TWEEK: WES Topic of the WEEK
All Said...All Done
Have Women said more or done more as Entrepreneurs in the Twenty-first Century?
Sheena Kaliisa and Roxana Bratu 7 March 2011
“If you want something said, ask a man; if you want something done, ask a woman” the words of Margaret Thatcher, Britain’s Former Prime Minister. One may agree or disagree with this quote, but if women get so much done then why are there still glaring statistics that illustrate women face more obstacles than men? As we celebrate 100 years of women’s emancipation on the 8th of March, fresh data from Delta Economics indicates that in the United Kingdom, female entrepreneurs are suffering more than their male counterparts as a result of the economic downturn, despite their capacity for innovation and the massive growth potential of their businesses. Delta Economics Managing Director, Dr Rebecca Harding argues, “This is not down to the way women run their businesses, but the competitive sectors they choose, such as retail and consumer or business services, which have been particularly badly hit by the downturn.” Harding said: “UK women tend to take a more idealistic attitude to setting up their business than their EU counterparts, and are more likely to set up their companies to make a difference or to follow a dream as opposed to exploiting a market opportunity.” (Click here for full report) So are women making the wrong decisions, in their pursuit of upward mobility on the entrepreneurial ladder? Are women Idealists, Realists or Pragmatists? In the light of International Women’s Day celebrations, the World Entrepreneur Society (WES) brings you a special report of The Tale of Two Countries, ‘Rwanda goes Rural’ by Sheenah Khaliisa and ‘Hard Choices for Romanian Women’ by Roxana Bratu (read further.. click here) .
Rwanda goes Rural by Sheenah Kaliisa
The Rwandan Genocide of 1994 saw about a million people killed and the country left with a battered economy. Given that 70% of the Rwandan population is female, rebuilding the economy would see significant female participation. This rebuilding process began with political measures to strengthen the role of women in the constitution. Currently Rwanda is the first country in the world to have a female dominated parliament. So are the ladies in the halls of power assisting in ensuring the development of women in the country?
The Minister of Gender and Family Promotion, Dr Jeanne d’Arc Mujawamariya announced earlier that this year’s International Women’s Day will be held at village level. The theme of this year is, ‘'Equal access to education, training and science and technology: Pathway to decent work for women'. Mujawamariya argued that this is in line with the country’s focus in terms of promoting education, science and technology. At the national level, the day will be celebrated in Nyaruguru District, with accolades given to women that have succeeded in development activities, hence taking these celebrations into rural areas, therefore influencing the country from the bottom up. The Rwandan government is accelerating the efforts to empower women economically knowing that if they succeed, they will help to lift the entire nation out of poverty. Indeed, a report commissioned by the US Agency for International Development (USAID) found that, ‘women’s NGOs were the most vibrant sector’ of civil society in Rwanda. This is partly owing to certain government initiatives, to women immediately assuming roles as community leaders and financial providers thus meeting the needs of devastated families and communities. The genocide forced women to think of themselves differently and in many cases develop skills they would not otherwise have acquired.
Around the World with Rwandan Women Entrepreneurs
The unique characteristic of Rwandan Women Entrepreneurs is that the majority of them are relatively young. And their businesses are also young; most of the small enterprises owned by women are less than ten years old but have already been successful. Gahaya Links began ten years after the genocide and is currently the largest handicrafts export company in the country, employing thousands of rural women with fifty-two savings cooperatives. The crafts are sold across the globe including Macy’s, one of New York’s flagship stores. It’s not merely the United States that has seen Rwandan female entrepreneurs make inroads; you are also likely to taste Rwandan coffee in many parts of the world. Women are considered leaders in the coffee production one of Rwanda’s key exports, which brings in more than $50 million annually. Women in Rwanda have proven to be the most efficient cultivators and producers of quality coffee in the country, often with more effectiveness than their male counterparts. Male workers in general, resisted innovations introduced by outsiders to help produce better coffee. Women now produce Rwanda’s Bourbon coffee available in the US and UK stores. According to the International Finance Corporation (IFC) report published in October 2008, titled "Voices of Women Entrepreneurs in Rwanda”, Women entrepreneurs are a significant force in Rwanda’s private sector, heading 42 per cent of enterprises. They comprise 58 per cent of enterprises in the informal sector, which accounts for 30 per cent of GDP. The majority are engaged in the retail sector (82 per cent), with the rest focusing on services (16 to 17 per cent) and manufacturing (1 to 2 per cent) sectors. Women entrepreneurs are increasingly able to secure bank loans and purchase or inherit land. Changes to matrimonial, inheritance, and land laws have sought to give women the right to inherit land. Unlike in many neighbouring countries, the new laws override customary law, which often denied women property rights.
