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ACTION BRIEF

GUIDANCE FOR ACTION:SUPPORTING SMEs TO ENSURE
THE ECONOMIC COVID-19
RECOVERY IS GENDERRESPONSIVE AND INCLUSIVEBACKGROUND
Women-owned SMEs
C LO

SMEs in Asia and the Pacific

Risk of bankruptcy

SED
6 months

96%of all businesses

3 months

in Asia

The COVID-19 crisis is hitting
women particularly hard, as they
make up the majority of thosemost vulnerable at work, and theyoften bear the brunt of increased
pressures at home. The crisis isalso having a greater impact onsmall and medium enterprises(SMEs), as these have less capacity
to absorb the shocks to supply
chain and to customer revenue.

The SME sector is hit hardest andwomen are facing compoundedchallenges. They are particularlyv u l n e ra b l e t o t h e c u r r e n tcrisis. However, SMEs will also
be essential to the economic
recovery as SMEs make up 96
percent of all businesses in Asia,and account for two out of threeprivate-sector jobs.1

85 percent of SMEs in China
have said that they would facebankruptcy if the loss of income
from COVID-19 lasts three months,
rising to 91 percent of SMEs if it
lasts six months.

THE COVID-19 CRISIS AND ITS IMPACT ON ASIA AND THE PACIFICThe COVID-19 crisis is hitting Asian economies
particularly hard, as mobility restrictions are hurting
the key sectors of export-oriented manufacturing andagriculture, as well as tourism and hospitality wherewomen workers predominate. These are sectors witha high concentration of micro, small and medium
sized enterprises, and many of them run by women.
Worldwide, the International Labour Organization(ILO) estimates that up to 25 million people may
become unemployed, causing a total loss of USD 3.4
trillion in workers’ income.2 The World Travel andTourism Council has said that travel restrictions could
cost up to 50 million jobs in that sector globally, 30
million of them in Asia.3In Myanmar, 20 of the country’s 500 factories have
halted operations due to interrupted supply chains,
15 of them permanently. The suspensions, mostly
in the garment-making sector, have left 10,000
people out of work.4 Around 80 percent of garment
workers in Myanmar are women. In South Korea, asurvey of 192 import-export SMEs found that 138of them were facing supply chain disruptions andincreased costs.5
In China, around 85 percent of SMEs have said thatthey would face bankruptcy if the loss of income fromCOVID-19 lasts three months, rising to 91 percent ofSMEs if it lasts six months.6

WOMEN’S DOUBLE BURDEN
The COVID-19 crisis is affecting everyone, but it
is hitting women in particular ways, and some
populations especially hard. Women are more likely
to be laid off or even contaminated at work because ofthe type of sectors where they are overrepresented,
notably in the care and health sectors and in garments
and other export industries.
And women who have to fulfil both employment andhousehold duties are finding their lives much harderwhen whole families are confined at home. Womenand girls in Asia and the Pacific spend up to 11 times
more of their day on unpaid care and domestic carework than do men and boys.7 With these duties
intensified during lockdown, women struggle to stay
economically active whether as employees, selfemployed or as entrepreneurs.

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WOMEN-RUN SMEs AND SELF-EMPLOYED WOMENAll SMEs have a limited capacity to absorb theshock of the COVID-19 outbreak because they
have less inventory, smaller client bases, fewer
cash reserves and more limited credit options
than larger companies. In the case of women-run
SMEs, this lack of resilience is exacerbated bytheir lower access to financial services and assets,
information and communication technology (ICT),and business networks, which are more readily
available to men. 8
All of these challenges are even more pronounced
for self-employed women, notably those in the
agricultural sector, in informal employment, orrunning micro SMEs (for example a food standor tailoring service).9

WOMEN, SMEs AND THE TECH SECTOR
If women are overrepresented in disadvantaged
sectors, they are underrepresented in higher-skilledindustries related to the fields of science, technology,engineering and maths (STEM). This reflects the factthat globally, female students’ enrolment is just
3 percent in ICT, 5 per cent in natural science,
mathematics and statistics, and 8 per cent inengineering, manufacturing and construction,according to UNESCO.10
The emerging sectors of technology, e-commercend fintech hold significant potential for SMEs.
Embedding payment systems into e-commerce
platforms and digitizing supply chain management

can combine the online and offline elements ofbusiness, improving savings, revenue and flexibility.
And these solutions are increasingly accessible forsmaller businesses, not just the largest ones.11
However, these sectors are still dominated bymen. Women and the SMEs they run are relatively
excluded from the technological tools that could
modernize and boost their business models. Thismeans they do not have the same possibilities tofind alternatives, for example, when supply chainsare disrupted as seen now due to the COVID-19
pandemic, or to reach new markets with reliable
payment mechanisms.

