Drive economic growth through female entrepreneurship. The first steps? Pro-active policy and a coordinated ecosystem.

A recent report released by the Asia Foundation and Asian Development Bank (ADB) predicts Asia and the Pacific stand to gain 70% in per capita income within roughly two generations by eliminating gender disparities in employment and entrepreneurship.

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While Asia and the Pacific rank among the lowest in the world for female entrepreneurship or female-owned MSMEs (micro, small and medium enterprises), the report details valuable takeaways for global organizations, governments, donors and the private sector to accelerate the participation of women in entrepreneurial ecosystems.

I’ll save you some time (the report is 50 pages) and cut straight to the good stuff.

What works and what doesn’t

Create a broad-based and mutually reinforcing policy infrastructure.

The Philippines uses a multi-pronged approach. The government prioritized women’s entrepreneurship through gender-specific laws and strategies, as well as broader regulations regarding MSMEs. A development plan included several provisions targeting priority services and resources for women entrepreneurs. One policy requires government financial institutions to provide financial assistance to NGOs engaged in developing women’s enterprises, and to offer loans to existing and aspiring women entrepreneurs. The act also stipulates that government financial institutions must allocate up to 5% of their lending portfolio to women’s entrepreneurship. Other laws include provisions for skills training, coaching and financing programs, the establishment of women’s business centers, reporting on the development of female-owned SMEs, and a mandate that a representative from the Women’s Caucus sit on the national MSME Development Council.

Angel investment networks

The Women’s Fund of the Angel Investment Network Indonesia stands out as a promising model for replication elsewhere. The network was founded by female business leaders who envisioned a seed fund and a networking and mentoring mechanism for early stage women-led start-ups. By providing pre-seed or seed funding ranging from $25,000 to $150,000, together with monthly mentoring, it has successfully invested in five companies and trained over 50 women entrepreneurs since its inception. Women’s business associations could be another avenue for generating greater angel investor opportunities, as most countries in Asia and the Pacific have at least one association that serves as a meeting venue for successful and high-net-worth women business leaders.

Alternative credit assessment strategies

Psychometric testing is increasingly used by banks to assess a borrower’s risk in the absence of traditional collateral. Based on a short behavioral-science questionnaire that considers personality traits and business knowledge, psychometric testing allows a bank to use the results to determine the creditworthiness of an applicant. The questionnaires do not ask for the sex of the applicant, and they can be completed online, creating an opportunity for women entrepreneurs to avoid potential gender bias on the part of loan officers. Other financial technology tools, including artificial intelligence, blockchains, and machine learning, have the potential to dramatically expand financial access to the vast unbanked population in Asia and the Pacific, including women entrepreneurs.

-Peer support

Peer support can be critical in ensuring that the lessons from a training program will be put into action by loan recipients. A study conducted in South Asia by researchers partnering with the Self-Employed Women’s Association (SEWA) Bank found that women who had attended a 2-day business counseling program alone were much more likely to use their loans for home repairs or other non-business activities, whereas those who had attended with a friend usually invested the money in their businesses. Four months later, those who had attended with a friend reported a higher volume of business, as well as plans to increase revenues, while solo participants had experienced no changes.

I’d love to hear your success stories for helping women break down the barriers to entrepreneurship.