Check out my article on women entrepreneurs, page 6!

1. 8
Development Returns • Financial Returns
Women entrepreneurs
Accessing market opportunities
Behind the veil
Finance for Muslim women in South Asia
Winning strategies
Lending at INECO Bank
....................................
Ela Bhatt, Founder of SEWA, Role Model for Financial Leadership

2. Colophon
UPsides is a magazine about finance and devel- Letters to the Editor: Upsides is pleased to announce the inclusion of a ‘Letters to the
opment. As the name suggests, it focuses on editor’ section. You may contribute by simply sending an email to editor@upsides.nl.
accomplishments. These can be successes as well We look forward to hearing from you.
as learning opportunities. Whichever they are, they
are all considered in terms of development returns
and financial returns. These stories are not just about
investment. They are about the inspiring people and
organizations behind an investment. They are about
the impact that development banking has on the
client, the business, the economy and society as a
whole. micro- and small-scale entrepreneurs and
other local private sector firms, regional and inter-
national banks and development finance institutions
Column: Give the new financial sector the best possible start!...............
will all be sharing their views and perspectives.
chief editor: Nicholas molodyko
Cover story: Women entrepreneurs: Accessing market opportunities. . . . . . . . . .
The eighth UPsides
editorial board: marilou van Golstein brouwers
Nanno Kleiterp Welcome to the eighth issue of Upsides - a magazine about finance and develop-
Laurie J. spengler ment.
december 2008
editorial committee: Willemijn van beers
1 Region special: Behind the veil ............................... . . . . . . . . . . . .
Upsides is a quarterly publication intended for entrepreneurs and stakeholders in
erik van dijk
developing and emerging markets. While Upsides is an FmO (Netherlands devel-
brigitte stolk
Gera van Wijk
opment Finance company) initiative, it is supported by a widening body of part-
3
Henk Nijland ners and entrepreneurs. 2 Case 1: Invest in modern energy so women can breathe easily..............
Upsides
Arno de Vette
paul Wolff The ‘Up’ reflects an optimistic tone: The private sector is a driving force behind
economic development, from micro and small-scale entrepreneurs to bigger firms.
contributing authors: Nicoline van slingelandt-
Asselbergs, sonya bearden,
Upsides will share how the private sector and its financiers are making a 2 Case 2: MyC: The explosive power of entrepreneurship ....... . . . . . . . . . . . .
difference.
matthijs egelie,
Nico mensink, donna Nails,
manuel sia, brigitte stolk, The ‘side’ reflects stories from many perspectives: development finance institutions
Kirsten c. Weiss and banks, local clients, other international development and business partners 2 Case 3: Realizing dreams through access to finance........................
will be telling the story. The magazine will be based on their cases, experiences,
published learning and projections.
quarterly by: Huddles bv
‘s-Hertogenbosch
The Netherlands
The ‘s’ on the end reflects two types of returns: development returns and financial 30 Sector special: Winning strategies for small business lending at INECO Bank ...
returns. This is our market. it’s not just a story about an investment, but it is about
the impact of that investment on the client, the business, the sector and the
production manager: daphne madec
economy.
Art direction: co de Gooyer 3 Banking special: The potential onus of hard currency debt ................
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For address changes and to subscribe please
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20:20 vision: Mary Houghton ............................................
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3. ....................................................
Column: Nanno Kleiterp
Give the new financial sector
the best possible start!
This issue of UPsides marks the end of hits very close to home. many women we should look at women entrepre-
our second year in publication. We still face a glass ceiling and the number neurs as a huge market.”
take this milestone to honor the accom- of women in top positions is disap-
plishments and challenges, but also pointing. but the call for change grows To enhance female entrepreneurship
the concerns, of entrepreneurial louder. recently, two very public worldwide means changing systems,
women. in doing so, we enter the notices – one from dutch female mindsets and even cultures. What can
highly debated arena of gender leaders and one from dutch male we do as a development bank to
inequality. leaders – were sent to the dutch contribute to this? dr. chen explains in
minister of Finance stating that “now is the cover story that, if we want to
For those of you who think that gender the time for women in the boardroom”. change this situation, we need a better
december 2008
december 2008
issues may only be relevant in the The dutch summonses demand: “Give understanding of the markets women
developing and emerging world, i can the new financial sector the best operate in. At FmO, knowing markets
Financial sector development in Asia, tell you that for dutch people, this issue possible start! A reform of the finan-
cial system that is now glaringly neces-
is our business and we’d like to invite
you to jointly explore the opportunities
Africa, Eastern Europe and Latin America sary should therefore be carried out in this market.