SUPPORTING WOMEN ENTREPRENEURS
Many governments have launched COVID-19 stimulus
packages that include specific relief for SMEs. 12
However, some of that relief must be aimed
specifically at women-run SMEs, as these are at greaterrisk of bankruptcy for the reasons outlined above.
A multi-stakeholder approach is needed, wheregovernments work with large businesses, intergovernmental and international organizations andcivil society organizations to: 1) reach out to women
entrepreneurs to identify gender-specific needs;2) strengthen women entrepreneurs’ access tofinancial services and credit; and 3) promote digitaltransformation and flexible business models for
women-owned SMEs.
This approach should be based on establishedframeworks, which can be used to inform genderresponsive implementation of response andrecovery strategies, namely the COVID-19 specific
WHO Strategic Preparedness and Response Plan, andthe Sendai Framework for Disaster Risk Reduction.13
These both explain how to put in place multi-sectoral
partnerships that can minimize the impact ofthe pandemic, including the engagement of theprivate sector.

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KEY EMERGING ISSUES
Women have restricted access to financial
services and credit

Women have less access to informationand communications technology (ICT)

Women generally have less access to formal
finance. Women in developing countries
are 17 percent less likely than men to haveborrowed formally, and in South Asia there isa gender gap of 18 per cent for bank accountownership.14 This translates to less access tocredit lines, and a diminished ability to repay
any debts accrued during the crisis.

In the Asia and Pacific region, 41 percent of
women use the internet, 13 percent age points
less than men. This could make women lesslikely to receive any information disseminatedonline about relief measures.

A study showed that women entrepreneurs
are also less familiar with credit services.15 Thismeans special efforts are needed to ensure they
are aware of financial support in the aftermathof the pandemic, and how to access it.
Male investors are biased against women
entrepreneurs.16 As most investors are men,this puts women at a disadvantage in seeking
funding, which is particularly crucial in thecontext of the COVID-19 crisis.
In developing countries in South-East Asia many
women are self-employed, including those
who run MSMEs in the informal economy.17
These may not be eligible for government-led
COVID-19 initiatives that require verification,such as low-interest loans and tax exemptions.

Women face legal and cultural barriers toowning and controlling assets
Rights to land and property are often registered
to the household or men.18 Women own less than
20 percent of the world’s land.19 Where womendo own assets by law, established cultural norms
and practices may prevent them from controllingand exercising their right to them.
Some self-employed women farmers therefore
cannot apply for mortgages to tie them overduring a crisis, even if they are the ones thatwork the land.
Unless land rights for women are secured, theCOVID-19 outbreak will cost women further
control over their assets and deprive them of
the resilience such control could bring.

In remote and rural areas, internet infrastructureand digital literacy are lacking. This will affectwomen’s ability to conduct business online, inparticular during lockdowns.
Many of the goods and services typicallyprovided by women-run SMEs are less suitablefor e-commerce or their target customers arestill less likely to avail of e-commerce.

Women have fewer network resources
The networks of women entrepreneurs are
generally smaller and less diverse than thoseof their male counterparts.20 This means they
benefit less from the sharing of information
and resources.
There are fewer mentoring opportunities
for women, fewer female role models or
success stories, and women business owners
seem less inclined to interact with businessassociations and networks.21

Women carry out much more unpaid careand domestic work
Women and girls in Asia and the Pacificspend up to 11 times more of their day thanmen and boys on unpaid care and domesticcare work.
Across the world, more than 1.5 billion
children are out of school, increasing theresponsibilities of women who may alreadybe caring for the elderly and the ill.22 The
increased burden can present womenentrepreneurs with a choice between caring
for their loved ones during the lockdowns
at home and keeping their business alive.

KEY RECOMMENDATIONS	
P rovide gender-specific financial support services for women
entrepreneurs, including debt relief, cash inflow, and support related tocare and domestic work, as well as re-skilling to meet current demands
related to health needs (such as medical supplies).

FOR GOVERNMENTS	Boost the access of women entrepreneurs to ICT and financial services,
including through gender-specific low-interest loans, deferred paymentsand tax exemptions.
 emove discriminatory laws, policies and customs that block women’sR
access to and control of financial services, land ownership, and other assets.
 rioritize training, leadership and mentorship programmes for women
Pto help them address the COVID-19 crisis as well as other ongoing
requirements.	Ensure the collection of disaggregated data related to the outbreak bysex, age and disability including related to SMEs in order to identify andeliminate gender-based constraints on women entrepreneurs.	Reach out to women entrepreneurs in remote and rural areas to makesure they are informed about any responses to COVID-19 as well as
opportunities related to stimulus packages and other recovery measures.	Work with communities to develop support services for women
entrepreneurs.	Promote the formalization of informal businesses so that more womenrun SMEs can benefit from financial services and government subsidies.	Ensure that financial service providers address the needs of women
entrepreneurs and refrain from any gender bias.23

 ddress unpaid care and domestic work through subsidized childcare,
Aemployer-supported care services, paid and equitable parental andfamily leave policies, and flexible working arrangements.

