- By country
- By industry
- By topic
- Top 100
SOFIA (Bulgaria), March 8 (SeeNews) - Creating better economic opportunities for women can boost GDP, increase productivity and generate higher return on investments in Southeast Europe (SEE) and globally, and the private sector should be the main driver of this change, Tomasz Telma, IFC regional director for Europe and Central Asia, said on Wednesday.
"Empowering women is not only the right thing to do - it is also the smart thing to do," Telma said in an interview for SeeNews. "And we should remember that it is the private sector that should be the source of these opportunities for women in the region."
IFC is committed to developing the private sector in SEE and supporting women entrepreneurship through direct investments and credit lines to partner banks, focusing on women who are already running their own businesses or acting as leaders of companies, the IFC official said.
"[...] our main strength is in working with the companies on a micro-level, although we also have advisory activities helping the companies improve their corporate governance and gender aspects of their operations, including our women on boards advisory programme," Telma said.
IFC research in the Western Balkans has shown that that aspiring women leaders often find they have to demonstrate better qualifications and credentials and build stronger networks than their male counterparts to climb the corporate career ladder, he noted. They also seem to need more time to advance professionally and become members of boards, as very few make it to the top.
"But the good news is that companies in the region are well positioned to develop strategies for addressing particular challenges that women executives face," Telma said.
Following is the full text of the interview:
Q: How do you assess the role of women entrepreneurs in Southeast Europe?
A: Following the political changes and market reforms, the women in Southeast Europe were presented with an opportunity to step into the arena previously reserved for men by establishing businesses and ascending to top management positions. Many of them have taken advantage of this opportunity. However, a lot more can be done to achieve the full potential of women entrepreneurs in the region.
Empowering women is not only the right thing to do - it is also the smart thing to do. It can add trillions of dollars to global GDP, boost productivity, generate higher return on investments, and promote greater organizational effectiveness. The same is the case in Southeast Europe. And we should remember that it is the private sector that should be the source of these opportunities for women in the region.
Q: What can be done to improve their position?
A: IFC believes that women—as consumers, employees, business leaders, and entrepreneurs - have the potential to transform the global economy, supporting job creation, raising per-capita incomes, and promoting sustainable development. That’s why we work to promote gender inclusion in all of our activities.
Research has shown that women directors exhibit certain leadership behaviors that complement those of men and thereby lead to more effective leadership. Women are more focused on people development and they have strong sense of the link between expectations and rewards. These behaviors directly contribute to strengthening the role of the leadership team and improving the work environment, accountability and values.
Studies have also shown that women in the boardroom provide a different perspective on a wide array of subjects, ranging from what customers want to the merits of risky corporate ventures, which directly contributes to the bottom line, development of sound business strategies, and stronger risk management systems.
Q: What is IFC doing to empower women in leadership positions in business in the region?
A: Close to 30% of director nominees that IFC places on boards of its equity clients are women. Our aim is to further increase this percentage and we are actively working on accomplishing this goal. Not because it sounds good but because it’s good for business. A recent study from Credit Suisse, for example, found that companies with more diversified boards deliver better returns. The study found that where there was one female in the boardroom, companies have seen an average return on investment (RoE) of 14.1% since 2005 compared to 11.2% for all male boards. IFC also conducted similar research in Jordan and found the same positive link to RoE.
Across IFC’s equity investees around the world, we have around 146 women represented on company boards. Only four of them are in Europe and Central Asia. We are working with our investees to explore ways of bringing talented women to their boards and thus contributing to enhanced board dynamics.
As part of our commitment to help empower women in leadership positions, we also train female executives on good practices in corporate governance and board management. In the last fiscal year alone, IFC’s corporate governance programme in Europe and Central Asia worked with over 900 women, many of them from Southeast Europe, on good practices in corporate governance and board leadership.
