning a business."

During the next few months, the National Assembly is expected to pass the Law on GenderEquality, which not only reinforces the principle of gender equality in various arenas, includingeconomic and social, but also will outline specific policy measures to support women'sempowerment and shape a more equal society. The Vietnam Women's Union has been activelyinvolved in helping the government solicit feedback on the law from business groups and thebroader public so that it can be relevant and effective.

51

As their candid confidences throughout the

preceding pages reflect, women business

owners confront a wide range of obstacles to

establishing, managing and expanding

enterprises in Vietnam. Yet, instead of

passively waiting for top-down reforms, these

female entrepreneurs have already been

working around many of these problems with

remarkable energy, flexibility and persistence.

Their stories share a recurring theme of not

only adapting to restrictive conditions but also,

in some cases, transforming barriers into

opportunities.

Despite the individual successes highlighted

here, it is clear that further policy reforms and

encouragement from the government and

donors would greatly benefit the majority of

women entrepreneurs in Vietnam. Already,

significant efforts to further women's

opportunities in business are underway. The

Vietnamese government has demonstrated

not only a strong history of but also a firm

commitment to advancing women's

opportunities and economic development;

both the Socio-Economic Development Plan

2006-2010 and the draft SME Development

Plan 2006-2010 include support for women-

owned enterprises. The upcoming Law on

Gender Equality not only aims to ensure equal

opportunities for women politically, socially

and culturally, but also seeks to empower

them economically, specifically in the areas of

business ownership, management and labor.

It also requires that all future legislation and

policies undergo a gender assessment before

their adoption, so that any potentially negative

impact on women can be addressed first.

Finally, to complement the government's

efforts, local and international donors have

undertaken a variety of programs to assist

women's entrepreneurial activities.

However, while the above measures hold

some promise, much more needs to be done.

From an overall perspective, the programs

that do exist in Vietnam seem somewhat ad-

hoc and even inconsistent. A comprehensive

strategic framework and system for supporting

women's enterprise development appears to

be missing. It is time to look at this issue

critically and thoroughly to help Vietnamese

women business owners further realize their

potential and contribute to the country's

economic development and poverty

alleviation. Female business owners are a

valuable source of information in identifying

existing problems and devising potential

solutions. Perhaps, as in other countries, a

more formal mechanism that incorporates

their ideas and feedback will lead to more

effective and sustainable policies and reforms.

We urge the Government of Vietnam,

businesses, donors, and the general public to

keep these remarkable entrepreneurs' voices

in mind as they continue to work together to

improve Vietnam's business environment and

generate prosperity.

FINAL THOUGHTS

For more information, please consult the Gender Entrepreneurship Markets website athttp://www.ifc.org/gem and the Mekong Private Sector Development Facility website athttp://www.ifc.org/mpdf.

1 Official statistics do not always reflect the extent of these contributions, as women'seconomic activities tend to occur largely in the informal sector. According to UNFPA, womenconstitute approximately two-thirds of self-employed entrepreneurs in the informal sector. SeeUnited Nations Population Fund (UNFPA), State of World Population 2005: The Promise ofEquality: Gender Equity, Reproductive Health & the MDGs, 2005.http://www.unfpa.org/swp/swpmain.htm

2 Vietnam is regarded a leader among Asian countries in institutionalizing gender equity. SeeAsian Development Bank, Women in Viet Nam CountryBriefingPaper,Manila:November2002.http://www.adb.org/Documents/Books/Country_Briefing_Papers/Women_in_VietNam/default.asp

3 Amanda Ellis, International Finance Corporation, January 2005. The estimates cited arefrom official statistics and the Chamber of Commerce. Another estimate, from the NationalCommittee for the Advancement of Women in Vietnam (NCFAW), states that 24.7 percent ofenterprise owners in Vietnam are women. See Dang Huynh Mai, "Progress in GenderMainstreaming - Vietnam," Speech from APEC Conference, 2002.http://www.apec.org/apec/documents_reports/ministerial_meeting_on_women/2002.html

4 International Finance Corporation, "Women Business Owners in Vietnam: A NationalSurvey" Private Sector Discussion Paper No. 21, Hanoi, Vietnam: March 2006.http://www.ifc.org/ifcext/mekongpsdf.nsf/Content/PSDP21

5 In Vietnam, the private sector is estimated to contribute 42 percent of GDP and 56.3percent of jobs. See "SME Factsheet," SME.com.vn.http://www.sme.com.vn/Article.aspx?TopicID=107.

