Currently, women own about 14,300 small and medium enterprises in Nepal, accounting for two percent of GDP and employing over 200,000 workers, an IFC statement says, suggesting that meeting their current credit requirements of $106 million can increase their contribution to the economy. [break]
According to the report titled ´Small and Medium Enterprise gender baseline estimation for IFC´s financial market portfolio in Nepal´, women are more entrepreneurial than men, generating 6 percent higher profits on annual sales despite operating businesses of small sizes.
“…access to finance remains their biggest hindrance because banks prefer fixed assets as collateral that few women entrepreneurs possess,” the IFC statement says.
“They also need improved access to markets and training for skill development.”
The study suggests credit rating and collateral registry should guide financial institutions, helping them tap into the $2.5 billion lending opportunity for small businesses.
“It is important that banks consider the requirements of women entrepreneurs an intrinsic part of their small and medium enterprise strategy,” said Thelma Tajirian, an IFC program manager for Access to Finance. “One solution is that banks allow use of movable assets as collateral when assessing their clients´ financial risks.”
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