In Southeast Europe, we remain committed to engaging our business partners in efforts to promote the business case for gender diversity on corporate boards and to explore opportunities to improve gender diversity in their companies. We continue to contribute to a culture shift, where the business benefits of gender diversity in the boardroom and in top management are better understood and appreciated.
As part of our commitment to understanding barriers and benefits of gender board diversity, IFC also conducts research. For example, research in the Western Balkans helped us understand the challenges to women’s access to corporate leadership positions. The research shows that aspiring women leaders often find they have to demonstrate better qualifications and credentials and build stronger networks than their male counterparts to climb the corporate career ladder. They also seem to need more time to advance professionally and become members of boards. Eventually, very few make it to the top. But the good news is that companies in the region are well positioned to develop strategies for addressing particular challenges that women executives face.
Q: What are the specific hurdles that the IFC faces in the SEE region in promoting a greater role for women in entrepreneurship?
A: The situation in Southeast Europe is better than in many regions around the world. The progress is evident even though a lot remains to be done.
It's encouraging to know that around 30% of all small and medium-sized businesses in Southeast Europe are women-owned. However, men are 25% likely than women to have a formal bank account, with the largest gender gaps found in Albania, Bosnia and Herzegovina and Kosovo. The lack of formal access to financial services and the latest technological tools is making it more difficult for women to be more engaged in the economic life of their countries.
Also, our research has shown that women perceive business climate in Southeast Europe more negatively than men, which may indicate that women face greater regulatory hurdles in the region. The smaller size of women-owned firms and the limited sectors in which they operate may help to explain such perceptions. We also observe that women have less access to formal business networks which help penetrate the markets and use business opportunities in the region. Clearly, women in Southeast Europe still need more time to climb up the corporate ladder and we as IFC are actively working to support them with training and development of networks.
Q: How is IFC directly helping women entrepreneurs in the region of Southeast Europe?
A: IFC directly supported women entrepreneurs in Romania. We provided a 22.5 million euro loan to Garanti Bank Romania in late 2011 to help finance small and medium businesses in Romania, especially those owned or managed by women entrepreneurs. The transaction was IFC’s first loan specifically designed to assist enterprises run by women entrepreneurs in Eastern Europe. Since then we've had similar arrangements with banks in Poland and Turkey and we are looking for opportunities in other countries of the region. Such investments not only increase access to finance to women entrepreneurs but they also have powerful benefits to our client banks. For example, our recent case study on Garanti Bank’s banking on women programme showed that Garanti Bank Romania’s NPL-rates for female SME borrowers were lower when compared with overall SME portfolio performance which includes the men-led SME borrower segment. Only 31% of SME customers with overdue loans were women-led SMEs while 69% were men-led SMEs.
We are planning to continue with similar projects in the region but it’s important to note that the private sector is the key catalyst for creating more and better economic opportunities for women. IFC remains committed to developing the private sector in Southeast Europe and supporting women entrepreneurship directly or through our partner banks.
Q: How does the IFC effort in promoting entrepreneurship among women in SEE complement the operations of other international lenders in the same sphere?
A: IFC is concentrating on the private sector and women who are already running their own businesses or acting as leaders of companies as directors or board members. We are focusing on direct investments and credit lines to banks for on-lending to women entrepreneurs.
As a member of the World Bank Group, we are working closely with our colleagues in the International Bank for Reconstruction and Development (IBRD) to address the policy bottlenecks. We have a joint World Bank Group gender equality strategy. Also, the World Bank recently issued a report: “Women, Business and the Law 2016: Getting to Equal.” The report measures legal and regulatory barriers to women’s entrepreneurship and employment in 173 economies, including Southeast Europe. It provides quantitative measures of laws and regulations that affect women’s economic opportunities.
However, as I already said, our main strength is in working with the companies on a micro-level, although we also have advisory activities helping the companies improve their corporate governance and gender aspects of their operations, including our women on boards advisory programme.
The similar approach is taken by other international lenders operating in the region. We realize that this is not a project for one institution and we are all cooperating closely.