Women are more entrepreneurial than men: IFC
The International Finance Corporation (IFC), a member of the World Bank (WB) Group, has found that women entrepreneurs could play a more significant role in Nepal’s economic growth if financial institutions address their financing needs with suitable offerings.
According to the report, women are more entrepreneurial than men, generating 6 percent higher profits on annual sales even though they operate smaller businesses.
Currently, women own about 14,300 small and medium enterprises in Nepal, accounting for 2 percent of GDP and employing over 200,000 workers, according to an IFC report released on Wednesday.
The study suggests that meeting their current credit requirements of $106 million can increase their contribution to the economy.
“The study is a much-needed initiative that provides banks and financial institutions with valid data to help design banking products and services, easing access to finance for women entrepreneurs,” the Corporation release quoted Barsha Shrestha, General Manager of Clean Energy Development Bank as saying.
“We are working to strengthen our product portfolio to support their businesses.” the release added Shrestha as saying.
“Access to financing remains their biggest hindrance because banks prefer fixed assets as collateral that few women entrepreneurs possess. Other operational needs include improved access to markets and training for skill development.” reads the statement.
The study suggests credit rating and collateral registry should guide financial institutions, helping them tap into the $2.5 billion lending opportunity for small businesses.
“It is important that banks consider the requirements of women entrepreneurs an intrinsic part of their Small and Medium Enterprise strategy,” said Thelma Tajirian, IFC Program Manager for Access to Finance. “One solution is that banks allow use of movable assets as collateral when assessing their clients’ financial risks.”
The South Asia Enterprise Development Facility, managed by IFC, in partnership with UK and the Norwegian Agency for Development Cooperation, carried out the study. nepalnews.com