Empowering women entrepreneurs through an SME development program in Lao PDR

Gender Equity CoP Asian Development Bank Thursday, 24 January 2013

Presented by: Mohd Sani Ismail Financial Sector Economist Public Management, Finance & Trade Division (SEPF) Southeast Asia Department Asian Development Bank

Background of the program

Second Private Sector and Small & Medium-Sized Enterprises Development Program (PSME2), subprogram 1
Primary objective: to promote and contribute to the development of the private sector and SMEs of Lao PDR

IMPACT expansion of the formal SME sector OUTCOME improved business environment for SMEs OUTPUTS
i) Implementation of SME policy, including improving SME access to services ii) Promoting regulatory efficiency iii) Strengthening trade policies to support SME growth

PMSE2: Empowerment of women entrepreneurs

Supply side intervention
Output 1: Implementation of SME Enterprises Policy, including Improving Small and Medium-Sized Enterprises Access to Services

Output 2: Promoting Regulatory Efficiency

SME policy (drafting of the national SME Development Plan for 2011-2015 which includes activities to promote empowerment of female entrepreneurs, reporting on disaggregated data by gender, region and size through the ERO) Regulatory impact assessment (consultations on RIA measures are with women stakeholder groups, reduction of high-cost regulation benefits women as they are concentrated in the micro and small enterprise sector)

PMSE2: Empowerment of women entrepreneurs

Stimulating demand

Output 3: Strengthening trade policies to support small and medium-sized enterprises growth

Trade policy (consult women owned enterprises for trade negotiations and information dissemination through encouraged participation in workshops)

PMSE2: Empowerment of women entrepreneurs

Importance of measuring indicators: enterprise registry offices (EROs)
Introduction of new registration system in 6 pilot provinces
simplified registration and cut business compliance costs by 35%

National rollout to remaining 10 provincial EROs

allows SMEs to register and obtain certification at the provincial level

Upgrading of hardware & software and training on implementing registration procedures

PMSE2: Empowerment of women entrepreneurs

Importance of measuring indicators: enterprise registry offices (EROs)
RESULTS 2010: May 2011: 70, 000 enterprises registered 54.8% of newly registered enterprises owned by women 2009: 43.9% of newly registered enterprises owned by women Increased transparency through first ever published book on enterprise regulation (includes disaggregate d data by gender, region and size)

late 2008: 35, 000 enterprises registered

PMSE2: Empowerment of women entrepreneurs

Incorporating gender equity into ADB program loans

PMSE2: Empowerment of women entrepreneurs

Incorporating gender equity into ADB program loans

PMSE2: Empowerment of women entrepreneurs

Incorporating gender equity into ADB program loans

Gender Analysis Report

Main problems facing female entrepreneurs in Lao: 1. Access to finance: lack of collateral, lack of business knowledge and skills 2. Access to technology: uses less machinery and technology than men 3. Access to training: not eligible for subsidized Business Development Support Services without tax registration, mobility restrictions

Status: Lao PDR is implementing reforms which will create a level playing field for the poor who are wanting to go into business, but needs to encourage the growth of female entrepreneurs Developments: i. SME Promotion and Development Office to implement a survey which identifies what financial products & services are needed by female-owned SMEs and what banks will accept as collateral ii. vocational institutes to help women with developing business skills

PMSE2: Empowerment of women entrepreneurs

Thank you!