Association of Banks and SABEQ Program collaborate to support women-owned SMEs in accessing finances

The workshop targeted groups of rising women leaders in the banking sector and businesswomen associations, as well as bankers in Jordan.

The initiative began with an analysis conducted by the SABEQ Program in the month of April, of the status of women-owned SMEs and their bank portfolios. The analysis revealed that women-owned small and medium enterprises (SMEs) face significant constraints in accessing finance for business start up, growth and expansion.

While this is an issue for all entrepreneurs, male and female, it is an even greater problem for women as they have lesser assets to use as collateral as compared to men. In light of the findings, the SABEQ Program and the Association of Banks decided to collaborate and create considerable awareness and a call to action regarding this topic. The two entities, who have already been working closely on other capacity building topics for the banking sector in Jordan, both saw the importance of supporting women-owned SMEs in Jordan.

The specific goals of the workshop were centered on helping participants understand the business case for working with women-owned SMEs by providing information on the scope, size, and potential of the women-owned SME market in addition to the superior credit risk of women world-wide.

The workshop also illustrated case studies of other commercial banks in the region that are successfully banking with women-owned SMEs; the workshop facilitator addressed the gender issues that typically arise during all phases of a loan application process from communication through loan appraisal; the workshop also trained participants on how to effectively advocate and/or train senior and mid-level bank officials on (1) the value and importance of reaching women-owned SME clients and (2) the strategies to adapt service offerings for this target group.

In addition, some training to participants was provided on outreach strategies to identify promising clients among women-owned SMEs. The final goal achieved in the workshop was developing an action plan where the commercial banks and the women's groups were able to work together.

The SME sector has the potential to become a profitable market segment for commercial banks looking to expand their client outreach and lending portfolios. Case studies from around the world have demonstrated that commercial banks can profitably do business with micro, small and medium enterprises (MSMEs), despite the perceived risks and challenges. Moreover, success stories and lessons learned from commercial banks world wide, reveal that banks can profitably bank with women-owned enterprises.

Such evidence and learning has prompted many banks to review their loan appraisal procedures and adapt their loan products to more adequately address the needs of MSME clients, including women. The women-owned SME client base has proven to be a secure market for commercial banks as women are generally more reliable borrowers, averaging 98% repayment rates .

Achievement of the USAID-funded SABEQ's principal goals is strongly linked to women's economic growth and participation. To that, gender integration activities have been included within the program's four core components. The vision of gender integration is one in which women are full participants in the economy as labor entrants, business owners and policy advocates.