In the wake of recent events in the Middle East and North Africa, the need for jobs cannot be overemphasized. Entrepreneurship is vital to job creation and economic development and given the appropriate support, entrepreneurs can drive the region's fiscal recovery. But the economy will not reach its full potential unless women business owners are a major part of this process. They are increasingly becoming recognized for running innovative businesses, generating employment and contributing to their local economies. So then why has this region ignored the potential latent in its women business owners? Globally, female participation as entrepreneurs and employees is critical to economic development, with women-owned firms representing over 38 percent of registered small businesses worldwide. A United Nations report concluded that economic development is closely related to the advancement of women. In nations where women have advanced, economic growth has usually been steady. By contrast, in countries where women have been restricted, the economy is stagnant. The share of women entrepreneurs in the Middle East and North Africa (MENA) is 18 percent, among the lowest in the world. Despite this, female business owners in the region have shown they have the potential for growth, the ability to generate employment and the skills to contribute to economic development. In MENA, women entrepreneurs defy the stereotype that they run small, home-based enterprises; 30 percent of women-owned firms in the region are large businesses employing more than 250 workers. However, many women have trouble accessing bank loans and other financing. A large number are long-term bank customers whose financial needs have been ignored and their business growth stunted by a lack of access to financial services and products. Research has identified significant dissatisfaction with how most commercial banks treat women entrepreneurs, with issues identified ranging from under-qualified business bankers to poorly-tailored financial products. However, with the appropriate support women entrepreneurs have the potential to become engines of economic growth. The recent regional changes present an enormous opportunity for financial institutions to spearhead the economic recovery by supporting entrepreneurship and at the same time bolster their bottom lines. Unlike their male counterparts, most women entrepreneurs are not burdened with debt and the competition for their business is minimal. Preliminary research also suggests that women adopt more conservative stances towards investment decisions than men, potentially making them better credit risks. Banks that have supported this segment focused on the core business needs of women entrepreneurs just as they would for any other business segment. They have recognized women as a distinct market opportunity, and have sought to understand their particular needs. Those include convenience and simplified banking relationships as they juggle their roles as business owners and primary caregivers. Successful banks have been able to develop and promote the use of financial products and services, such as leasing, to address the lack of collateral issue faced by most women entrepreneurs. But capturing this segment of the market takes innovation. One good example of that comes from Standard Chartered Bank which has created the online Women in Business Resource Center. This provides financial management and other business skills for women entrepreneurs to start and grow their business. The bank recently launched an Arabic version of the site. This is particularly effective as a lack of adequate financial management skills represents a key constraint for many female entrepreneurs in MENA. Banks that tailor services to female entrepreneurs can trigger a ripple effect across the economy. Lenders see their bottom lines grow, other banks follow suit and suddenly, more women are participating in the market. The result of this targeted focus on female entrepreneurs has been that as the banks see the benefit of providing targeted services to a specific segment of entrepreneurs; they extend the same services to all entrepreneurs thereby stimulating overall business activity. The IFC has played a supporting role in that process, partnering with banks in several regions to launch the Women in Business program, which offers financial and advisory services to female entrepreneurs. The next few months will be a telling time for the economies of the Middle East and North Africa. As the region navigates its way through a myriad of changes, there is a clear realization that no segment of the economy can afford to be left behind. While women seek to contribute to the political agenda, their contribution to economic recovery and growth is equally important for lasting change. Uloma Ike is a senior operations officer specializing in women's access to finance at the International Finance Corporation. Andrew McCartney is a senior banking specialist who focuses on small- and medium-sized enterprises at the IFC. This article was written exclusively for Daily News Egypt. The findings, interpretations and conclusions expressed in this article are the authors' own and do not necessarily reflect the views of IFC, a member of the World Bank Group.
