Women entrepreneurship and Access to Finance UNDP

The presence of women-led social enterprises (WLSEs) is increasing significantly in Indonesia’s entrepreneurial ecosystem and financial institutions are beginning to realize the potential of investing in women. However, at the moment, most investment specifically targeting WLSEs in Indonesia is focused on poverty reduction and concentrated at the micro level.

Social enterprises led by women have a particular set of opportunities. However, they also face particular sets of challenges. According to women entrepreneurs surveyed and interviewed for this study, enterprises that are growth-oriented quickly become too big for most grants, but remain too small for most investors. Therefore, there is a need for financiers to carefully consider ways to bridge the gap between enterprises which are too big for most grants but remain too small for most investors, and to tap into this unmet demand, including active outreach with messages that respond to identified gender-specific needs.

On the other hand, the support intended for enhancing WLSEs goes beyond finance. A ‘bundling of services’ is requested to accommodate the women’s needs in social enterprises. The provisions of business skills training, financial management training, sector-specific technical assistance, networking, mentorship and certification are therefore as important as financial support.

Out of the four sectors represented in this study (agriculture, fisheries, forestry and technology industry), agriculture industry has the fewest barriers to entry for women entrepreneurs at the bottom of the pyramid, which makes it easier for social enterprises in the middle to include them as suppliers as well as build their capacity to grow their operations in size and sophistication. Meanwhile, forestry industry, is the most difficult of the four sectors to explore for women-led social enterprises. There is a lack of data on women’s participation in the forestry sector. Timber business activities are dominated by men, whereas women’s participation is largely relegated to subsistence. In addition, women in social enterprises are facing discrimination in various ways that affect their ability to manage and grow their business. For example, earlystage enterprises, asserted that when meeting with potential creditors or investors, it helped to “have a man in the room” in order to be seriously considered. According to interviews, even if a financial institution doesn’t require men’s names on paper, they are sometimes requested in person.

Based on the survey conducted and the analysis made, this study has identified several tailor-made recommendations that can effectively support the increased financing of growth-oriented WLSEs. This includes informed and strategic targeting, better gender-disaggregated data, bundling services, messaging and marketing, business enabling environment, data synergies and leveraging and the provision of the Internet of Things (IoT).