The Financial Inclusion of Women in SEA & a $700 Billion Opportunity for FSPs

Ecosystem PowerTalks |

4 mins read

This year’s International Women’s Day theme #EmbraceEquity seeked to make the world a more inclusive space for women, offering them the opportunities and support they need to thrive. In an effort to encourage awareness, acknowledge the contribution and identify opportunities to support the women in our ecosystem, we invited a very special guest on PowerTalks by PowerCred to speak with us on the Financial Inclusion of Women Entrepreneurs in Southeast Asia. Our guest for our women’s day special episode Amrita Vir is the co-founder of Findicate, an angel investing syndicate focused on women-led startups, the Head of Strategy and Business Expansion at wagely and the host of The Green Room | Asian Fintech Podcast.

Amrita spoke to Vasudha from our marketing team about the financial inclusion of women entrepreneurs in Southeast Asia and a $700 billion opportunity for financial service providers.

Read on for some key takeaways from the insightful session or listen to the complete episode of PowerTalks here.

More than 95% of all enterprises in SEA are SMEs of which 50-60% are led by women, that’s a significant contribution of women.

Women-owned SMEs contribute significantly to the economy and to job creation for women and society at large. Their unique perspectives about innovation and diversity and focus on impact and social change drives them to create a social impact with women-led startups that are focused on women’s safety, healthcare and other similar issues or concerns specific to women.

As per a report by McKinsey, if women in Southeast Asia could fully participate in the economy, the region’s GDP could increase by $700 billion.

Financial service providers have been very slow to design products that meet the needs of women entrepreneurs. If financial service providers actively cater to women entrepreneurs in the region, it could help them generate additional revenue of about $700 billion annually.

The challenges faced by women entrepreneurs in Southeast Asia…

1. Discrimination, legal and social, that restricts them from holding assets, bank accounts or having other required documentation that could help them to gain access to credit.
2. Lack of adequate education and financial literacy with restricts job opportunities for them and keeps them from understanding and accessing relevant financial products.
3. Limited access to finance due to the unavailability of adequate documentation and collateral, resulting in them being treated as credit invisible.
4. Lack of access to finance affects women-led small businesses in the following ways- cash flow issues, low funds to hire competitive talent, low savings for future investments or growth, lack of capital to innovate and launch new products etc.

How can women entrepreneurs be empowered?

1. Improved digital and financial literacy among women entrepreneurs and delivery of information about relevant financial products using channels of communication used by them.
2. Reduced discrimination by educating men on gender equality and acceptance of women as active contributors to the economy of the region.
3. Innovation and building of financial products relevant to the specific needs of women entrepreneurs while addressing the unique challenges faced by them.
4. Additional support to digitise businesses, especially in non-urban areas and support to grow their business including market strategies, guidance on getting necessary documentation required by financial institutions and educating them about leveraging their data to gain access to credit.

Only 2% of VC funding goes to women-led startups even though these startups deliver outstanding returns.

Women founders are still often subjected to bias by male-dominated investment committees that affect their fair chance of fundraising for their startups. However, there are studies that suggest that gender-balanced teams deliver up to 20% higher returns and VCs are beginning to give positive weightage to gender-balanced teams, with more women in the founding team and in leadership roles while making investment decisions.

Financial products aimed at encouraging the financial independence of women entrepreneurs can be the key to their growth.

Financial service providers can innovate and build products that support the financial independence of women entrepreneurs to encourage women’s entrepreneurship and the growth of women-led small businesses. Social gender norms are still prevalent in several regions of Southeast Asia which make it important to encourage the financial independence of women entrepreneurs to promote their inclusion.

PowerCred empowers financial service providers to make smarter lending decisions with seamless access to small business data, to support their efforts to improve access to credit and promote the financial inclusion of these small businesses. To know more, speak to our team.

About PowerTalks

PowerTalks by PowerCred is a podcast where we discuss upcoming trends in Southeast Asia’s financial services ecosystem and the impact of new technology on it with industry leaders and champions.

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