Gender, entrepreneurship and access to finance © 2009 The World Bank Group, UNECE, All Rights reserved United Nations Economic Commission for Europe Developing Gender Statistics

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

What kind of resources? Tangible: Land, Financial Capital Intangible: Human Capital

Why it is important? Universal Financial Inclusion:  Economical Growth  Poverty Reduction  Expanding business Economic and Financial Resources Gender equality and the empowerment of women

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

Access to what? A. Financial Institutions  Formal  banks/near banks- foreign credit union  other formal- mutual or pension fund  Informal  money lenders,pawshops, NGOs  non-intermediated- friends, family B. Financial Services  Transactions/payments  Savings  Credits  Insurance  Pensions

Legal access is not an issue in UNECE region:  Women's Access to land  Women's Access to Property Other than Land  Women's access to bank loans …but more subtle forms of gender inequality Who has access to finance and who does not?

Women's entrepreneurship general profile ECONOMIC SECTOR: Service sector  output hard to quantify, no physical assets SIZE: Micro, small or medium sized firms  profit

Women in top management in UNECE region Source: "Enterprise Surveys, The World Bank Group“, 2008, 2009

Are women discriminated in credit markets? Lower women access to formal finance compared to men  In the U.S. only 4.2 percent of $19 billion in venture capital went to women-owned businesses in  In the UK, a recent study shows that women enter businesses with about a third of the starting capital used by men (Carter and Shaw, 2006).  In ECA region, female-managed firms are 5.4% percent less likely to get a loan and are charged 0.6 percent higher interest rate than men (Muravyev et.al. 2007)

Why? Barriers for Financial Access and for Expanding Women's Businesses DEMAND-SIDE BARRIERS  Male signature for opening an account and for credit  Borrowers Property Rights: Access to Collateral  Women lack access to networks which are largely male dominated  Less financial literacy  Domestic responsibilities  Limits on women mobility SUPPLY-SIDE BARRIERS  Financial institutions lack technical know how to design products that suit the needs of women clients  The strong link between legal framework for secured transactions and secured registry  Government and financial sector policies-unintended effects  Small number of women in the board

Women Entrepreneurs and Firm Size Source: "Enterprise Surveys, The World Bank Group“, 2008, 2009

Microfinace  Target mostly women  Important role in women empowerment  Number of women have increased over the last decade A tool for the discriminated groups

Is the welfare impact higher when more women are served? Impact on children’s health, more salient in the case in of women borrowers in comparison with men borrowers.

Why women’s access to finance is important? Wealth Creation Contingency Planning Credit Access Savings & Investments based on household’s level of financial literacy and risk perception Consumption Loans Housing Loans Emergency Loans Business livelihood Insurable Contingencies Buffer Savings Retirement Savings Source: Raghuram Rajan Committee on Financial Sector Reform, India, 2008

Still…why women’s access to finance is important? EQUALITY BETWEEN MEN AND WOMEN ECONOMIC PROGRESS

 Commercial Bank Partnerships with MFIs to increase access for women  Mainstreaming Gender in formal financial institutions  Specialized women’s banks  Integrated credit registries  Mentoring, training in non traditional businesses  Increase financial literacy and awareness  Have more female voices at the decision-making table  Sex disaggregated data Increasing women’s access to finance

The value-added of statistics Need for accurate, comparable and reliable sex-disaggregated data

Why is data collection on access to finance difficult?  Supply side Regulators Financial institutions  Demand side

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

(1) Gender and entrepreneurship: Enterprise Survey, The World Bank Group Eastern Europe & Central Asia Central America South Asia East Asia & Pacific Middle East & North Africa Latin America & Caribbean Sub-Saharan Africa Over 100,000 firms in 125 countries Main focus: emerging economies but also a few developed economies for comparative purposes % OF FIRMS WITH FEMALE PARTICPATION IN OWNERSHIP % OF FIRMS WITH FEMALE TOP MANAGER …by FIRM SIZE … by SECTOR … by OWNERSHIP

 Women's access to land  Women's access to bank loans  Women's access to property other than land  Mean age of marriage (women, in years) (2)The OECD Gender, Institutions and Development Data Base

(3)Africa Gender and Development Index (AGDI)  Ownership of urban plots/houses and land;  Access to credit;  Freedom to dispose of own income;  Management

(4) Reserve Bank of India A central bank’s initiative to track sex-disaggregated data

National level (Governments)  improve the legislative frame  monitor the impact of policies  support financial institutions International community  promote training for financial institutions  create awareness of women's needs and of the benefits of the lender  collect sex-disaggregated data in their field UNCTAD  gender dimension in all areas of work  reassess the capability of their programs to combat gender inequalities UN Recommendations for Gender Mainstreaming and Data Collection

Concept & Production: United Nations Economic Commission for Europe – Statistical Division Edited by: United Nations Economic Commission for Europe - Statistics Division Sources: Sushma Narain, “Gender and Access to Finance”, World Bank Report (working paper) ”World Survey on the Role of Women in Development”, Women's Control over Economic Resources and Acess to Financial Resources, including Microfinance, United Nations, New York, 2009 "Enterprise Surveys, The World Bank Group“, 2008, 2009 “The Gender, Institutions and Development Database” (GID-DB),OECD, 2009 Photo Credits: © 2009 The World Bank Group, UNECE, All Rights reserved United Nations Economic Commission for Europe