Jakarta, April 21, 2006
The International Finance Corporation’s Program for Eastern Indonesia SME Assistance, IFC-PENSA, and the Indonesian Women’s Business Association, or IWAPI, recently launched “Voices of Women in the Private Sector,” appropriately coinciding with the anniversary of the birth of the country’s eminent women’s rights activist, Kartini.
The study highlights the challenges and opportunities women entrepreneurs in Indonesia face in managing and operating their businesses. “Women entrepreneurs in Indonesia are making a significant contribution to the country’s economic development,” said IFC’s Program Manager, Hans Shrader. “Yet disadvantages in terms of the social mindset and access to education and capital still present a major barrier for women’s entrepreneurship in Indonesia.”
More than 70 businesswomen in seven Indonesian cities, ranging from the owner of a small batik shop in Yogyakarta to the owner of a crocodile farm in Balikpapan, were interviewed on issues including customs and laws, education, and disincentives in starting and running a business.
The initiative was driven by the fact that female-owned businesses represent 60 percent of the about 30 million micro, small, and medium enterprises in Indonesia, according to estimates by the State Ministry of Cooperatives and Small and Medium Enterprises. This statistic is also reflected in IWAPI’s membership database, which indicates that 85 percent of its nearly 16,000 national members are owners of micro and small enterprises. Regardless of whether they are involved in the micro, small, or medium sectors, these women entrepreneurs not only provide valuable services and generate income for themselves and their families, but also create jobs and make a significant contribution to the country’s economy. Nevertheless, many women entrepreneurs in Indonesia continue to face daunting challenges and barriers in operating their businesses.
“The key to the problem of women’s role and position is public perception that men are the heads of the household whereas women are housewives. Therefore, women are expected to prioritize their role as a housewife at all times,” said Reny Feby, owner of Reny Feby Jewelry in Jakarta. “This perception must change so that women and men have equal opportunities.”
During a recent discussion, the State Minister of Women Empowerment, Dr. Meutia Hatta, and IWAPI Chairperson Suryani Sidik Motik stressed the importance of changing the social perceptions that inhibit women’s entrepreneurship and of raising awareness about the significant contribution that women entrepreneurs make to their families and ultimately to the country’s economy.
The country’s businesswomen also have problems in accessing finance that in the end may deter them from formalizing their business. “Factors that discourage women from applying for bank loans include high interest rates, complicated procedures, and rigid collateral requirements,” said Sandra Pranoto, Business Development Analysts on Women and Business from IFC-PENSA’s Business Enabling Environment program.
Only through the joint efforts of all stakeholders can real changes be achieved to provide Indonesia’s women entrepreneurs access to an environment more conducive to doing business. Helping them overcome barriers to business creation and expansion will not only support the economic empowerment of women and the welfare of their families, it will also generate new jobs and ultimately benefit the community in the areas they operate.
About IFC and IFC-PENSA
The mission of IFC, the private sector arm of the World Bank Group, is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people’s lives. IFC-PENSA is IFC’s technical assistance facility supporting small and medium enterprise development in eastern Indonesia. The facility’s Sustainable Supply Chain Linkages program creates business opportunities in the forestry and furniture sectors by improving environmental management and encouraging sustainability, especially in sourcing for good wood and links to markets looking for good wood products. The IFC-PENSA facility has a five-year mandate and has been cofunded by IFC, the Australian, Canadian, Japanese, Dutch, and Swiss governments, and the Asian Development Bank, with funding commitments of almost $25 million. For more information about IFC, visit
www.ifc.org
.
About IWAPI
IWAPI was established in 1975 to develop and strengthen businesses owned and managed by women by increasing its members’ capacity to manage their businesses and improve their access to technology, marketing, and funding. IWAPI also provides advocacy, technical assistance, and networking services to its members.