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Upsides
by the best teams of managers and
leaders. diversity will greatly increase UPsides 8 brings to you the experi-
the chances of success.” ences of our clients and other institu-
tions who successfully support women
S
ince 1994 Triodos Bank has contributed its Triodos Renewable Energy for Development Fund This reform should, of course, extend entrepreneurs. solutions they offer
unique expertise as a socially responsible bank focuses on to the expansion of clean energy services in far beyond the boardrooms in the range from providing business devel-
to the micro finance sector in Asia, Africa, developing countries. The fund is a source of finance Netherlands – creating diversity opment services and working with
Eastern Europe and Latin America. for new and existing local financial intermediaries that throughout the whole financial system women’s groups to offering banking
provide financial services to projects and small and worldwide, be it on micro, meso or products specifically designed for
Triodos manages three specialised funds: Triodos- medium enterprises in the clean energy sector. macro level. realizing this diversity, of women.
Doen, Hivos-Triodos Fund and Triodos Fair Share which gender is just one, but a very
Fund. The funds invest in financial institutions Triodos Bank is a fully licensed independent Bank with important aspect, means that we have We at UPsides send our own “public
specialised in the provision of microfinance and branch offices in The Netherlands, Belgium, United to take an extra step to include women notice” to successfully tap into the
sme finance. With the provision of loans and equity Kingdom and Spain. The bank is a pioneering force in in the financial sector. As a develop- female entrepreneur market and
combined with our banking experience we aim to the world of sustainable and transparant banking. ment bank, we at FmO are very leverage female capital. pioneers such
contribute to sustainable economic development in conscious about the fact that women as ela bhatt and the female business
developing countries and Eastern Europe. www.triodos.com are often excluded and that this is a owners highlighted in this issue are
Utrechtseweg 60, Zeist missed opportunity. As highlighted by role models whose vision, commitment
Triodos Sustainable Trade Fund provides trade finance The Netherlands mary Houghton in the 20:20 vision: “it and drive can bring out the entrepre-
to certified organic and Fair Trade producers. 0031 (0)30 693 65 00 feels like there’s more than adequate neurial spirit in each of us.
proof that the market of women who
can be successful entrepreneurs is as Nanno Kleiterp, CEO, FMO
Triodos-Doen is a joint initiative of doen Foundation and Triodos Bank and started
in 1994. Hivos-Triodos Fund is a joint initiative of the Hivos Foundation and Triodos
Bank and also started in 1994. Triodos Fair Share Fund, a closed mutual fund, is open
TLB least as large as the market of men, so
to Dutch private investors and was launched in 2002. Where more than money counts

4. Women
entrepreneurs:
Accessing market opportunities
.............................
Women borrowers are frequently exploring these solutions, we will first
trotted out as the great success story of take a closer look at the statistics and
development finance, particularly in some of the barriers that female entre-
the realm of microcredit. They’re the preneurs face.
“new entrepreneurs” of the developing
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december 2008
world, the backbone of family and What the numbers tell us
culture. While few are willing to Global statistics on female-owned
debate the latter point (how politically businesses are hard to come by. it’s
incorrect!), the former should perhaps estimated that between 25 to 30% of
bear greater scrutiny. Why is it seem- enterprises in the formal sector are
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ingly so easy to find female microbor- owned and operated by women.
rowers, but so difficult to lend to female According to Zouera Youssoufou,
sme owners? if microfinance is so manager of international Finance
successful, one would think that more corporation’s (iFc’s) Gender entrepre-
female borrowers would be able to neurship markets (Gem) unit, empir-
increase their business size into the ical evidence suggests that female
small or medium enterprise realm. sme owners have decidedly less
Entrepreneurial woman at work
access to finance than men. in Uganda,
Yet lenders lament that there just aren’t for example, 39% of registered smes
many female sme owners to go are owned by women, and on average
around. is it true? Or are financial only 9% have access to credit.
institutions falling short in their
outreach efforts? The answer, perhaps, The percentage of informal businesses
is a bit of both, and therein lays some owned by women, however, is signifi-
intriguing solutions. cantly larger than that of formal busi-
ness owners. microfinance institutions
Two general approaches have devel- (mFis) target these informal business
oped to address the difficulties of owners. According to survey data from
finding women with larger businesses the 2007 microfinance mix, mFis the ratio of female to male borrowers This issue is particularly striking in director of the microfinance invest- cant trend yet of them engaging in
to lend to: providing business develop- making group loans with an average falls to 49:51 – admittedly respectable countries with strict conservative reli- ment support Facility for Afghanistan small and medium enterprises,” says
ment services (bds) to help women balance under $200 report over 90% given the proportion of formal female gious traditions. Few know the difficul- (misFA), a leading microfinance ms. Fakiri. “but it is important to
grow their businesses, and/or of these loans go to women. but as loan business owners. Nonetheless, there ties of finding female borrowers as umbrella institution. “Women comprise emphasize here that in the context of
improving the marketing of loans to sizes pass the $1,000 mark for mFis appears to be a trend: as loan sizes well as Katrin Fakiri, founder of the the majority of microfinance clients [in Afghanistan, the fact that more than a
women with larger-sized firms. before solely engaged in “individual” lending, increase, loans to women decrease. Afghan mFi, parwaz, and now Afghanistan] and there is no signifi- quarter-of-a-million Afghan women

5. Women entrepreneurs: Accessing market opportunities
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Women entrepreneurs: Accessing market opportunities
are engaged in micro enterprises is a What’s stopping expansion? Al Amana, a leading moroccan micro- order for a microentrepreneur to grow female business owners, but for interaction with men in the market
monumental feat. even if women are While access to finance is a key finance institution, was the subject of a her business, she must possess both women, both desire and capacity can (reducing access and capacity for
acting merely as a channel for loans, constraint for women entrepreneurs, study in 2005 exploring just this issue. the desire and the capacity to expand. be affected by traditional gender roles growth). Today, interviews with two Al
their participation in microfinance development finance institutions (dFis) While the barriers cited by its female capacity can include financing, time and mores. For example, a society Amana clients exemplify this
programs has improved their socio- can and should tackle other road- clients varied, they boiled down to availability, market (access and may have stigmas against women dynamic.
