Internal Factors Affecting Growth of Women-Owned Businesses in Afghanistan

b y M a n i z h a Wa f e q

CONTENT S

26 / / REFERENCES //

4 / / ACRONYMS //

6 / / INTRODUCTION //

14 / / EXTERNAL BARRIERS FOR THE GROW TH OF

WOMEN-OWNED BUSINESSES / /

16 / / METHOD OLO GY AND RESEARCH DESIGN //

18 / / OVERVIEW OF FINDINGS //

20 / / CHALLENGES CITED BY BUSINESS OWNERS //

22 / / CORREL ATIONS BET WEEN INTERNAL BUSINESS

FACTORS AND GROW TH //

12 / / LITER ATURE REVIEW //

24 / / CONCLUSION //

AN AFGHAN WOMEN PREPARES THE FINAL T OUCHES ON A HAND-EMBROIDERED SCARF, IN KANDAHAR . TR ADITIONAL AFGHAN EMBROIDERY IS CALLED KHAMAK. R e p o r t e d i t e d b y D a v i d F o x

P h o t o s a n d l a y o u t b y D a v i d F o x

/ / ACRONYMS // 5

In 2009, internat ional and nat ional organizat ions such as Afghanistan Research and Evaluat ion Unit (AREU), the World Bank, and var ious United Nat ions agencies rea l ized that there was l i t t le avai lable informat ion about the state of women-owned businesses in Afghanistan. Since then, a number of studies have been conducted that have focused on barr iers for women doing business in Afghanistan, such as def ic iencies in inf rastructure, lack of access to markets , and lack of access to f inance. AREU’s ser ies of case studies on the ef fec t of microf inance opportunit ies for women, conducted in var ious provinces of Afghanistan, are good sources of informat ion and ser ve as a basel ine for future studies . The study summarized in this paper set out to bui ld on the work of past research ef for ts to fur ther ident i f y and analyze obstacles to doing business for Afghan women. This study col lec ted and analysed data f rom a sample of 248 randomly selec ted women-owned businesses . The sur vey at the foundat ion of this study recorded each businesses’ geographica l locat ion, s ize , internal operat ional systems

and procedures , employees’ capacity, and the owners’ sk i l l s and knowledge. Data was col lec ted f rom Afghanistan’s f ive major urban centers : Kabul , Mazar- i-Shar i f , Herat , Kandahar, and Ja la labad. The study found that more than 90% of women business owners were educated (having par t ia l ly completed secondar y school at a minimum). Approximately 50% of the owners had a working knowledge of Engl ish and were computer l i terate . Less than 50% of respondents had a standard operat ing system for their business and were fami l iar with qual ity control and f inancia l management systems. Sl ight ly more than 50% did not have business plans or market ing plans , with a l l major tasks conducted by the business owner hersel f .

The overa l l conclusion of the study is that Afghan women-owned businesses have lagged behind their male-owned counterpar ts not only due to external fac tors – such as socio-cultura l gender expectat ions , def ic ient inf rastructure, weak lega l system, lack of access to f inance, and lack of access to markets – but a lso due to their weak internal capacity.

4 / / ABSTR ACT //

ACCI AFGHANISTAN CHAMBER OF COMMERCE AND INDUSTRIESACE AFGHANISTAN CREDIT ENHANCEMENTAISA AFGHANISTAN INVESTMENT SUPPORT AGENCYALCS AFGHANISTAN LIVING CONDITIONS SURVEYAREDP AFGHANISTAN RURAL ENTERPRISE DEVELOPMENT PROGRAMAREU AFGHANISTAN RESEARCH AND EVALUATION UNITAWCCI AFGHANISTAN WOMEN CHAMBER OF COMMERCE AND INDUSTRY CDC COMMUNITY DEVELOPMENT COUNCILCSO CENTRAL STATISTICS ORGANIZATIONDOWA DEPARTMENT OF WOMEN’S AFFAIRSEPAA EXPORT PROMOTION AGENCY OF AFGHANISTANEPD EQUALITY FOR PEACE DEMOCRACYEVAW ELIMINATION OF VIOLENCE AGAINST WOMENGOIRA GOVERNMENT OF THE ISLAMIC REPUBLIC OF AFGHANISTANICAWED INTERNATIONAL CENTER FOR AFGHAN WOMEN’S ECONOMIC DEVELOPMENTIEEW INSTITUTE FOR ECONOMIC EMPOWERMENT OF WOMENLEAD LEADING ENTREPRENEURS FOR AFGHANISTAN’S DEVELOPMENTLSE LONDON SCHOOL OF ECONOMICS MAIL MINISTRY OF AGRICULTURE, IRRIGATION AND LIVESTOCKMOCI MINISTRY OF COMMERCE AND INDUSTRIESMOF MINISTRY OF FINANCEMOFA MINISTRY OF FOREIGN AFFAIRSMOLSAMD MINISTRY OF LABOR, SOCIAL AFFAIRS, MARTYRS, AND THE DISABLEDMOPH MINISTRY OF PUBLIC HEALTHMOPW MINISTRY OF PUBLIC WORKSMOWA MINISTRY OF WOMEN’S AFFAIRSMP MEMBER OF PARLIAMENTMRRD MINISTRY OF RURAL REHABILITATION AND DEVELOPMENTNAP NATIONAL ACTION PLANNAPWA NATIONAL ACTION PLAN FOR THE WOMEN OF AFGHANISTANNGOS NON-GOVERNMENTAL ORGANIZATIONSNRVA NATIONAL RISK AND VULNERABILITY ASSESSMENTNSC NATIONAL SECURITY COUNCILNSP NATIONAL SOLIDARITY PROGRAMPC PROVINCIAL COUNCILSME SMALL AND MEDIUM-SIZED ENTERPRISETAF THE ASIA FOUNDATIONUNAMA UNITED NATIONS ASSISTANCE MISSION IN AFGHANISTANUNDP UNITED NATIONS DEVELOPMENT PROGRAMUNWOMEN UNITED NATIONS ENTITY FOR GENDER EQUALITY AND EMPOWERMENT OF WOMENUSAID UNITED STATES AGENCY FOR INTERNATIONAL DEVELOPMENTWEE WOMEN’S ECONOMIC EMPOWERMENTWIE WOMEN IN ECONOMY

