forum for south east european women entrepreneurs istanbul 21-22 september 2010
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Forum for South East European Women Entrepreneurs Istanbul 21-22 September 2010. Financing Women Entrepreneurship: Lessons Learnt and Innovative Practices by Siv Hellén, Advisor to the President, Nordic Investment Bank (NIB). - PowerPoint PPT PresentationTRANSCRIPT
Forum for South East European Women EntrepreneursIstanbul 21-22 September 2010
Financing Women Entrepreneurship: Lessons Learnt and Innovative Practices
by Siv Hellén, Advisor to the President, Nordic Investment Bank (NIB)
Outline of the presentation:
• Brief presentation of the Nordic Investment Bank (NIB) and the Council of Europe Development Bank (CEB)
• Description of the loan programmes for women entrepreneurs
• Lessons learnt
• Conclusions and remarks
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NORDIC INVESTMENT BANKenhancing competitiveness
& the environment
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IcelandIceland
NorwayNorway
DenmarkDenmark
LithuaniaLithuania
LatviaLatvia
EstoniaEstonia
FinlandFinland
SwedenSweden
Northern Europe’s multilateral bank• Nordic and Baltic countries
as shareholders
• Established in 1976 by the Nordic countries
• Baltic countries joined in 2005
• Headquarters in HelsinkiKey figures 2009
• Balance sheet € 22.4 billion
• Loan portfolio € 13.8 billion
• Loans disbursed € 2.0 billion
• AAA credit rating
• Lending in member countries and emerging markets
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Mission
NIB promotes sustainable growth of its Member countries by providing long-term complementary financing, based on sound banking principles, to projects that strengthen competitiveness and enhance the environment.
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NIB’s global reachFramework agreements with 39 non - member countriesCurrent focus countries
China, India, Vietnam
South Africa, Turkey
Poland, Russia, Belarus, Ukraine
Brazil
Asia
Africa &Middle East
Europe& Eurasia
Latin America
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CEB -
COUNCIL OF EUROPE
DEVELOPMENT BANK
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CEB OverviewInstitution
• Oldest pan-European supranational financial institution
• Set up in 1956 to strengthen social cohesion• 40 Member States - members of the Council of
Europe
Key figures 2009• Total assets: € 22.7 billion• Own funds: € 4.9 billion• Rating: AAA (Moody’s, S&P, Fitch Ratings)• Over € 30 billion in projects financed since inception• Outstanding loan portfolio: € 12.2 billion• Loans disbursed: € 1.8 billion
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CEB OverviewBorrowers
• Member States • Local or regional authorities • Financial Institutions
Activities • Loans • Guarantees• Trust Accounts
Sectorial lines of action• Strengthening social integration• Managing the environment• Supporting public infrastructure with a social
vocation
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Loan Programmes For Women Entrepreneurs
The idea was born in 1999 at a conference in IcelandPurpose: to support and increase women's involvement in
business and decision-making processes in order to promote gender equality
Projects carried out by SMEs or individuals in the private sector
Involve local financial intermediariesPriority given to projects creating new jobs and projects
located in rural areas and in regions with high unemployment
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The programme objectives
Provide credits to SMEs (women entrepreneurs), for investment and working capital
Total loan amount (CEB & NIB) € 10 million, extended by each institution in 6 loans to 5 banks in Estonia, Latvia and Lithuania
Facilitate access to medium/long term commercial credits with attractive interest rates for women entrepreneurs
Create and maintain jobsContribute to the promotion of welfare and equality in Estonia-
Latvia-Lithuania through the development of women’s entrepreneurship
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Loan Programmes For Women Entrepreneurs – Amounts and targets
The 1st loan programme was only € 1 million to be divided equally by the three Baltic countries
Followed by another loan programme, this time together with CEB, in the total of € 10 million
NIB later launched one loan programme in Russia of 2 million euro, which was less successful
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Loan Programmes for Women Entrepreneurs:Structure of the Programmes
Siv Hellén 22 May 2010
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Loan Programmes For Women Entrepreneurs: Guidelines
Requests for loans considered on a commercial basis
Emphasis put on the strategy of the borrower, the competitiveness of the project idea and environmental aspects
Flexibility in expenditure to be financedMaximum tenor: five to seven years Interest rate charged by the financial intermediary
based on market terms for each borrower individually
Loans must be adequately secured 04/21/23
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Loan Programmes for Women Entrepreneurs : SME Eligibility Criteria
maximum 100 employees
maximum 75 m€ net fixed assets and
maximum 33% held by a large corporation
PlusPlus
owned or managed by women
or
clearly improving women’s opportunities in the employment market
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Loan Programmes for Women Entrepreneurs: Total Figures
Number of projects Jobs maintained* New jobs*
ESTONIA 66 562 88
LATVIA 191 1,346 363
LITHUANIA 131 1,614 383
TOTAL 388 3,522 834
RUSSIA 5
* Estimated figures
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Baltic StatesLoan Programmes for Women
Entrepreneurs:
Lessons learnt
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NB: The CEB findings presented hereafter are adapted from the results of an ex post NB: The CEB findings presented hereafter are adapted from the results of an ex post evaluation carried out in 2007 on these programmes.evaluation carried out in 2007 on these programmes.
