World Bank Country Director for Vietnam Ousmane Dione (Photo: VNA)Hanoi (VNA) - Vietnam has been growing at 6 percent plus over the past few years and this is indicative of the contributions of women to business and the economy, World Bank Country Director for Vietnam Ousmane Dione has said in a recent interview granted to the Vietnam News Agency.
The following is the full text of the interview.
Why is it important to support women to start and run businesses? What do you think about the role of women-led businesses in an economy?
Constraints on access to financial services for women lead to constrains on economic activity - when women suffer, the economy suffers. When women do well, society benefits. Financial inclusion increases women’s power to make decisions within the family, household, community, and within society. It is also well documented that female-controlled finances result in higher spending on household necessities such as food and water, and child welfare, including school fees and health care. Empowering women by giving them control over their finances is not just smart economics, it is key to ending poverty. Supporting women to start and run businesses contributes directly to this objective.
Women led businesses play an important role in any economy. Formal and informal SMEs account for more than 90 percent of enterprises in the economy and contribute about 50 to 60 percent of employment in the world. Women-led SMEs make up a sizable portion of this market. Of the approximately 40 million formal SMEs globally, about a third or 12 million, are women-owned. Seven million of these women-owned SMEs are in the developing world. Empowering female entrepreneurs, especially those in high-growth sectors, such as manufacturing or IT, has the potential to create jobs, increase incomes, lift millions out of poverty, and lead to greater economic and social transformation.
What do women entrepreneurs need to be successful in their business?
Women entrepreneurial activity is often concentrated in low productivity sectors, such as restaurants and food services, with limited potential for growth in income and employment and that often operate informally. Moreover, empirical evidence suggests that female entrepreneurs are often facing many obstacles to grow their businesses from micro or small to medium or large productive enterprises with transformational economic impact. Empowering female entrepreneurs, paving the way for their business to growth, creating favorable conditions for women to enter high-growth sectors, are crucial for job creation, income increase and poverty reduction.
What do you think about Vietnamese women’s potential for and capacity of doing business?
Vietnamese women are extremely entrepreneurial and hard working. They contribute significantly to household income, and by and large they are supported by their husbands and families. Vietnam has been growing at 6 percent plus over the past few years and this is indicative of the contributions of women to business and the economy.
[Vietnamese female entrepreneurs empowered]
Some women-run enterprises in Vietnam have moved to stretch their reach to the world such as Vietjet Air, TH True Milk and Vinamilk. What do you think about their performance?
This is very inspiring and I think this is testament to the potential of Vietnamese women entrepreneurs and their positive contributions to the country economy. I also think that many Vietnamese women entrepreneurs can serve as role models for the next generation of younger women entrepreneurs. Further Regional Integration and ASEAN provide substantial growth opportunities and access to larger markets and value chains that can continue to provide growth opportunities for women led businesses in Vietnam. It is imperative though that the government also recognize this potential and ease some of the constraints facing women entrepreneurs.
Vietnam ranked 19th in the Mastercard Index of Women Entrepreneurs 2017 and was placed 7th in terms of the rate of women business owners, 31.4 percent. What do you think about these rankings?
This is impressive and Vietnam should congratulate itself for these rankings. Nevertheless, there is always room for improvement and to further move up the rankings by creating a conducive environment to foster women entrepreneurs.
What should relevant agencies of Vietnam do to encourage more women to do business?
To encourage more women to do business in Vietnam, relevant agencies should:
- Address constraints stemming from social norms and subjective preferences that are biased against women entrepreneurs,
- Raise awareness of the business case for serving women-owned SMEs.
- Support women entrepreneurs to cross over into higher value-added and more productive activities through the provision of business development skills (training on how to run a business),
- Addressing constraints on access to finance for women, such as lack of collateral, reducing necessary documentation;
- Articulating the market opportunity for serving women-owned SMEs will help financial institutions design tailored financial products and services
- Addressing any other legal and institutional constraints that may constrain women entrepreneurs.
[Vietnamese women in fascinating start-up culture]
Does the World Bank have any cooperation programs with Vietnam to support women entrepreneurship?
A substantial proportion of women entrepreneurs remain unserved by financial institutions in Vietnam. The World Bank has an extensive technical assistance program to expand financial inclusion in Vietnam. Part of this support is to address the financing constraints for the Micro and Small Enterprise (MSE’s) sector in Vietnam, of which a substantial proportion are led by women.
MSEs are critical to the country’s emerging market-based economy and are critical to contribute to employment, poverty reduction and growth, however in recent years we have seen slower growth in this important sector. Vietnam’s Ministry of Justice reported that MSEs make up 97 percent of the number of enterprises with well over 400,000 businesses; roughly 67 percent, 28 percent, and 2 percent of businesses are micro, small and medium enterprises, respectively. Furthermore, the IMF reported that MSEs contributed to over 40 percent of the country’s GDP in 2015 and made up 20 percent of Vietnam’s total exports.Therefore this is an important sector to support.
The World Bank Group is keen to take part in high level seminars and workshops to highlight the importance of women entrepreneurs and the need to support them drawing from other countries successful experiences.
Thank you very much.-VNA
