Event Report: Building Back Better by Empowering Women Entrepreneurs

The following is an English translation of an original Japanese article issued in November 2021. 

Women entrepreneurs are reportedly finding it more difficult to access marketplaces and funding as a result of the Covid-19 pandemic. What kind of help does "Building Back Better" require from entrepreneur support organizations and investors for women entrepreneurs? 
  
Ms. Ayaka Matsuno, Director of the Gender Investment and Innovation Program at the Sasakawa Peace Foundation, participated as a panelist in the "Building Back Better by Empowering Women Entrepreneurs" session at The Southeast Asia Summit organized by AVPN on October 26 and 27, 2021. 

 

Ms. Priya Thachadi, representative of Villgro (an intermediary support organization in the Philippines) moderated this session. The panelists were, Ms. Wendy Cheong; Regional Head of Asia Pacific at Moody's Investors Service, Ms. Ralitsa Rizvanolli; Investment Director at EMIIF Sarona Asset Management, Mr. Tom Schmittzehe; Co-Founder of Moonshot Ventures, and  Ms. Ayaka Matsuno. 
  
Ms. Thachadi began by welcoming four champions of female entrepreneurship to the session and then asked each panelist how they help women entrepreneurs. Ms. Matsuno noted that there are two types of support programs for women entrepreneurs provided by the SPF: the Asian Women Impact Fund (AWIF), which was established in 2017, and technical assistance, which is implemented in collaboration with local and regional partner organizations, including  entrepreneur support organizations. 

The first question Ms. Thachadi posed to the panelists was about the challenges faced by women entrepreneurs in Southeast Asia. 
  
In response, Ms. Cheong stated that unlike men, women entrepreneurs face greater initial challenges to starting businesses. For example, women often lack entrepreneurial and commercial experience and networks, and they are expected to manage their household and business in a limited amount of time. Furthermore, Ms. Cheong also identified the legal structure around women as a problem, citing different property rights for men and women in Laos and Indonesia, and claiming that this social context makes it difficult for women entrepreneurs to establish sustainable businesses. 
 
Ms. Rizvanolli went on to say that while EMIIF Sarona Asset Management has been investing for over a decade, the number of female fund managers remains low. The fact that the company has become more risk averse than ever before, especially now that the Covid-19 pandemic has restricted business travel and other activities, making it more difficult to conduct due diligence. This is considered as a barrier for diversifying the company's investment portfolio, for example by investing in women entrepreneurs. 
 
Citing the problem of the so-called "missing middle," Ms. Matsuno noted that small and growing businesses (SGBs), in which many women entrepreneurs are engaged in, are too large to qualify for microfinance, but too small to be a target for venture capitalists (VCs) and other private equity investments. This then creates a gap in the investment targets between the demand and supply of funds. She also mentioned about the Beacon Fund that AWIF currently invests in. The fund was established to tackle this issue and solve the ‘missing middle’ in the available funding for women entrepreneurs. Additionally, Ms. Matsuno also highlighted unconscious bias against women as a problem, and introduced the GLIA toolkit, a training kit with ideas and methods to help investors and technical support providers overcome unconscious bias. 
 
Finally, citing the digital divide as a problem, Mr. Schmittzehe stated that as a result of the Covid crisis, many enterprises are migrating to the digital economy. However, the informal market, where many women entrepreneurs operate, makes that move extremely challenging. 

Ms. Thachadi then asked Ms. Cheong what Moody's Investors Service is doing to address these challenges in the quest of Building Back Better. Ms. Cheong said that Moody's Investors Service provides financial knowledge, business skills, and tools to women entrepreneurs, using the "We shape together" program launched in 2018 and credit training in collaboration with AVPN. 
 
Ms. Thachadi also asked Ms. Matsuno and Ms. Rizvanolli about the best investment strategy for reducing the gender financing gap, which appears to have been exacerbated by the pandemic's disproportionate impact on women entrepreneurs. 
  
Ms. Rizvanolli noted that all stakeholders have a role to play as part of the ecosystem. For example, the Australian government's Investing in Women program and innovative investment techniques such as blended finance are very effective in helping the private sector make investment decisions. She also pointed out that the NGOs, governments, and private groups like EMIIF Sarona Asset Management should form a consortium to develop a gender lens impact strategy and harmonize baselines and indicators around gender. 
 
In response, Ms. Matsuno emphasized that for gender lens investing, both sustainable returns and social impact are vital, but it is particularly important to know how to measure and accomplish social impact. In addition to aligning Impact Measurement and Management (IMM), she said there is a need to further increase interest in gender investment and motivate more people to do so. Ms. Matsuno introduced the Gender Lens Investment (GLI) Fellowship Program, which SPF is implementing with AVPN to train the next generation of gender-lens investors. 
 
Finally, Ms. Thachadi asked Mr. Schmittzehe what interventions are required to secure adequate funds for women entrepreneurs in Indonesia. Mr. Schmittzehe mentioned the potential of blended finance scheme to lower barriers for private investors. He also added that impact investment does not yet require accountability, and that we need to develop systems to monitor and incentivize impact. 

Concluding the session, Ms. Thachadi asked the panelists what collaboration is needed to create a supportive environment for women and their businesses. 
  
Ms. Cheong began by introducing the recent research published by Moody's Investors Service. She said that many people need to know the current status of women entrepreneurs, and that there is a need for a forum where people with different perspectives can collaborate, as was the case in this session. Mr. Schmittzehe also stated that horizontal connections are especially difficult to establish in the field of impact investing, and that he would like to see greater coordination and collaboration within the ecosystem to promote women entrepreneurs. 
  
Lastly, Ms. Thachadi emphasized that supporting women entrepreneurs involves more than developing checklists and ticking boxes; it also entails collaborating with other partners to take concrete, effective actions.