Economic Opportunities for Women in the East Asia and Pacific Region
While these constraints limit entrepreneurship among both men and women in the region, evidence suggests that they disproportionately affect women. In Indonesia, for example, one study reveals that just over one out of three women have problems getting loans, compared with just one out of four men (IFC 2006a). Moreover, Indonesian women make up roughly the same the proportion of microcredit customers as they have for the past 20 years, suggesting that the situation is not improving (World Bank 2006b). The ADB Country Gender Assessment for China also suggests that women find it harder to get credit except where microcredit institutions specifically target women (ADB 2006a). When they do get these loans, they have higher success rates than men for their activities and for repayments. By 2002, one microcredit lender in China had granted credit to 1,481 laid-off women; their repayment success was 97 percent and business success 100 percent (ADB 2006a). While one lender’s repayment rate is not enough evidence to generalize about the creditworthiness of women entrepreneurs, it does support the case for improving credit information, particularly about women’s credit and repayment behavior with microfinance. Better information may help eliminate, or at least reduce, the greater difficulties women appear to have in getting loans. Understanding which constraints bind most strongly when it comes to women’s access to finance is limited by the fact that most access-tofinance statistics are not sex-disaggregated. However, qualitative and quantitative evidence suggests some common factors. The most significant of these include demand-side constraints stemming from a lack of information for women about the financing options available to them. Other crucial factors are women’s lower financial literacy; widespread persistence of discriminatory local practices (for example, some financial providers’ insistence on husbands’ cosignatures on loan applications, even when not legally required); high financing costs; inflexibility of formal financial institutions toward the needs of small and informal businesses (many of which are female owned), including an emphasis on land as collateral; and women’s time poverty, which makes them less able to negotiate the complex procedures necessary to get loans. First (and echoing the analysis of land rights above), women entrepreneurs are often unaware of their rights or of the credit options available to their businesses. The World Bank’s investment climate assessment for Lao PDR indicates that many entrepreneurs in the country are not well informed about the financial options open to them (World Bank 2007b). More research is needed to determine whether informational deficits are relatively more
Published on May 10, 2010
Published on May 10, 2010
The East Asia and Pacific region has made great progress, relative to other regions, with regard to both economic development and, specifica...