economic standing.” blocks to growth. so just what are some combination of lack of capacity demand), business acumen, etc. These working (dampening desire to grow
these barriers? and/or lack of desire for growth. in are issues that affect both male and one’s business) or barriers to women’s rabia Helali trained as a seamstress in
saudi Arabia. When she returned to
morocco and married, she fell back
upon what she knew – sewing tradi-
Ela Bhatt, the Gentle Revolutionary tional women’s clothing – and set up a
shop for herself. Two years ago, she
ela bhatt is widely recognized as one of the At every stage we have a mantra that every such trading is presently being done by borrow and when to save. in their business tives. We need on-going organizing across received a loan from Al Amana, and
world’s most remarkable pioneers and entre- asset has to be owned by the woman because seWA economic initiatives. These joint enter- and life cycles there are many financial gaps, issues, across activities, and across locations feels confident that her business will
preneurial forces in grassroots development. those who have assets are better able to prises are developing strong supply chains, so when there is an opportunity which is to increase women’s work visibility, validity grow. Though she still works out of her
Known as the ‘gentle revolutionary’ she has combat poverty. For land that was mort- providing access to larger finance to upscale, going to be productive, like purchasing and voice. Our union wages battles related home, she has a plot of land and only
dedicated her life to improving the lives of gaged and then recovered from the big land- assisting in promoting brand design and working capital, then they have to know to to major issues and our cooperatives take up needs money to build a shop on it, buy
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india’s poorest and most oppressed women holders, i’m very strict that the land should be market strategy, and hiring trained profes- borrow. but they also have to think of the life development programs for women to more machines, and hire additional
workers, with Gandhian thinking as her put under the title of the woman first and if sionals who are committed to the poor. cycle events that are coming, e.g. a daugh- increase their bargaining power, and thus be workers. she’s a woman with vision,
source of guidance. she so chooses, in the name of the husband ter’s wedding, and for that they must save financially self-sufficient. in the case of the skills, and an education. “To succeed,
ela bhatt is the founder of india’s self- second. it’s a struggle because men aren’t What can MFIs do to expand outreach to instead. poor gaining power, numbers are crucial. a woman needs experience, money,
employed Women’s Association (or seWA) ready to give up assets to women. He’ll say, female entrepreneurs with larger We have to be large and fast to bring change and education. What’s stopping me
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and one of the founders of Women’s World ”it will never happen in my lifetime that my businesses? How has SEWA integrated microfinance in favor of the poor. That is a constant chal- now is lack of money,” she says. With
banking. seWA, which began as a trade wife becomes the owner of the land.” but we it is a matter of a holistic approach to banking and subsector development services to help lenge for seWA’s union and cooperatives, both the desire to expand her business
union, continues to organize women workers say that she’s our member and we know her, for the poor, i.e. financial services that include its clients expand? and for other mFis, today. and the capacity (if the loans keep
in addition to providing financial services and so we can take a risk for her and not for not only credit but also savings, insurance, seWA has organized the poor female self- coming), rabia has a shot at achieving
through seWA bank and other integrated you. in fact, later sometimes the men say it’s housing, pensions, and financial literacy employed into trade unions and coopera- her dreams.
services for women. good we put the land in her name, or they counseling. When an organization provides
would have mortgaged it off again! integrated financial services, it increases rabia’s neighbor, Fatma Amar, is also
SEWA Bank reports that about 43% of clients’ savings and assets, as well as a seamstress, and she has her own
borrowers graduate to small loans from How does globalization affect small increasing their capacity to absorb credit. shop thanks to a loan from Al Amana.
petty loans. That number is above the businesses in developing countries? This is particularly important when the state but her vision of the future is cloudier.
