No SDG untouched by women-owned social enterprisesSep 15, 2017
With the support of Canada, UNDP Indonesia is assessing the landscape, challenges and opportunities for women’s social enterprises in agriculture, fisheries and forestry in Indonesia. The preliminary results found there are vast challenges facing women-led social enterprises in these sectors, despite their potential impact on advancing the Sustainable Development Goals.
In Indonesia, small to medium enterprises (SMEs) make up 57% of the GDP. About one-third of medium-sized enterprises are owned by women and this number is increasing by 8% annually while the number of SMEs owned by men is dropping. Women-led SMEs are an important untapped opportunity that can support economic growth and innovation. As such, women-led SMEs are a strategic partner for the achievement of the SDGs.
While presenting her findings, Gender and Finance Researcher, Portia Hunt argued the case for investing in women-owned social enterprises is three-fold. Women typically borrow more conservatively, there a better repayment rates overall among women and yet there is an unmet demand for credit from women-owned growth-oriented enterprises, due to a range of challenges facing them. Women-led enterprises often lack access to finance, including credit, formal savings and insurance from traditional banks, however innovative and alternative forms of funding like angel investing and social finance is filling the gap. Most lending is focused on poverty reduction, which does not fit growth-oriented enterprises in the ‘middle bracket’ of the SME sector. "Among the women I’ve spoken to, they have expressed the need for financial skills - bookkeeping and formal roles for family business,” said Portia.
Women also tend to put forward their husband or brother’s names when applying for credit, due to fear they would be declined if they were to use their own name. Hunt noted that these challenges could be addressed with better data and indicators supporting women using big data technology already available.“There is a profound lack of sex-disaggregated data in women-led SMEs. But we could leverage technology already in use for example eFishery, to improve knowledge.” Women would also benefit from business skills, mentorship and technical assistance to help expand their enterprises.
Following the research presentation, representatives of social enterprises, angel investment, Girls in Tech and The World Bank discussed how the business environment can be more conducive to the long-term growth of women-led social enterprises. One key question asked whether banks really biased or is it just a perception? It’s not enough to gender neutral. Banks need to do further outreach to women and women also need more support to build business owners’ confidence and capacity to access finance from banks.
This research and ongoing activities is part of UNDP’s work in strengthening the role of social finance in funding development in partnership with Canada and Angel Investment Network (ANGIN). This work explores new sources of financing for the SDGs. UNDP Indonesia has also launched the SDG Impact Fund, Nagara, in partnership with ANGIN and Challenger 88. The final report assessing challenges and opportunities for women-led social enterprises will be released at the end of September 2017.