sector activity. The allocation of resources within the family is greatly influenced by the perception of roles, where the men are seen as the main, if not the sole bread-earner (even in the cases when they are not).

Moreover, many young women remain inactive because of choice or family pressures. Broader constraints include women’s limited mobility due to socio-cultural reasons. Social traditions **Figure (18): Term of Loan to SMEs by Gender** reduce women’s flexibility to leave the house, reach out to financial institutions, and deal 100 with “strangers”. As a result, women rely more 80 on the informal financial market, which is not sustainable compared to men who have better 60 access to the formal financial market. They are 40 also more likely to draw on funds from family and friends. In Egypt, few women 20 entrepreneurs use commercial banks for credit 0 (around 20 percent), but those who do are Female Owned Male Owned confronted with higher rejection rates (6 percent compared to 4.5 percent for men). **_Source:_** World Bank Enterprise Surveys (2007-2011). The proportion of Egyptian women who complained about collateral requirements was double that of men. Moreover, women entrepreneurs often have access to lower loan term than men (Figure 15).

Hence, gender mainstreaming is crucial, especially post Arab Spring. It has become even more important now to empower Arab women economically as this will allow them to have an equal opportunity to participate in the labor market as an entrepreneur and employer or as an employee. Much remains to be done to translate economic reforms into real positive changes. Promoting an enabling institutional legal and regulatory environment for women’s equal ownership and access to economic resources and assets such as land, finance, and property is essential for economic empowerment. Freeing women and their families from poverty requires strengthening their economic capacity as entrepreneurs, producers, and informal workers so that they can access and shape markets.

Source: Nasr (2010).

Moreover, SME growth potential is constrained by entrepreneurs not being able to access startup or growth capital. SMEs may be denied credit despite having sufficient cash flow or purchase orders, due to collateral requirements. SMEs may only be able to access short-term credit facilities and not the type of financial products they need (such as factoring, leasing, or longer term loans). In general, even in well-functioning financial systems, smaller and younger firms have a harder time getting credit. Even in the context of good credit information, the track record of a new firm is slim. This is why many financiers will find it difficult to evaluate the risk of lending to the enterprise. This leaves start-ups with the options of using the personal assets and credit record of the firm owners to leverage finance; and accessing finance based on their business plan or the potential return to their project.<sup>20</sup> Financing based on business plans or project returns is generally not done by traditional banks, and may require the development of venture capital firms or seed capital funds.

**Figure (19): Percentage of Firms with a Loan, in Selected Countries**

<!-- Start of picture text --> 70<br>60 Micro Small Medium Large<br>50<br>40<br>30<br>20For example, in some developed countries it has been noted that many enterprise start-ups are financed through 20<br>home mortgages and credit cards of the owners. Enhancing access to personal finance can thus encourage<br>entrepreneurship. 10<br>0 20<br>Egypt Syria Yemen Morocco Jordan Lebanon<br>Source: World Bank Enterprise Surveys (2007-2010).<br><!-- End of picture text -->