average. Why? Globalization results in outsourcing through does not provide social security as an entitle- she says she’d like to improve her
ela bhatt: i’ll tell you what i’ve seen. At the long subcontracting chains and in informal ment to all its citizens. in our case, seWA is business, but doesn’t have a clear
initial stage, most borrowers are burdened low-wage work in developing nations. The an umbrella organization, a trade union, idea how. When asked about the
by debt from money lenders who charge demand for such work is neither steady nor and seWA bank provides financial services barriers women face, she says,
around 10% per day. Other borrowers are reliable. small producers trying to compete to its members. “money is a big constraint, though
landless laborers and marginal farmers with in global markets can’t get fair prices. They now we have mFis like Al Amana to
mortgaged land. Our first aim is to redeem are unorganized and therefore unprotected Can you tell me more about SEWA’s financial help us. Husbands can be a problem
old debts. The next stage is to make them the in global trade. i think it’s necessary to orga- literacy training? though, sometimes preventing women
owners of their own production tools, because nize the working poor across borders, partic- For the women, this is the first time they’ve from being active.” Fortunately for
their pushcarts or spinning wheel or tools are ularly when capital can fly across the border dealt with a formal financial institution. They Fatma, her husband supports her
all rented. Then the third stage comes when so quickly and technology changes so start saving and have good discipline, but business. she admits her greatest
they borrow for working capital. This is where rapidly. We need a forum for women that they need to learn how that money can be limitation is time – she has to balance
the growth comes from. links producers directly to the global market. more productive and particularly when to the demands of her family with those
Ela Bhatt
of her business, and her family must

6. Women entrepreneurs: Accessing market opportunities
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Women entrepreneurs: Accessing market opportunities
take precedence. When speaking entrepreneurial and make that leap [to time, knowledge, or entrepreneurial have neither the interest nor the The left hand path: business 35% of respondents cited financial
with Fatma she leaves the impression smes] is really asking too much,” says skills to even consider ratcheting up capacity, women like rabia, who do development literacy training.
she’s comfortable with her small busi- dr. marty chen, a lecturer in public their business. They’re often just trying have the potential to stretch into the To address the barriers faced by
ness as it is. it brings in an income; policy at Harvard’s Kennedy school of to find two or three activities to do to sme level (or who are already there) women-owned firms, one frequently seWA is a leading women’s organiza-
they’re getting by. Government and the author of Beyond mitigate risk. it’s frequently not even in have little chance of accessing credit. touted solution is training and other tion in india which offers a range of
Credit: A Subsector Approach to their mindset to grow.” How do we support these entrepre- business development services (bds). integrated services to assist its
it’s estimated that only around 10-30% Promoting Women’s Enterprises. “The neurial women and their dreams of in an on-line survey conducted for this borrowers in developing their busi-
of microfinance borrowers “graduate” way they run their business is frequently Not everyone is cut out to be an growth? Two paths have emerged in article, 65% of respondents stated nesses. We use an integrated
to larger sized loans. “To expect all just enough to get cash flow into the entrepreneur. However, when dFi answer to this question. business training was the best way to approach we call ‘beyond microfi-
women [microborrowers] to become household. They often don’t have the loan officers assume that women promote women’s business expansion. nance,’ says ms. reema Nanavaty,
The Tanzanian Association of Women Entrepreneurs (TAWE)
Joyce, Jane, and Magreth numerous other traditional handicraft items. edge offered by TAWe has made a differ- Joyce iriya credits participation in a three- of the networking, sharing of experiences their businesses, with training and mentoring
six years ago, Joyce iriya started a catering “The training on developing a business plan ence to their ability to succeed in business. week Heartland international training and training we receive through TAWe for in business management skills, information
december 2008
december 2008
business out of her home. iriya reflects, and accounting through TAWe has really program in chicago for ten TAWe members our individual businesses.” on current business trends, financial and
“Then i found out that people really liked my helped me improve my business,” says Chicago, USA to Tanzania with “giving me the courage to go back and legal advice and access to financial credit.
cooking and i began to expand.” Today, banura. Her long-term plans include The TAWe story began in 1999 as the vision pursue the University of dar es salaam TAWe’s mission is ‘to build strong women-
10
iriya has 25 employees and last year won opening a cultural center where visitors can of a small group of Tanzanian women in contract”. owned businesses that lift up communities, Economic empowerment 11
the bid for a five-year contract to run the see how the items for sale are made and chicago attending a training program families and hence our national economy as TAWe’s National president, Jovita bubele, is
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Upsides
student canteen for the school of education more young people can be trained to make conducted by Heartland international “Though there are many benefits to being a we believe that a woman is an engine of proud of the group’s accomplishments in
at the University of dar es salaam. the items. assisted by a grant from UsAid. “This group member of TAWe,” magreth Koyi says with development.’ TAWe provides its members encouraging women’s economic empower-
of women decided to go back to Tanzania great passion, “we have all seen the benefits with the opportunity to network and promote ment. “it is inspiring to see the confidence
Two years ago Jane banura owned one magreth Koyi started out with her husband and create a business association. And they women gain by working together and
small souvenir shop selling traditional craft in shinyanga selling office supplies and did just that,” says Karen egerer, president finding out that they share similar problems.
