The credit requirement
for women entrepreneurs at present stands at $106 million, according to a study
released by International Finance Corporation (IFC), a member of the World Bank
Group.
Currently, women own
about 14,300 small and medium enterprises in the country, accounting for two
per cent of gross domestic product (GDP), and employing over 200,000 workers,
said the study that also suggested meeting women entrepreneurs' current credit
requirements of $106 million to increase their contribution to the economy.
Women entrepreneurs
could play a significant role in economic growth, if financial institutions
address their financing needs with suitable offerings, it said. The study added
that women are more entrepreneurial than men, generating six per cent higher
profits on annual sales even though they operate smaller businesses, according
to small and medium enterprise gender baseline estimation for IFC’s financial
market portfolio in Nepal.
Access to financing
remains their biggest hindrance because banks prefer fixed assets as collateral
that few women entrepreneurs possess. Other operational needs include improved
access to markets and training for skill development.
"The study is a
much-needed initiative that provides banks and financial institutions with
valid data to help design banking products and services, easing access to
finance for women entrepreneurs," said general manager of Clean Energy
Development Bank Barsha Shrestha. "We are working to strengthen our
product portfolio to support their businesses."
The study also suggested
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 IFC programme manager
for Access to Finance Thelma Tajirian. "One solution is that banks allow
use of movable assets as collateral when assessing their clients’ financial
risks."
The SouthAsia Enterprise
Development Facility, managed by IFC, in partnership with the British
government and the Norwegian Agency for Development Cooperation, carried out
the study.
IFC’s Access to Finance
programme facilitates growth of small and medium enterprises in Nepal, helping
enhance their financing options through a supportive financial infrastructure,
including institutions, financial product development, and improved payment
regulations.
IFC, a member of the
World Bank Group, is the largest global development institution focused
exclusively on the private sector. It helps developing countries achieve
sustainable growth by financing investment, mobilising capital in international
financial markets and providing advisory services to businesses and
governments.
In fiscal year
2011-12, its investments reached an all-time high of more than $20 billion,
leveraging the power of the private sector to create jobs, spark innovation,
and tackle the world’s most pressing development challenges.
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