Ponny Lim runs a thriving aquaculture enterprise in Cambodia, growing her business with the support of a United Nations programme that guarantees loans to women entrepreneurs who are beyond microfinance but not yet ready for corporate finance.
Working in a largely male dominated sector, Ponny has used this additional capital to take her products to other markets, and is also now supporting other women in her community to tackle gender bias and run their own businesses.
Ponny’s example reminds us on this International Women’s Day that investing in women is not only a moral imperative to achieving a more just and equal world, but an economic necessity, crucial to fostering sustainable, inclusive and prosperous economies.
In Asia and the Pacific, an estimated $4.5 trillion would be added to the region’s GDP by tackling gender disparities in economic opportunities. Yet, globally, it is estimated that more than 1 billion women either do not use or lack access to the financial system.
This has far-reaching consequences for the well-being of women, not only impeding their ability to pay for household expenses and recover from economic shocks, but also constraining opportunities for women seeking to start and grow their own businesses.
While the role of women’s entrepreneurship in driving economic growth, job creation and innovation is well established, a $300 billion annual gap in financing has been identified for formal women-owned small and medium businesses. An estimated 70 per cent of women-owned MSMEs are either financially underserved or unserved.
Research by the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) on a wide range of indicators related to women’s financial inclusion, asset control and ownership, financial resilience and entrepreneurship reveals a host of challenges faced by women and a resultant gender gap.
Where data is available, the upcoming report “Financial Resilience, Inclusion and Entrepreneurship: Is Asia and the Pacific close to Gender Parity?” shows that in most countries in the region, women have lower levels of bank account ownership, access to credit and access to pensions. Women also experience higher levels of stress related to their financial situation and women-owned MSMEs lack adequate access to financial services.
These gaps result from and contribute to entrenched discriminatory norms and practices that continue to hamper the use of financial services among women. Common obstacles include limited household decision-making power, time poverty and career interruption due to a higher burden of care responsibilities, lower incomes and lower participation in formal employment among women, digital exclusion, transportation barriers, a lack of demand driven financial products and discriminatory lending practices.
Notably, the broader structural challenge of women’s limited asset ownership and control, which is often both the result of financial inclusion and economic success and a prerequisite for access to finance and economic opportunities, is a significant obstacle that must be overcome to achieve women’s meaningful financial inclusion and economic participation in the region.
The fact remains that women are more likely than men to be living in poor households in the Asia-Pacific region, with deep-rooted discriminatory social norms preventing women from realizing their full potential. Women perform more than four times as much unpaid care and domestic work, which is one of the primary reasons why the female labour force participation rate continues to decline, to 44 per cent today from 52 per cent in 1995, and still well below the world average of 47 per cent.
Barriers to women’s integration into the labour market and overrepresentation in less profitable sectors of the economy are closely linked to women’s financial exclusion, which both contributes to and is perpetuated by women’s concentration in the informal sector and precarious forms of employment, without the assurance of social protection.
Yet financial inclusion alone will not automatically reduce poverty or promote economic empowerment or financial resilience, nor will it eliminate structural inequalities faced by women. However, it is a vital tool which can contribute to enabling women to manage financial risks, attain financial independence, overcome traditional roles assigned to them, increase their incomes, accumulate assets, pursue entrepreneurial aspirations and grow their businesses.
Gender-intentional approaches and active collaboration between policymakers, businesses, financial service providers and civil society stakeholders is key to ensuring that financial inclusion leads to positive outcomes for all women, provide equal rights to asset ownership and inheritance, improve financial resilience and create a conducive environment for women’s entrepreneurship.
Our work at ESCAP includes the Catalyzing Women’s Entrepreneurship Programme, funded by Global Affairs Canada. The project has been building momentum for the movement to create an enabling ecosystem for women entrepreneurs across the region and close the gap in access to finance.
Since 2018, the programme has unlocked more than $89.7 million in capital for women-owned and led businesses, and directly supported more than 176,000 women entrepreneurs.
This type of activity highlights the fact that when women have equal access to economic opportunities, education, healthcare, work and representation in political and economic decision-making processes they can drive strong and inclusive economic growth.
And when we value the unpaid care and domestic work carried out by women and girls and invest in the care economy, we see how the multiplier effects uplift entire communities, improving the health, education and well-being of future generations.
The transformative effect of women’s empowerment is also evident in fostering more resilient and solidarity-based communities and societies. Women’s unique perspectives and leadership are essential in sustainably managing natural resources and crafting effective climate change solutions. Their engagement ensures that development initiatives are equitable and reach those most in need.
The path ahead is clear: In order to accelerate gender equality and women’s empowerment we must end poverty in all its forms. We must strengthen institutions. And we must be intentional at every juncture to provide sufficient financial resources to integrate a wholesome gender perspective throughout the implementation of our policies and programmes.
Cai Cai is Chief of Gender Equality and Social Inclusion Section, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP)
Jonathan Wong is Chief of Innovation, Enterprise and Investment Section, ESCAP
Channe Lindstrøm Oguzhan is Social Affairs Officer, ESCAP
Elena Mayer-Besting is Programme Management Officer, ESCAP
Christina Morrison is Consultant (Catalyzing Women’s Entrepreneurship Programme), ESCAP
Darshni Nagaria is Consultant (Catalyzing Women’s Entrepreneurship Programme), ESCAP