items in mwanza. Now she owns three expanded into fixing and selling used emeritus of Heartland international. “One We have seen our members gain economic
shops selling beaded necklaces and scarves, computers. in 2006, they started a private year later, they were registered as a non- independence and improve the lives of their
traditional woven purses, clothes and secondary school with 200 students and profit organization in Tanzania.” TAWe is families and communities. it proves that
eight teachers. Today, just two years later, one of a very small number of organizations TAWe has a strong role to play as a leader
they have almost doubled enrollment and in Tanzania dedicated to representing indi- in giving women an effective voice in the
have 15 teachers on a small campus with vidual women entrepreneurs in any type of business community.”
two dormitories for each sex to house business.
boarding students, several classroom build- As the world’s nations continue their shift to
ings, a cafeteria, a library and a science TAWe has continued to grow as an organi- a global economy, Heartland international
building with labs for chemistry and zation. Headquartered in mwanza, also believes it is important to support the
biology. Tanzania, they now have seven chapters efforts of hardworking, intelligent women
and over 200 members. With assistance like the members of TAWe to promote the
What do these women have in common? provided by Heartland international, TAWe development of their economy through the
They are all small businesswomen in has provided training to members on a small businesses that make their own lives,
Tanzania and all are members of the Tanza- variety of business topics, including the lives of their family members, and the
nian Association of Women entrepreneurs accounting, marketing, proposal writing, lives of their community better.
(TAWe). All three women say that the moral business plan development, selling skills,
TAWE Day Meeting in Dodoma in September 200 support, networking and business knowl- using computer technology and mentoring. TAWE Chicago Program December 200

7. Women entrepreneurs: Accessing market opportunities
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Women entrepreneurs: Accessing market opportunities
“There’s a lot of training available for
sme owners out there,” says iFc’s ms. “We do need to continue searching for ways for our
Youssoufou. “What we’ve found mFis to design loan products that are ‘female-
lacking is something that addresses
the actual issues women have told us
friendly’, to increase business awareness courses and
they have, e.g. how do you go about to eventually reach a point in the sector where we
developing a relationship with a bank? can assist female clients with market linkages locally
We’ve developed modules to deal with
and internationally.” Katrin Fakiri, director misFA
just this idea of how to develop confi-
dence in dealing with banks.” exam-
ples include training in organizing identifying potential economic activi- donors or government officials they
financials, articulating the business, ties, strengthening the backward and don’t just talk about problems dFis
and selling oneself as a borrower. The forward linkages, and turning them face in the policy and regulatory envi-
program partners with NGOs, busi- into viable enterprises owned and ronment.” iFc’s Gem program recog-
ness schools, and enterprise develop- managed by women themselves”,” nizes this issue, addressing regulatory
ment centers to develop the training says seWA’s ms. Nanavaty. ””We obstacles in addition to access to
and ensure it is self-perpetuating and have several business organizations finance.
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december 2008
sustainable. and over 31,000 producer groups or
collectives, so the production base is The right hand path:
…and other capacity very scattered. The production targeted marketing
12
building issues happens in thousands of villages and business development services repre-
13
The provision of finance is only one hundreds of thousands of homes sent an added cost to dFis, discour-
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element in business growth; there are where women are working, whether aging many from delivering them. it’s
environmental barriers as well. While they’re artisans, weavers, farmers, etc. unrealistic to ask dFis wedded to the
dFis may not be able to address these To be successful, it’s necessary to work “finance only” approach to provide
factors, they should recognize them, on the backwards linkages, sourcing bds to help their microborrowers
as should donors and local govern- of products, and capacity building transform to sme owners. For those
Katrin Fakiri
ments. “i’m a true believer in sub- that’s needed, then work out a form of dFi managers who want to reach into
sector development,” says dr. chen. organization that balances between the sme market and retain a focus on
“if you’re producing honey and there’s decentralized production and yet women, there is, however, an alterna-
no one to help you turn it into a good centralized quality control and tive: targeted marketing to existing
grade of honey and process and label marketing.” seWA’s livelihood finance female sme owners.
