The Importance of Gender in Private Sector Development May 2006 Amanda Ellis Gender Entrepreneurship Markets (GEM) 1
Presentation Outline Why gender matters for private sector development and growth Investment climate issues Case study Kenya Making progress in Africa 2
Why Gender Matters to PSD and growth Private sector engine of growth Women entrepreneurs up to 50% of total (including informal sector) Women majority of informal economy & poor WOB higher loan payback rates & lower start up failure rates yet barriers to formal financing Job creation eg China, US female employment multiplier Driver of growth - UK/Canadian investment climate/gender 3
Investment Climate Issues Women Face More/ Different Obstacles Legal restrictions Gap between policy and practice Cultural discrimination and attitudes 4
Why Gender Matters for PSD WBG PSD Approach: working with client Govts on Diagnostic, Solution design, Implementation DIAGNOSTIC TOOLS Doing Business benchmark indicators (rank countries on ease of doing business regulatory/legal framework) Surveys of entrepreneurs (Enterprise surveys that inform Investment Climate Assessments) Gender and Growth Assessment, FIAS Administrative Barriers 5
Unintended Consequences Women s Share of Private Sector Development Source: Doing Business database, World Bank (2004a), WEF (2004). 6
ICA (Enterprise survey data) - Egypt 60 50 40 30 20 10 Data must be disaggregated by sex 0 Cost of financing women Access to finance men Legal system & conflict resolution Source: Egypt ICA 2004 7
Example: Access to Bank Finance Source: Doing Business database, World Bank (2004a), WEF (2004). 8
Case Study: Access to Finance in Kenya Women s Entrepreneurship Disparity in Resources Land ownership 1% Share of SMEs 48% Comm. Bank Repayment Rate 70% Kenya Women's Finance Trust repayment rates 98% 0% 20% 40% 60% 80% 100% Source: Ellis (2004) in Doing Business 2005. 9
Access to Finance: USA vs. Kenya USA Kenya Women-owned SMEs 48% 48% Sector Formal Informal (Jua Kali) Measured contribution to economic growth/job creation Employ 19.1 million people and generate US$2.46 trillion in annual sales Estimated 40% of total MSME employment. Access to formal financing Yes No (microfinance) Forms of formal financing Full range of financial instruments Collateral based lending Land ownership Yes No (1% individual; 5-6% joint) Legislation ECOA CRA AWBO Reservation Article 13 of CEDAW 10
Growth Unleashed - US WOB ( 97-04) Black women businesses at 4x growth rate Business growth Employment growth Revenues 20% 17% 25% 24% 40% 39% 15% 10% 5% 0% Women- and equallyowned firms 9% All privately-held firms 20% 15% 10% 5% 0% Women- and equallyowned firms 12% All privately-held firms 38% 36% 34% 32% 30% Women- and equallyowned firms 34% All privately-held firms 10.6 million firms (48%) at least 50% owned by women... 10.6 million firms (48%) at least 50% owned by women... and generate $2.46 trillion in annual sales. Source: US National Women s Business Council, 2004 11
Tri-Partite Model on Women s Access to Finance Legal /Political Commitment Financial Institutions Credit registry Land ownership Legislation, e.g. Equal Credit Opportunity Act (US) Encouragement from WBG Innovative products/services adapted (lines of credit) Cultural change for gender sensitive delivery. More women in business creating jobs and growth Teaching Women Entrepreneurs What Financial Institutions Need Financials Sound Business Plan 12
Gender and PSD in Africa Help leverage SME potential e.g. capacity building, training, backward linkages supply chain development, trade linkages 13 To advance the gender/psd agenda in Africa: Diagnostic Solution Design Implementation Sex disaggregated data of enterprise surveys enables gender analysis of PSD issues Engage women in public-private dialogue e.g. Doing Business, Investor Councils Address gender issues and PSD e.g. labor laws, land reform issues, new products eg leasing/factoring
Women s entrepreneurship, the obstacles women face and the potential they offer to create both wealth and well-being are a worldwide phenomenon. Margaret Snyder, Founder UNIFEM 14