6 World Bank and International Finance Corporation, Doing Business in 2006: Creating Jobs,Washington, DC: 2006.

7 International Finance Corporation, "Women Business Owners in Vietnam: A NationalSurvey."

8 Asian Development Bank, Women in Viet Nam, page 22.

9 Asian Development Bank, Women in Viet Nam, page 21.

10 UNFPA, State of World Population 2005: The Promise of Equality, page 14.

11 "The Good Pupil," The Economist, 6 May 2004.

12 International Finance Corporation, "Gender Equal Land Laws: Driving Business Forward,"page 3. http://www.ifc.org/ifcext/enviro.nsf/Content/GEM_BPNotes

13 Asian Development Bank, Women in Viet Nam, page 14.

14 Susanne E. Jalbert, "Women Entrepreneurs in the Global Economy," 17 March 2000, page30. http://www.cipe.org/pdf/programs/women/jalbert.pdf

NO

TES

52Giaáy pheùp xuaát baûn soá: 118 - 2006 / CXB 118-15 / LÑ ngaøy 16-2-2006In 700 cuoán - In xong vaø noäp löu chieåu thaùng 8-2006

Promoting gender equality is recognized as so

essential to reducing poverty and improving

governance that it has now become a development

objective in its own right (Millenium Development

Goals). As women comprise the majority of the

poorest 1.3 billion people who subsist on less than

US$1 a day, they warrant special attention as a

target group for poverty reduction. However,

women themselves are also a critical part of the

solution. Increasing their economic opportunities is

integral to meeting not just one, but all of the eight

Millennium Development Goals.

Women's private sector activity in the formal and

informal economies, both as employees and as

entrepreneurs, has increased significantly over the

past decade. However, women are more likely to be

stuck in the informal sector due to specific legal

impediments and/or cultural norms that restrict

female labor force participation and business activity.

Addressing gender discrimination in the broader

investment climate is a prerequisite to unleashing

economic growth and making progress towards

gender equality and the empowerment of women.

Women entrepreneurs should have a key role to

play in influencing public policies, especially those

affecting their businesses. At the moment, their

voices are often lost or unheard by policymakers.

A great many women entrepreneurs are being

isolated, both emotionally and geographically, and

lack access to traditional networks or spheres of

influence, which make them less competitive and

place them at a disadvantage compared to their

male counterparts. Addressing the specific

barriers faced by women entrepreneurs is good for

growth and critical for poverty reduction.

Unleashing their full economic potential will benefit

not only women themselves but also their families,

society and the economy overall.

Ms. Amanda EllisHead of

Gender Entrepreneurship MarketsInternational Finance Corporation

HANOI3rd Floor, 63 Ly Thai To St.Hoan Kiem Dist., Hanoi, Vietnam Tel: (84-4) 824 7892Fax: (84-4) 824 7898

HO CHI MINH CITY3rd Floor, Somerset Chancellor Court21-23 Nguyen Thi Minh Khai St.Dist 1, Ho Chi Minh City, VietnamTel: (84-8) 823 5266Fax: (84-8) 823 5271

PHNOM PENH70 Norodom Blvd,Sangkat Chey ChumnasP.O. Box 1115.Phnom Penh, CambodiaTel: (855-23) 210 922Fax: (855-23) 215 157

VIENTIANENehru Road, Pathou XayP.O. Box 9690Vientiane, Lao P.D.R.Tel: (856-21) 450 017-9Fax: (856-21) 450 020

Gender- Entrepreneurship-Markets (GEM)International Finance Corporation2121 Pennsylvania Avenue, NWWashington, DC 20433, USATel: (001-202) 473 1028Email: GEM-info@ ifc.org

Recognizing that aspiring businesswomen are oftenprevented from realizing their economic potential

because of gender inequality, IFC launched the Gender-Entrepreneurship-Markets (GEM) initiative in December

2004. The program aims to mainstream gender issuesinto all dimensions of IFC's work, while at the same time

helping to better leverage the untapped potential ofwomen as well as men in emerging markets. If you

would like more information on IFC GEM's work, pleasevisit our website at: http://www.ifc.org/GEM

IFC-MPDF is a multi-donor funded initiative set up bythe International Finance Corporation in Vietnam,

Cambodia, and Lao PDR, to reduce poverty throughsustainable private sector development. We work

through six interrelated programs that seek to improvethe business environment, develop the financial

sector, improve managerial capacity, and increasesustainable business practices in three sectors that

are central to economic growth and poverty reduction- tourism, agribusiness, and garments. IFC-MPDF'sdonors are the Asian Development Bank, Australia,

Canada, Finland, IFC, Ireland, Japan, New Zealand,the Netherlands, Norway, Sweden, Switzerland and

the United Kingdom.Website: http://www.ifc.org/mpdf