it and get the export licensing… these also provides social services to
seWA’s director for economic and producers and the quality of the This sort of integration between are huge barriers. in addition to members, such as social protection or dr. chen says that a better under-
rural Organizing. “Our experience is product and building the market read- finance and bds is also being used to finance there’s really a need to think insurance or day-care for children, standing of the markets women
that microfinance alone does not iness. We’re constantly working on promote lending to female sme through which groups are going to be addressing other barriers to women’s operate in is a critical first step. she
address the issue of poverty.”” pricing, costing, and how to use market owners. iFc provides financing for on- out there to help build all the back- work.” also argues that dFis should do more
intelligence as well as strengthening lending to female entrepreneurs and ward and forward linkages. Where market segmentation work. “i think
“in microfinance you just identify the the supply chain and determining the uses best practices from the Global are these groups concentrated?” The legal environment also has an one of the mindsets dFis have to shift is
credit needs and provide the credit financial services needed.” seWA’s banking Alliance for Women – the impact on business growth. “dFis away from looking at borrowers all as
input. but at seWA, along with credit, capacity building assists its clients to secretariat of which is housed at iFc. seWA takes just this market chain worry a lot about how the regulatory individual clients, when they’re groups
we use organizing to increase our systematically develop their enter- Taking a two-pronged approach, the approach, and now has five different environment affects them,” says doing the same thing and facing
clients’ collective bargaining power. prises, for example in terms of program trains clients’ employees and for-profit companies and two national dr. chen, “but the policy environment similar bottlenecks. dFis can at least
Alongside that we provide capacity accounting, inventory tracking or legal female borrowers after having brands, one for textiles and the second affects their clients too. dFis should be figure out who the clients are and what
building – both technical and mana- compliance with municipal tax analyzed the local women’s market. for agricultural commodities. “We conscious of the constraints faced by they’re doing.”
gerial –” upgrading the skills of codes.” have three decades of experience their clients so when they meet with

8. Women entrepreneurs: Accessing market opportunities
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Women entrepreneurs: Accessing market opportunities
This also includes developing better proposition for the bank that is profit-
approaches in marketing, such as able and promotes a social good.
product development, sales, and iFc’s advisory services and investment
research of the female market. For will only be sustainable if the women’s
example, female “mystery shoppers” banking program is grounded in how
may visit the banks as “clients” and the bank operates, otherwise it won’t
then relate their experiences - often an work.”
eye opening exercise as to how women
are treated by loan officers and other Another lesson: don’t assume. When
staff. “banks need to have gender asked about the female clientele’s
sensitive loan officers and staff,” ms. needs and barriers to growth, survey
Youssoufou continues, “who are not respondents for this article cited widely
patronizing and who ensure that their varying regional issues. What female
marketing material speaks to women, entrepreneurs need in mexico may
with products that address what not be the same in monrovia. The SEWA women’s lending group
women care about. When working women’s market differs across culture
with the banks, we examine what is and is frequently distinct from men’s.
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december 2008
being required from their borrowers For this reason, the standardized dFis are making great strides in Over and over, as loan sizes get larger
and whether the bank is able to approach to financial products may providing women with access to i’ve heard the argument that there
become more flexible when it comes not be appropriate across gender or finance. but in order to truly fire up the simply aren’t enough women in the
to collateral requirements – an area cultural lines. entrepreneurial capacity of the female sme sector to bother with. At the same
1 1
that is a typical stumbling block for half of the world’s population, we need time, i witnessed focus on lending to
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Why women?
Rabia Helali
women entrepreneurs. For example, to go beyond being satisfied with the traders, a market sector women are
women may not be able to produce According to ms. Youssoufou, statistics statistic: “number of women served.” barred from in many developing coun-
property titles or document land argue for women’s role in economic We need to keep questioning the tries. i wondered if perhaps this was
ownership, but cash-flow based development. “We know that women “hows” and “whys” of women’s lazy marketing on the part of dFis.
lending, leasing, or other innovative are typically better than men at repaying lending. Two trails have been blazed Were dFis looking at the wrong
collateral requirements, such as their loans. And research shows that a in the quest to expand women’s busi- sectors? Using the wrong loan offi-
According to misFA’s Katrin Fakiri, a females clients with market linkages jewelry, may be an option for the bank dollar in a woman’s hand has a higher nesses: targeted marketing by dFis cers?”
recent study found that most of locally and internationally.” to better reach out to the women’s impact on the family’s welfare than an and the provision of capacity building
Afghanistan’s female borrowers market.” extra dollar in a man’s hand. When services. Are there more direct paths both the left hand path of bds and the
operate in “women’s” industries, such iFc’s Gem program also works with focusing on the women’s market still waiting to be discovered? right hand path of targeted marketing
as sewing, handicrafts, and small busi- banks on the “4 p’s” of marketing: However, a key lesson learned when segment, the ‘one-size-fits-all’ approach address these and other questions.
nesses run from home. To reach these price, product, place and promotion. marketing to female entrepreneurs seldom applies. it requires women- Kirsten Weiss, senior consultant for One thing however is clear: Female
businesses, ms. Fakiri says, “some of “We partner with our colleagues in falls on the dFi’s organizational side. tailored approaches and sometimes shorebank international, has worked business owners represent too big a
the methods employed by mFis, such financial markets who put in place “banks need to have support for this at even different products for women.” in msme development for many years. market to ignore!
as employing female loan officers and lines of credit with commercial banks the highest level,” says ms. Youssoufou she states: “Admittedly, my personal
promoters and offering business in developing countries with the objec- of iFc. “The ceO needs to be is the women’s market worth it? “if bias is to look at gender through a
development trainings at a smaller tive of getting the money into the committed and understand the busi- you’re interested in having a signifi- marketing lens,” Kirsten writes.