FOR BUSINESSES

S upport women-run SMEs in supply chains by guaranteeing payments
and orders and helping them shift to in-demand production.	Provide gender-sensitive financial products and services with reduced
interest rates, flexible pay-back and collateral schemes.
E stablish gender-responsive procurement practices that actively reach
women-run SMEs, including targets for procurement from them.
 artner with women-run SMEs to train women on social marketing andP
digitalization of business. This can include training on planning for future
emergencies.

 equest that gender experts are included in the design and theR
implementation of economic recovery programmes.

FOR DONORS

E nsure that programmes on women’s economic empowerment improvethe capacity of women entrepreneurs, including their access to ICT andfinancial services, and new skills to move up the value chain (e.g. fromlow-skilled labour into technology-enabled sectors).	Focus on the gender-responsive economic recovery for countries mostheavily affected by the COVID-19 crisis.	Monitor the services provided by governments and financial institutions
to ensure women entrepreneurs are treated equally.	Document the experiences of women entrepreneurs including their abilityand barriers to avail of existing services targeted SMEs

FOR CIVIL SOCIETY
ORGANIZATIONS	Advocate with local policymakers for investments in public services thatmeet the needs of women-owned SMEs, including subsidized and quality
child and elderly care	
Reach out to marginalized women entrepreneurs, especially in remote andrural areas, and support them in advocating with policy makers for theirrights to be protected and respected, based on their needs and priorities.
F acilitate peer support to allow women entrepreneurs to juggle thewellbeing of their families and their businesses.	Help women entrepreneurs to establish networks, and support smaller
businesses deal with the crisis.

©shutterstockhttps://www.adb.org/publications/role-smes-asia-and-their-difficulties-accessing-financehttps://www.ilo.org/global/about-the-ilo/newsroom/news/WCMS_739961/lang--en/index.htm
3
https://www.weforum.org/agenda/2020/03/world-travel-coronavirus-covid19-jobs-pandemic-tourism-aviation/
4
https://www.mmtimes.com/news/least-10000-now-unemployed-yangon-garment-sector.html
5https://biz.chosun.com/site/data/html_dir/2020/03/03/2020030300348.html
6	https://www.cgdev.org/publication/impact-coronavirus-chinas-smes-findings-from-esiec
7	Gender Equality and the Sustainable Development Goals in Asia and the Pacific: Baseline and pathways for transformative change by2030. Asian Development Bank and UN Women, 2018. Bangkok: UN Women8	https://www.worldbank.org/en/topic/gender/publication/female-entrepreneurship-resource-point-introduction-and-module-1-why-gender-matters
9https://www.oecd.org/southeast-asia/regional-programme/Strengthening_Womens_Entrepreneurship_ASEAN.pdf
10
https://www.un.org/en/observances/women-and-girls-in-science-day/11	https://www.ilo.org/wcmsp5/groups/public/---asia/---ro-bangkok/---ilo-manila/documents/genericdocument/wcms_721172.pdf
12
http://www.oecd.org/cfe/COVID-19-SME-Policy-Responses.pdf
13
https://www.who.int/docs/default-source/coronaviruse/srp-04022020.pdf and https://www.preventionweb.net/files/43291_sendaiframeworkfordrren.pdf
14
https://globalfindex.worldbank.org/
15
https://asiafoundation.org/2017/11/01/financial-inclusion-women-entrepreneurs/
16
https://www.sciencedirect.com/science/article/abs/pii/S0304405X19301758
17https://www.bot.or.th/Thai/MonetaryPolicy/ArticleAndResearch/FAQ/FAQ_156.pdf
18
https://www.hlrn.org.in/documents/Womens_Land_Rights_in_Asia_Land_Watch_Asia.pdf
19	https://www.weforum.org/agenda/2017/01/women-own-less-than-20-of-the-worlds-land-its-time-to-give-them-equal-property-rights/
20
https://www.oecd.org/cfe/smes/Policy-Brief-on-Women-s-Entrepreneurship.pdf
21
https://asiafoundation.org/2013/02/27/networking-essential-to-women-entrepreneurs-in-asia/
22
https://en.unesco.org/themes/education-emergencies/coronavirus-school-closures
23
https://www.ilo.org/wcmsp5/groups/public/---asia/---ro-bangkok/---ilo-jakarta/documents/publication/wcms_733210.pdf
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Contact:
UN Women Regional Office for
Asia and the PacificUnited Nations Building, 5th Floor. Rajdamnern Nok
Avenue, Bangkok 10200 THAILAND.
Tel: +66 2 288 2093
Fax: +66 2 280 6030

Learn more about the Women’s
Empowerment Principles (WEPs):

www.weps.org

With the support of