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Lessons learnt - Ex post evaluationOverall a very positive outcome
The programmes performed well and efficiently
Served the businesses that were targeted Good correspondence with CEB’s social
mandate
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Lessons learnt –Ex post evaluationThe programmes performed well and efficiently
Objectives largely met Very satisfactory institutional arrangements Satisfactory sub-loan performance Banks and women entrepreneurs satisfied with
management and conditions Efficiency was satisfactory
Programmes well documented Zero defaulting loans (June 2007) Schedule well-respected and lead times
acceptable, short even Satisfactory cost-efficiency and cost-control
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Lessons learnt - Ex post evaluationThe programmes served the businesses that
were targeted
Great variety of sectors, often services Half or more were micro-enterprises Rural focus well-respected
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Lessons learnt- Ex post evaluation – Great variety of companies
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Lessons Learnt – Ex post evaluationRural focus well respected
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Lessons learnt- Ex post evaluationIn line with CEB’s social mandate
The programme's target represents a specific niche combining…A commercial aspect
Credit to companies at market termsA social aspect
Specific disadvantaged group, namely women entrepreneurs
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Lessons learnt- Ex post evaluationRelevance was not perfect
Objectives and eligibility criteria OK The label « women entrepreneurs » does lower barrier-to-entry
for women Rural area focus gives a chance to entrepreneurs with less
collateral Start-up finance responded to need
But Relevance of job creation objective rapidly eroded at the time Baltic States: narrow gender gap in entrepreneurship
- Other CEE countries probably more relevant Additionality?
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Lessons learnt-Ex post evaluation Differentiating types of impact
Internationally operating production companies Investments in machines, increasing productivity,
efficiency, competitiveness- E.g. Siauliai textile manufacturers
Nationally operating companies Investment to allow national expansion
- E.g. opening shop in other town
Locally operating companies Increase local client base by increasing attractiveness or
capacity- E.g. refurbishment/extension beauty salon; new car lift in repair
shop; fitness apparatus…
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Lessons learnt – Ex post evaluationSustainability
Women entrepreneurs seem to have become more mainstream clients
Financed companies are healthy But experience lack of skilled labour
Companies improved their ability to raise money
Influence of credit squeeze and overheating? Government support, trust funds?
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Lessons learnt - General Assumptions: Women's Point Of View
Women set up their companies, still with own capital
Women have equal opportunities to access credit
Women need more encouragement and support
Women want role models
Women need more information on credit possibilities
Women are more careful and take less risks than men
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Lessons learnt - Experience Gained
Women feel that credits for SMEs are in general too expensive
Women positively surprised by friendly and helpful attitude at banks
Women found it positive that the loans were exclusively for them
Choosing the right local bank is essentialGovernment support was considered to be
importantMajority of women entrepreneurs will ask the banks
for additional financing in the future04/21/23
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Lessons learnt - Experience Gained: Banks' Point Of View
Difficult to combine profitability and small creditsNo experience in addressing women’s particular
concernsChallenge: Banks should not give advice on how to
prepare business plansBusiness plans prepared by external consultants often
not of good qualityWomen in rural areas with start-up projects difficult to
reachLoan applicants did not have sufficient collateral
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Conclusion and remarks - Have Micro Loans Reached Their Goal?
NIB's and CEB's programmes have raised several questions:
Why offer special credits for women entrepreneurs?Are special loans for women entrepreneurs in line with
gender equality?What is innovative in NIB's and CEB's programme?
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Conclusions and remarks - Why offer special credits for Women entrepreneurs ?
Women like to be target clientsWomen do not need generally better terms and
conditionsWomen need good advice in preparing business
plansWomen need information about credit possibilitiesWomen as an untapped resource have become a new
target group for the banksLoans for women have taught the banks to simplify
their procedures and to understand women's special needs
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Conclusions and remarks Are loans in line with Are loans in line with gender equality ?gender equality ?
Yes because:Loans sparked discussion of women's issues
and gender equalityCredits were not created to distort competition
and they did not contain any real subsidy Women got increased access to creditWomen as an untapped resource have become a
new target group for the banks
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Conclusions and remarks - What was innovative with the loans ?
In fact not so much – back to basics
A few observations: Banking in transition countries still very male -dominated, both
clientele and loan officers Important to choose the right local intermediaries, e.g. banks with
experience in SME-financing Collateral support is needed especially in rural areas and for start-up
projects Quick and efficient/expedient loan processing essential Advisable to enhance programmes with trust funds Loans for women have taught the banks to simplify their procedures
and to understand women's special needs3304/21/23
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Conclusions and remarks - Key Points: Be Smart
• S - Simplify
• M - Market
• A - Adapt
• R - Respond
• T -Train
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