According to a survey of almost 500 women business owners in Vietnam, lack of entrepreneurial education and training are the two greatest barriers to women succeeding in business. These findings were released on October 10, in a seminar held by the Mekong Private Sector Development Facility (MPDF) of the International Finance Corporation (IFC), in partnership with the Vietnam Women’s Union (VWU) and the Gender-entrepreneurship-Market (GEM) Unit of the IFC.
In the seminar, more than 50 women from business, business associations and representatives from various levels of Government headed presentations on the survey findings, the draft Gender Equality Law, and how gender specific economic policies in other countries have helped women-owned businesses to grow. Feedback from participants was sought on how the needs of women business owners should be incorporated into Vietnam’s Gender Equality Law, which legislators will pass in April 2006.
Ms Trang Nguyen, Manager of IFC-MPDF”s Business Enabling Environments Program, stressed the importance of removing barriers that confront women business owners. “In Vietnam, women represent 52 percent of the workforce, own about 30 percent of business and contribute greatly to the economy. Our survey shows, however that women business owners feel hampered by their lack of knowledge about basic business management, and especially about financial management and how to access international markets. With better access to entrepreneurial education, training and technical assistance, women business owners and would be owners could be an even more significant economic force”.
In the survey, which is first of its kind ever undertaken in Vietnam, women business owners also identified two other major barriers to their success: laws and regulations that hamper overall economic growth, and finding and keeping good employees.
The women business owners who responded to the survey represent a wide range of businesses nationwide. Their firms are also larger and more established than the average women-owned businesses in Vietnam. Most respondents have been in business for five years or more, and nearly 40 percent for ten years or more. Companies had an average of nearly 70 full time and 25 part time employees. Even though more than 60 percent of women’s firms operate out of their homes, 62 percent earned over a VND1 million, and 21 percent earned over VND10 billion.
Another surprising survey finding was that while women business owners are optimistic about Vietnam’s potential for growth in the next two years, they are less optimistic about their own firm’s prospects. According to Ms. Julie Weeks, IFC’s technical consultant in the project, similar surveys elsewhere have uncovered different results. “If business owners are confident their country’s economy will grow, they typically are at least as confident in their own business’ prospects. The fact that Vietnam’s business women are less confident in their firm’s economic prospects compared to those of the national economy indicates that many women business owners in Vietnam feel that a number of barriers are holding them back from achieving their full potential.”
According to Ms. Weeks, access to financing is an important barrier but it is as much a matter of education, as it is access to capital. “The majority of survey respondents say they have enough capital and nearly half currently have bank credit, but very few say they reinvest their earnings in order to grow. This shows that many firms may not be growing as strongly as they could, and they may be undercapitalized.”
Related to this barrier, survey respondents recommended that policy makers make special loan funds or guarantee schemes available to encourage small business growth and development. Survey respondents also recommended establishing a special advisory board on women’s business development issues. A third, and the top ranked recommendation, was to establish gender specific entrepreneurial education and training.
This survey on the needs of women business owners is part of a larger program of technical assistance being jointly being provided by IFC’s MPDF and GEM to incorporate issues of gender into private sector development. In addition to the survey, MPDF and GEM have facilitated a number of in-depth focus group discussions across Vietnam to better understand issues faced by women entrepreneurs, and brought in international experts to provide feedback on the draft law to the drafting committee. The Facility will also publish several papers on women entrepreneurs, and organize information sessions to brief National Assembly members and government officials about the new law. IFC-MPDF has effectively provided similar technical assistance to support the teams drafting Vietnam’s new Common Investment Law and the Unified Enterprise Law.
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