All this appears to be good news for female entrepreneurs in Rwanda, but there remain challenges. Women are not fully aware of the legal reforms in the country and the opportunities presented with regard to access to finance, inter-border trade ventures and skills development programmes. Women-owned businesses have expressed the need for management, technical skills and access to training facilities to grow their businesses. Research has also shown that women in Rwanda perceive tax rates as a top business constraint. Although both male and female entrepreneurs highlight taxation as a severe obstacle, it has been found that a burdensome tax system disproportionately harms small businesses and women in particular. An informal survey found that Rwandan women were less likely to register their business for tax purposes; 22.3 per cent of businesses represented by women declared their businesses compared to 27.6 per cent of businesses represented by men. Data also indicates that women’s share of business ownership decreases as the degree of formalization increases. While women own 58 per cent of informal enterprises, they own only 40 per cent of partially formal or formal enterprises. This is a high figure in light of Rwanda’s past when married women needed the consent of their husbands to engage in business. Yet the fact that the women’s share of business ownership decreases as formalization increases suggests that they face particular challenges with the process. However, the government’s emphasis on cooperatives has had a positive impact on women’s enterprise development. Through the formulation of a national policy in 2004 that strengthens women’s participation, Rwanda has seen the flourishing of more than three hundred cooperatives. In contrast to their East African neighbours, many businesswomen are sole owners or have partners in business that do not include their husbands or families. In fact, interviews with women entrepreneurs revealed a marked absence of men in their businesses.
Hard Choices for Romanian Women by Roxana Bratu
Unlike Rwanda where a woman may not need a man to set up her business, the case of Romania suggests otherwise. For example, a Romanian woman, Mrs M (who prefers to remain anonymous) is a woman in her 50s, married with 2 children. Her husband is a director in the electricity company and owns also shares in another business. Due to the economic downturn, Mrs M, who is an engineer, was made redundant as the company she worked for was liquidated. A few years later, Mrs M set up a hotel in a rural area, however this was due to her husband selling his shares in his old company as well as accessing European Union funds as she was unable to acquire these funds herself. This shows that despite woman being highly qualified and using innovative ways to start up a business, it took a man to get the key ingredient i.e. ‘money’. This is due to Romania being a traditional and male dominated society.
Unfriendly policies towards Small-Enterprises (SMEs) have also affected women entrepreneurs. The Coalition of Women’s Business Associations in Romania have recently submitted objections to the Prime Minister’s Cabinet, with reference to a number of unfriendly fiscal and financial measures that the government had adopted which will lead to the closure of around 150,000 SMEs. The Coalition suggested ten alternative measures that should help support the business environment. It was proposed that instead of those measures, which are simply aimed at raising more money now, the government should introduce measures that stimulate work and create more jobs, and allow companies to become stable and even to grow. Such measures include: the elimination of the mandatory income tax, the elimination of the 5 per cent and 10 per cent late penalties that only private companies must pay (as opposed to state-owned companies, which are exempted from paying penalties); increasing the transparency of the laws on public acquisitions; simplifying the procedures for granting European funds to SMEs; introducing VAT deduction procedures for Romanian domiciles; eliminating the tax on reinvested profit.
Head of Household or Head of Business?
Romania’s population is around 21.5 million people, of which 51.3 per cent are women, of which about half live in rural areas. The labour market distribution indicates that one fifth of women are contributing family members, but are not being compensated. However the number of men in the same position is three times less. The biggest proportion of contributing family members is to be found in agriculture (with 63% women). In Romania 30 per cent of the population has agriculture as its main occupation; this is five times more than the EU average. At the same time, the sizes of Romanian family farms are very small, with an average of three hectares per family unit and 2.6 million households with less than 1 hectare. Consequently, the biggest rural population in Europe is working in small un-economical farms; producing only for their own consumption, hence they are unable to grow more to financially underpin business ventures which will help to climb the agricultural entrepreneur ladder.
Women appear to participate less than men at business development services training. The Romanian government is aware that women are under- represented in mainstream business in general and also in leadership positions. Indeed women face many difficulties in business with approximately 30 per cent lacking the experience in financial planning and often needing guidance to set up a business. However, the government has provided initiatives to improve women entrepreneurs and established organisations which assist women in business. In addition to this there are about fifteen microfinance credit institutions; however there is still a tendency by some women to use these institutions as a gateway to leaving the unemployment line rather than set up their businesses.
But the quest for finance is indeed a delicate balancing act for women universally. Universally women who opt for business micro-finance ask themselves, should I pay my debts and then think about starting up my business later? When all is said and done, universally women face the battle to climb the entrepreneurial ladder, but as the tale of two countries indicates, challenges will always exist but it’s up to women to try and overcome those hurdles. Maybe International Women’s Day will help to place focus on helping them even more and release more of their potential. (To join the debate click here)