MANILA, Philippines - Financial inclusion and access to formal credit are essential in bridging the gender gap and empowering women entrepreneurs, according to industry experts.
In the Designing Solutions for Closing the Gender Gap in Leadership workshop during the World Economic Forum (WEF) for East Asia, private and public sector officials said educating women on financial management will also improve the chances of small and medium enterprises (SMEs) to thrive in communities.
“In terms of structural issue, which is one of the areas we did a lot of thinking and research, women have no access to formal bank accounts and financial services,†said Shamina Singh executive director of the MasterCard Center for Inclusive Growth.
Singh said that of the 2.5 billion people worldwide with no access to financial services, 60 percent are women.
Omar Lodhi, partner of private equity fund The Abraaj Group, said there is an endemic problem in funding SMEs but women in particular have a harder time securing fresh capital from the formal banking sector.
Banks shy away from women-owned SMEs that tend to be susceptible to failure and are lacking in economies of scale, Lodhi said, adding that empowering women will result in $90 billion worth of additional output in the region.
Lodhi said around 40 percent of SMEs in East Asia are led by women. Specifically, 70 percent of Philippine SMEs are owned by women, higher than the 50 percent in Vietnam and 40 percent in Indonesia.
For the Philippines, financial inclusiveness can be aided by digitizing cash transfers and educating women entrepreneurs, officials said.
“It is digitizing the social subsidy programs to allow formal bank accounts and formal financial access to women,†Singh said.
To date, the Philippines implements a conditional cash transfer program. However, banks are not present in far-flung areas where some cash transfer beneficiaries reside, said Presidential Adviser on the Peace Process Teresita Quintos-Deles.
Aside from handing out cash to families, Singh said beneficiaries should attend weekly session on financial literacy.
“Whatever the course (women students) are taking, they should be able to understand financial inclusion concepts,†Quintos-Deles said.
“For more support, we also need good mentorship in the corporate level,†said Yoshito Hori, president of business school chain Globis University.
Crafting new strategies to scale up the leadership of women in business, government and civil society as part of tapping the region’s talent more efficiently is part of the goals of WEF, which was hosted by the Philippines for the first time.