ACRONYMS

ABSTR ACT

PHOTO LEFT: AN AFGHAN BUSINESSWOMAN INSPECTS A GEMSTONE-INFUSED RING, KABUL

/ / INTRODUCTION // 7

CHAPTER 1 : INTRODUCTION

Since 2002, with the establ ishment of the inter im government of the Is lamic Republ ic of Afghanistan and the star t of post-Tal iban reconstruct ion and development , both the Afghan Government and the internat ional community have made women’s empowerment one of their major areas of focus . Afghan women have been provided opportunit ies to par t ic ipate in the socia l , pol it ica l , cu ltura l , and economic spheres of l i fe in Afghanistan, a sharp contrast to the years of complete female margina l izat ion under the Tal iban reg ime, f rom 1996 to 2001.

Internat ional and governmenta l support for Afghan women had one notable shor tcoming, though, according to a report f rom the Afghanistan Research and Evaluat ion Unit (AREU). AREU’s Women’s Economic Empowerment 2002-2012 Situat ional Analys is Report f indings indicated that a major ity of the development sec tor’s inter vent ions focused only on g ir ls’ and women’s educat ion, lega l and socia l r ights , access to just ice , pol it ica l and cultura l par t ic ipat ion, with far less emphasis on economic empowerment (Ganesh, 2013) .

6 / / INTRODUCTION //

In terms of economic empowerment of women, only ver y shor t- term income generat ion projec ts were implemented. In addit ion, a number of business t rainings were conducted for women to introduce them to the bas ic concepts of business management , including how to write a business plan and manage business f inances . These development init iat ives resulted in a margina l number of Afghan women launching businesses in major c it ies . According to AREU’s Women’s Economic Empowerment repor t , women-owned businesses account for only 5% of a l l l icensed businesses in Afghanistan. These l icensed businesses range f rom micro to smal l and medium-sized businesses , with the major ity of these businesses involved in handicraf ts and food process ing . A notable number of women-owned businesses have a lso emerged in the ser vice industr y, specia l iz ing in such areas as educat ion and consult ing . Three sec tors with att ract ive opportunit ies for female entrepreneurs and investors are restaurants , informat ion and technolog y ser vices , and travel ser v ices . (LEAD, 2016) .

Many Afghan women-owned business have stagnated, reg ister ing l it t le to no growth over severa l years . This rea l ity does not bode wel l for Afghanistan’s future ; the growth of women-owned businesses is of cr it ica l importance, not only for the women entrepreneurs themselves but a lso for the nat ion’s overa l l abi l ity to grow its economy and generate employment opportunit ies . A large number of women-owned businesses have sustained their businesses for many years with hopes of expanding, but u lt imately ended up making l it t le progress . There is a dire need to help them cont inue sustaining and growing their businesses in order to intensi f y loca l industr y and job creat ion. When barr iers to economic par t ic ipat ion of women are e l iminated, labor par t ic ipat ion and product iv ity can increase up to 25% in some countr ies (World Bank, Gender Report , 2012) .

PROB L E M STAT E M E N T:The major ity of women-owned businesses in Afghanistan are smal l and medium-sized enterpr ises (SMEs) (But ler, 2013) . According to a 2017 ar t ic le in the London S chool of Economics Business Review blog , t i t led “Developing a new

f ramework for smal l business success”, SMEs are e f fec t ive instruments to generate employment and promote economic growth. As most Afghan women-owned businesses can be broadly categor ized as SMEs, their growth chal lenges should be addressed.

