Why is gender balance in business important?
Gender balance: an equitable distribution of life’s opportunities and resources between women and men, and/or the equal representation of women and men.
Within the Innovation Against Poverty Fund (IAP), a specific attention is given to gender equality between men and women, and the social and economic empowerment of women within the companies that IAP support, which includes companies in Cambodia, Ethiopia, Uganda and Zambia. More women included in the labour market will result in multiple benefits for the society at large, including, the realization of women’s rights and gender equality; increased economic diversification and income equality; strong inclusive economic growth; and the realization of Sustainable Development Goals.
While more women are increasingly part of business ventures today, or start their own businesses, a disparity between the number of men and women entrepreneurs persists. Based on a study in 140 countries, it’s estimated that there are approximately 8-10 million female-owned businesses globally*, which represents almost 38% of all SMEs collectively. Despite the representation however, female entrepreneurs face a myriad of challenges when it comes to scaling their businesses, ranging from financial to non-financial challenges.
Mom Keo, one of Cambodia’s lead entrepreneurs and founder of Lyly Food Industry Co Ltd, and Nithya Menon, lead engineer working with Okra Solar, are two women that despite the odds, are breaking new grounds and fighting against traditional stereotypes. They have shared their experiences with IAP, describing the opportunities and challenges that they encounter working in traditionally male-dominated industries.
Mom, whose expansion to processing and packaging dried fruits is supported by IAP, tells us about the struggles she experienced when founding LyLy Food, which is now a cooperative with more than 1500 smallholder farmers, supplying their processed packaged foods to 11 different countries with a focus on benefitting low income households.
“Until recently, in order to convince banks to approve loans, I had to be extremely well-prepared and bring an extensive bundle of supporting documents and proof that the business was viable and able to repay the loan. This would have been different if I was a man since the banks are more inclined to trust men and feel more comfortable lending to them. Today I’m proud to see that the government has shown commitment to support and promote women in business and access to finance. This is a big change from how it was back then.” – Mom Keo.
While a study of entrepreneurs in Tanzania showed that women entrepreneurs are less likely to take risks, Mom risked everything by selling her house after she was denied loan after loan while starting up LyLy Food Industry Co Ltd.
“My family strongly advised me to re-consider starting this business as I announced that I would be selling the house. They recognised that it was a high risk since I didn’t even know what the machinery would look like, how it operates and whether it works for the intended purpose. If it didn’t work out, the entire investment would go down the drain, which would severely affect my family’s and children’s future”
Mom remembers how she in the beginning had no network to turn to, especially being a woman. In order to gain information about the machinery she acquired she had to reach wide and high to collect insights to make wise decisions and setting up operations. The recognition of the importance of networks, may be the reason to why Mom today serves as President of Cambodia Women Entrepreneurs Association (CWEA) that started in 2011, where she represents 500 other women-owned businesses.
While there is progress institutionally to promote women entrepreneurs today, cultural barriers however, remain. Having confidence in your business is difficult when you face the cultural barriers that Mom faces, as she is for example not allowed to meet prospective clients over dinner alone. Every decision she makes needs convincing of her husband and parents. Mom manages to balance cultural expectations while keeping her business performing financially.
IAP strives to include an equal number of women and men in all business ventures IAP supports, by providing technical advisory on gender sensitive approaches to the companies. Studies strongly suggest that group performances in business comprised of a balanced number of men and women result in better management practices than homogeneous groups. With a higher collective intelligence in groups that include women, groups with more women tend to have more equality within discussions, allowing and enabling all group members to be heard. While women are still underrepresented in businesses, especially in STEM fields, Okra Solar, a company that IAP supports in Cambodia, which focuses on a distributed solar energy solution that makes energy accessible for low income people, has employed Nithya Menon as their lead engineer.
“It can’t be easy being the only woman in a company full of men. But Nithya doesn’t just manage to fit in, she manages to shape, lead and inspire the team forward to our shared goals of equality through access to energy and technology. Nithya is working with all her heart in the off-grid, clean energy sector”. – Afnan Hanan, CEO of Okra Solar.
While Nithya has greatly impacted the Okra Solar team not only as a technical resource, but also as an ambassador for the company, Nithya still faces challenges while working in the STEM industry.
“As the first and only woman at Okra, I am trying to pay more attention to sexism and other prejudices in our industries. Because even when I am thankful to be surrounded by men who listen and respect me, sexism in STEM, or otherwise, is still unavoidable. I’ve been confused as the CEO’s wife in a business meeting, and the resulting surprise when my position as a lead engineer is revealed is both infuriating and degrading. Self-doubt comes in waves and maybe my relationship with engineering will always be complex, but when I look around to a team who always has my back and proudly advocates for me, my confidence picks up again.” – Nithya Menon.
Not only do companies with greater gender diversity outperform those with no women, studies shows that supporting diversity in companies where women are underrepresented leads to a more talented and skilled workforce, which increases innovation capacity. Increasing the number of women in the work force does not just make good business sense, it also increases meaningful participation in economic decision making from household levels to international institutional levels. The economic empowerment of women is essential to realising gender equality and women’s rights. While we still have a long way to go, IAP is proud to be a part of this shift towards more equal opportunities for men and women in businesses.
According to Mom, having women taking greater part of business is not just a matter of greater economic empowerment for the individual women but also broader, sustainable development on country level. If women are more included in the labour market and are enabled to run their own businesses, it strongly contributes to the welfare of the family as well as the community, eventually enabling national economic and social development.
You can read the full interviews with Nithya Menon, Mom Keo and other women who are a part of inclusive businesses that IAP supports in the following link: http://innovationsagainstpoverty.org/resources/.