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2017

Women-owned enterprises in Vietnam: Perceptions and potential

Women-owned enterprises in Vietnam: Perceptions and potential

The Women-owned enterprises in Vietnam: Perceptions and Potential report exposes misconceptions facing women entrepreneurs in Vietnam and elucidates the opportunities for banks and related service providers. By recognising the needs of business women and demonstrating a more nuanced approach to serving them, this report makes the case that championing rather than dismissing women’s preferences can in fact make a big difference in terms of customer acquisition and sales volumes over time.

This study used both quantitative and qualitative research methods. The quantitative research consisted of a demand and supply component, focused on businesses and banks respectively. The demand survey was executed through individual tablet-based interviews of 500 business owners or top managers, consisting of 322 women-owned and 178 men-owned businesses. The supply survey was based on individual interviews with a selected group of bank representatives.

This study looks at the specific financial and non-financial needs and opportunities for women-owned SMEs in Vietnam. It quantifies the market opportunity for banks to target these SMEs with strategies that recognise the number of such businesses, annual revenues generated, number of employees, and contribution to the economy.

Highlights

  • The level of risk-taking in seeking financing is very similar between female and male owners of small and medium businesses. About half of female and male business owners think that a good time to apply for a loan is when they have a business idea that might be successful and needs funding. A third of both female and male business owners prefer to apply for a bank loan when they already have good sales and know that there is demand for their products/services.
  • The average revenue of SMEs led by women and men is very similar, based on the GSO 2015 survey of over 181,000 firms. Women-owned small businesses have average annual revenues of USD 548,000, versus USD 543,000 for those led by men. For medium-sized businesses, women-led firms have average revenue of USD 5.69 million versus USD 5.76 million for those led by men.
  • The level of risk-taking in seeking financing is very similar between female and male owners of small and medium businesses. About half of female and male business owners think that a good time to apply for a loan is when they have a business idea that might be successful and needs funding. A third of both female and male business owners prefer to apply for a bank loan when they already have good sales and know that there is demand for their products/services.
  • Another perception about women entrepreneurs is that, once they have a family of their own, they face so many other priorities that they might slip on repayment of their business loans. Survey findings show that this is not the case, with banks reporting lower non-performing loans among women entrepreneurs (one bank reported NPLs of 0.95% for women-owned SMEs versus 2.17% for men-owned SMEs) and women typically proving more conscientious borrowers than men.
  • A widely-held perception in Vietnam is that women mostly work in family businesses and that while women might manage a business, it is usually owned by men. In this survey, out of the 322 women-led businesses, only 8% are owned by or with a family member of the top manager, and only 3% are majority owned by men.

Contents

  • Executive summary
  • The study
  • Misconceptions in the market
    • Myth 1: Women entrepreneurs are more risk averse than men in seeking finance
    • Myth 2: Women only focus on small businesses “on the side”
    • Myth 3: Women with children do not have time to lead a business
    • Myth 4: Women have other priorities and are less likely than men to pay back loans
    • Myth 5: Women only work in family businesses and most are owned by men
    • Myth 6: Women need more financial education than men
    • Myth 7: Women do not have time for learning and network
    • Recommendations

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