Eroshan Alagaretnam :
Although nearly one-third of all private businesses in the world are owned by women, those same businesses receive less than 1 per cent of large corporate and government buyer spend. If this market failure can be corrected, trillions of dollars would flow into the hands of women who not only own businesses and employ people, but also reinvest their wealth into their families and communities worldwide. According to McKinsey & Company, advancing women’s equality, including economic participation, could add $12 trillion to global growth by 2025.
Women-owned businesses are one of the most underutilized drivers of innovation and job growth in both developed and emerging markets. According to “How to Rebuild Global Business for Good,” a special report underwritten by Moody’s Corporation and TD Bank Group and led by WEConnect International, when women business owners gain access to markets and capital, everyone benefits-employees, families, communities and the global economy. It has been observed in the ecosystem report conducted by WEConnect International that, in South Asia, the women’s labour force participation rate is among the lowest in the world. In the context of Bangladesh in 2013, only 12.7 per cent of all firms had female participation in business ownership. Yet overall participation had risen to 36.7 per cent by 2019. This indicates the importance of the contribution from women business owners to build more sustainable and inclusive economies.
One critical component for boosting growth of women-owned enterprise in Bangladesh-and globally – is to provide women entrepreneurs with equal opportunity to compete in global sourcing. Another is access to capital funding, which remains elusive to many women entrepreneurs. These two elements are connected.
The journey to equal access to capital funding for women-owned businesses is fuelled by value chain diversification and gender inclusive sourcing by corporate giants for those same businesses offering competitive goods and services. When women-owned businesses are better able to sell their products and services, they are far more attractive to banks and investors seeking a return on their capital funding. When women seek credit with contracts in hand, it makes it much easier for lenders and funders to provide financing options.
But it’s about much more than bank loans. Women business owners want fair access to sources of organic growth-income that does not need to be paid back with interest or equity. They want contracts to fill orders, deliver solutions, grow their businesses and create jobs for others.
Unfortunately, women-owned businesses are still invisible in the supply chain.
For the most part, challenges that women-owned businesses face are universal–particularly in emerging economies. These are access to technology, capital and markets for their products and services. This applies to women business owners in Bangladesh.
Therefore, the most promising avenue to realizing the collective economic potential of Bangladeshi women is to redress gender gaps in corporate value chains and increase access to markets for women-owned businesses. Doing that will require a group effort between the private and public sectors, supported by NGOs, to facilitate gender inclusive sourcing as a proactive supplier diversity and inclusion strategy.
We have our work cut out for us. Typically, there is no formal method available within corporations in Bangladesh to track suppliers by gender. Moreover, many corporations don’t know how to engage their prime suppliers to incorporate more women-owned businesses into their value chains as subcontractors with indirect procurement opportunities. To complicate matters further, the majority of women-owned businesses in Bangladesh are in early business development stages and do not meet standard requirements to become a direct supplier or prime supplier to corporations.
Yet despite all of these challenges, we are making progress.
WEConnect International is facilitating and supporting training courses to improve business readiness, such as capacity-building, business pitch preparation, negotiation techniques and navigating the complexities of corporate supply chains for women business owners. We offer certification initiatives so buyers can be assured that a business is 51 per cent owned, managed and controlled by a woman. We also organize business match-making events to connect corporations with women business owners.
As part of our global online platform, we are adding Bangladeshi women-owned businesses so as to enable them to network with our global buyers around the world, thereby enhancing their business opportunities. At the end of May 2022, we have more than 600 registered women-owned businesses from Bangladesh, and financial institution like Bank Asia, Brac Bank, The City Bank, IDLC Finance and IPDC Finance have pledged for gender-inclusive sourcing with WEConnect International.
These efforts will benefit not only the women business owners, but will drive positive economic impact in Bangladesh.
Policymakers, corporations, multilateral institutions and women business owners themselves all agree that now, more than ever, we need more women to start and grow businesses as a sustainable engine for inclusive growth and prosperity in South Asia.
(The Writer is the South Asia Regional Director, WEConnect International, leader in women’s economic empowerment and supplier diversity and inclusion and managing the operations and development of the South Asia region.Views expressed are personal).