scale have helped increase outreach hands of women entrepreneurs,” says ness case and financial opportunities cant development impact,” continues “Women represent a large demo-
to women. We do need to continue ms. Youssoufou. “We supplant this for the bank. That is the top thing. iFc’s ms. Youssoufou, “which most graphic of business owners, and they
searching for ways for our mFis to with training to the banks - helping Thus, lending to women becomes part dFis are, you have to take women into frequently have distinct wants and
design loan products that are ‘female- them to reach out to the women’s of the bank’s strategic plan itself and is consideration. You can’t be successful needs. it only makes sense for dFis to
friendly,’ to increase business aware- market and to provide training to accepted by staff throughout the insti- without including women. And if you research how best to serve them, and
ness trainings and to eventually reach women entrepreneurs that would help tution. Leveraging the women’s market don’t make a specific effort, it won’t refine their products and delivery
a point in the sector that we can assist make them more bankable.” is not philanthropy – it is a business happen by itself.” systems accordingly.

9. ............................................................ A glimpse into access to finance for Muslim women in South Asia ...........
Behind
the veil
A glimpse into access to finance for
muslim women in south Asia
december 2008
december 2008
Az Zahra Bank, Malaysia women which includes private
“Women are increasingly at the banking in luxurious surroundings -
forefront of our civilization. All over ladies lounges equipped with bloom-
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the world and at every stage, women berg terminals, internet and media
Upsides
Upsides
are at the helm of every crucial role. displays.
She is the nurturer, the administrator,
the leader. She is the decision maker, The remarkable thing about this
the contributor; she adds strengths, campaign is that it is offering services
color and creativity to the world. which didn’t exist a decade ago.
muslim women, albeit affluent
To celebrate and acknowledge this individuals, are able to utilize banking
fact, we are proud to present Az Zahra services in comfort; enjoying services
Privilege Ladies Banking – the first and which are tailored to their beliefs and
only Privilege Ladies Banking in day to day considerations – respect,
Malaysia. Our Az Zahra customers privacy and standards of decorum.
have the privilege of performing their regardless of whether the customer is country, and even from bank to bank. that regulate islamic finance and of caring for the less fortunate with part of Hsbc, announced the launch
financial transactions in an environment muslim, let alone a woman, the prin- in malaysia, where much of the finan- capital markets. However, even in microfinance’s power to provide of a pilot project for islamic microfi-
that is both private and comfortable. ciples which guide this approach are cial sector is shariah-compliant and malaysia, a precedent has not been financial access to the poor. Unlocking nance in rawalpindi, pakistan in
Our dedicated Ladies Relationship universally relevant. sukuk (financial certificates) account set for women heading islamic this potential could be the key to cooperation with islamic relief.
Managers are always on hand to for an estimated 48 per cent of banks. providing financial access to millions Hsbc will provide the shariah advi-
serve your every need.” While Az Zahra bank and other government bonds, the central bank of muslim poor who currently reject sory and product structuring
banks in the Gulf states are offering governor is a woman. The first Islamic Microfinance micro-finance products that do not services and islamic relief will
truly islamic financial services, micro- shariah-compliant fund for women islamic microfinance represents the comply with islamic law. screen beneficiaries and administer
The preceding are excerpts from a finance has also made inroads into was launched in 1998. in many confluence of two rapidly growing the program.
marketing campaign for Az Zahra providing access to finance for muslim respects, malaysian women have set industries: microfinance and islamic islamic microfinance is still in its
bank in malaysia, which offers a women. Thus the state of affairs with the pace for islamic finance in the finance. it has the potential not only infancy, and business models are islamic microfinance is very concen-
customized set of shariah-based regard to financial services for muslim eastern part of the region. For to respond to unmet demand but also just emerging. earlier this year, trated in a few countries, with the top
products and services for muslim women varies greatly from country to example, women head the authorities to combine the islamic social principle Hsbc Amanah, the islamic finance three countries (indonesia, bangla-

10. Behind the veil
A glimpse into access to finance for muslim women in south Asia .................................................................................
A glimpse into access to finance for Muslim women in South Asia
desh, and Afghanistan) accounting muslim-majority countries do not use law. in recent years, some microfi- Islamic Microfinance and mFi clients are women (59 percent on tional microfinance products (65.7
for 80 percent of global outreach. formal financial services. even when nance institutions (mFis) have stepped Women average, but up to 90 percent in percent globally, and 65.4 percent in
Nevertheless, demand for islamic financial services are available, in to service low-income muslim Like conventional microfinance, bangladesh). Overall, the percentage the Arab world).
microfinance products is strong. some people view conventional clients who are demanding products islamic microfinance tends to focus on of female clients using islamic microfi-
A 2008 cGAp publication estimated products as incompatible with the consistent with islamic financial prin- female clients — according to the nance products (59 percent) is
that 72 percent of people living in financial principles set forth in islamic ciples. cGAp survey, a majority of islamic comparable to those using conven-
Islamic Finance
islamic finance has and continues to experi- a product as shariah-compliant, the institu- This resembles some of the rent-to-own deals bank and the borrower receive the proceeds sive interest in microfinance is consistent
ence rapid global growth. According to tion offering the product takes fatawa, or in the American market. in this way, the from an auction based on the current equity. with the islamic prohibition of usury (riba).
