‘Fintech can transform Asia’s women entrepreneurs’

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A woman manages her store in Muladi in Bangladesh. Her business was established with financial support from an international financial institution. Copyright: G.M.B. Akash/Panos

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  • Women entrepreneurs in Asia Pacific face discrimination and other barriers
  • Fintech training can help women overcome barriers and develop their businesses
  • Emerging fintech solutions for small businesses can be a game-changer

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[MANILA] A new initiative by the UN’s Economic and Social Commission for Asia and Pacific (ESCAP) to remove barriers to the growth of women entrepreneurs focuses on providing them access to financial technology or fintech. The initiative is expected to benefit 20,000 women entrepreneurs in six countries of the region.
“Women-owned micro, small and medium enterprises have the greatest potential to benefit from ICT as these technologies can help them overcome the typical barriers to expansion and growth,” Hongjoo Hahm, officer-in-charge of ESCAP, tells SciDev.Net. Fintech competes with traditional financial methods by using technologies such as smartphones and the Internet to better access financial services such as banking and investment

“Many developing countries have a gender divide in ICT that limits women’s access to software and hardware, as well as the capacity to use the technology for their businesses”

Hongjoo Hahm, Economic and Social Commission for Asia and Pacific (ESCAP)

The ESCAP initiative, launched on 29 September on a side meeting during the 2018 UN General Assembly, viewed women’s entrepreneurship as key to economic growth and inclusion. It identified a host of barriers, which include policies that skirt the needs and interests of women, discriminatory socio-cultural norms and poor access to finance and ICT.
“Many developing countries have a gender divide in ICT that limits women’s access to software and hardware, as well as the capacity to use the technology for their businesses,” says Hahm.
"Emerging fintech solutions that are additive and transformative have been lauded as a game changer in terms of how they are reshaping access to working capital and cash flow finance by micro, small and medium enterprises. It is also revolutionising the way women entrepreneurs can access finance," says Arup Chatterjee, principal financial sector specialist, sustainable development and climate change department, Asian Development Bank.

Chatterjee explains that innovative products and solutions, including peer-to-peer lending, online trade finance, and e-commerce finance, can be tailored to suit the needs of small businesses. He cautions, however, that users and clients will need to be educated on fintech for it to be used effectively. "Fintech adoption is about people and not tech," he says, adding that fintech players need to educate the mainstream population about its benefits.  
“Women struggle to borrow in a region where land or property is required as collateral but where very few are owners of such assets. In addition, discriminatory practices of formal banking mechanism continue to hinder women’s access to loans and financial opportunities,” Hahm says. The ESCAP initiative, he says, seeks to address these constraints through approaches that integrate financing with capacity building and policy support.
"Fintech can offer solutions that are efficient and effective at a lower scale, which will benefit small businesses and provide them with increased access to more diverse funding options," says Chatterjee.
This piece was produced by SciDev.Net’s Asia & Pacific desk.