Forbes, at least Usd 500 billion in assets religious rulings, from its shariah supervi- lender does not receive a profit, per se. in This method allows for floating rates
around the world are managed in accor- sory board that often consists of three or the same vein, the lender is not allowed to according to current market rates such as microfinance is a key concern for muslim
dance with shariah, or islamic law, and the more religious scholars. Although shariah seek additional profit through fees, such as the bLr (base lending rate), especially in a states and recently islamic banks too. islamic
sector is growing at more than 10% per rulings may vary somewhat across firms for late payments. in order to protect itself dual-banking system such as that in microfinance tools can enhance security of
december 2008
december 2008
year. and countries, institutions such as the islamic against default, the bank asks for strict malaysia. tenure and contribute to the transformation
Fiqh Academy and the Accounting and collateral which is registered to the name of of lives of the poor. As islamic finance
islamic finance, based on the principles Auditing board for islamic Financial institu- the buyer from the start of the transaction. There are several other approaches used in continues to undergo rapid growth and
outlined within the Quran, the holy book of tions (AAOiFi) are helping to bring consis- This arrangement is called murabaha. business deals. islamic banks lend their innovation, it faces a number of challenges
1 1
islam, seeks to further the Quran’s message tency to these rulings. Another approach is eIjara wa eIqtina, money to companies by issuing floating rate as a result. These include achieving consis-
Upsides
Upsides
of social justice. it does so by eliminating which is similar to real-estate leasing. islamic interest loans. The floating rate of interest is tency in recognized shariah authenticity
what the Quran refers to as exploitative islamic finance complies with the principles banks handle loans for vehicles in a similar pegged to the company’s individual rate of across firms and countries, fulfilling the
practices, mainly usury. These transactions outlined in shariah law. These include prohi- way – selling the vehicle at a higher-than- return. This means that the bank’s profit on needs met by conventional products and
might further be referred to as ‘hilal’, as bitions on riba (interest on monetary loans), market price to the debtor and then retaining the loan is equal to a certain percentage of services without blurring the lines between
funds cannot be used directly or indirectly gharrar (preventable ambiguity in contract ownership of the vehicle until the loan is the company’s profits. Once the principal islamic and conventional finance and
for pornography, gambling or pork. essentials such as price), maysir (gambling paid. amount of the loan is repaid, the profit- without compromising competitiveness, and
and pure games of chance), alcohol, pig sharing arrangement is concluded. This securing an adequate supply of scholars
The roots of modern islamic financial institu- products, and pornography. in contrast to An innovative approach applied by some practice is called musharaka. and practitioners well-versed in islamic
tions are often traced back to the 1970s conventional financing, which can rely banks for home loans is called musyaraka finance.
when the first islamic commercial bank and heavily on monetary loans, islamic finance al-mutanaqisa that allows for a floating rate Microfinance, not true Islamic
later the islamic development bank were promotes the trading of real assets and risk- in the form of rent. The bank and borrower banking?
formed. Today, islamic financial services are reward sharing, encourages entrepreneur- form a partnership, both providing capital islamic banks have grown recently in the
being offered by islamic as well as conven- ship, discourages speculative behavior, and at an agreed-upon percentage to purchase muslim world but signify a very small share
Jama Masjid mosque in Delhi, India
tional financial institutions. emphasizes the sanctity of contracts. the property. The partnership then rents out of the global banking system. microfinance
the property to the borrower and charges institutions founded by muslims, notably
Shariah and prohibitions Shariah-compliant mortgages rent. The bank and the borrower will then Grameen bank, use conventional lending
Shariah consists of ibadah, relating to and home loans share proceeds from this rent based on the practices and are popular in some muslim
worship, and muamlat, relating to day to in an islamic mortgage transaction, instead current equity share of the partnership. At nations, especially bangladesh, but are not
day practical matters. commerce, banking, of lending the buyer money to purchase the the same time, the borrower in the partner- considered to offer islamic financing.
and finance are addressed by muamlat. item, a bank might buy the item itself from ship entity also buys the bank’s share of the However, muhammad Yunus, the founder of
the seller, and re-sell it to the buyer at a property in agreed installments until the full Grameen bank and microfinance banking,
What determines whether a product is higher agreed-upon price, while allowing equity is transferred to the borrower and the and other supporters of microfinance, argue
shariah-compliant? by and large, to certify the buyer to pay the bank in installments. partnership ends. if default occurs, both the that the lack of collateral and lack of exces-