Many of the chal lenges that women-owned businesses face in Afghanistan, in terms of external fac tors , have been researched. In many cases , pol ic y and program recommendat ions have been developed to address these external cha l lenges . For the sake of c lar ity, the external cha l lenges referenced throughout this study are l i s ted below :

• Infrastructure (ut i l i t ies and transportat ion networks)

• Business environment ( lega l and regulator y)

• Access to f inance ( investors and commercia l /microf inance lenders)

• Access to high-qual ity t raining and educat ional programs

• Access to markets and l inkages for long-terms business re lat ions

• C onser vat ive socio-cultura l v iews on women’s ac t iv it ies outs ide the household

More detai led descr ipt ions of each of these cha l lenges , with recommendat ions to address them, are provided in the l i terature review and recommendat ions sec t ions .

This study addresses the dear th of data on the internal fac tors that inhibit the growth of women-owned businesses , such as the business owners’ personal att r ibutes and organizat ional att r ibutes . Up unt i l this point , when the growth or success of a women-owned business was discussed, only external fac tors were considered. This is an unfor tunate overs ight , as the growth of SMEs are af fec ted by a combinat ion of three fac tors : the abi l ity of indiv idual owners/execut ives , organizat ional st rength, and environmenta l (external) fac tors (LSE, 2017) .

With this in mind, it i s important to look at the internal fac tors that cause women-owned businesses to stagnate, of tent imes reg ister ing l it t le growth over severa l years . The categor y of internal fac tors that wi l l be assessed in this study include the fol lowing:

PHOTO LEFT: A YOUNG WOMAN PREPARES HAND-KNOTTED CARPETS, KABUL

/ / LITER ATURE REVIEW // 98 / / INTRODUCTION //

1. O wners’ sk i l l and level of mot ivat ion2. Employee/workers’ sk i l l s3 . Internal operat ional procedures4. Internal resources to support growth of

the businesses5 . Qual ity of the products and ser vices

To conclude this sec t ion and emphasize again the importance of this type of research, i t i s worth quot ing a 2006 World Bank report on women’s economic empowerment . The repor t states , “Making key markets work in more gender equitable ways can s igni f icant ly raise women’s product iv ity and incomes and contr ibute to economic growth” (World Bank, 2006: p.14) . In the context of Afghanistan, this statement is par t icular ly re levant consider ing the urgent need for both genders to contr ibute to sustainable economic development .

R E SE A RC H OB J E C T I V E S : The object ives of this study are as fol lows:

• To understand how internal fac tors re lated to the business owner and the business it se l f inf luence prospects for women-owned businesses in Afghanistan

• To come up with a set of recommendat ions for future research, consider ing that the lack of avai lable data on women-owned businesses in Afghanistan is an impediment for ev idence-based program development and pol ic y-making

• To come up with a set of recommendat ions for program development and pol ic y-making that support the growth of women-owned businesses

This leads us to the overa l l research quest ion, which is detai led in the proceeding sec t ion.

R E SE A RC H QU E ST ION :

What are the internal obstacles to grow th for women-owned businesses in Afghanistan?

The external barr iers that inhibit /prevent the launch and growth of a business were covered in the previous sec t ion. These barr iers have been studied quite extensively in the Afghan context . This study, in contrast , focuses on the internal fac tors that contr ibute to the success or fai lure

of women-owned businesses . These fac tors are as fol lows:

1 . O wners’ sk i l l and level of mot ivat ion2. Employee/workers’ sk i l l s3 . Internal operat ional procedures4. Internal resources to support growth of

the businesses5 . Qual ity of the products and ser vices

A s imi lar study was conducted in 2013 in the United States for the Nat ional Women’s Business C ounci l . The research analyzed the fac tors inf luencing women-owned businesses’ growth. The fac tors were def ined as three att itudinal areas associated with the business owner’s r isk-taking abi l ity, mot ivat ion to grow the business , and expectat ions for growing her business (Publ ic Pol ic y Associates , 2013) . The repor t establ ished a direc t re lat ionship between these fac tors and the growth of women-owned businesses . The f ive internal var iables of this study can a lso be categor ized as personal and enterpr ise , according to LSE’s Business Review ar t ic le , “ Towards a new f ramework for SMEs success : a l i terature review”. Personal fac tors that can inf luence business success and growth include var iables such as business owners’ personal qual it ies (e .g . age, gender, level of mot ivat ion, and leadership abi l ity) , acquired ski l l s , exper ience, and background. Enterpr ise fac tors consist of such var iables as st ructura l management capabi l it ies , f inancia l and human resources , l inks to internat ional markets , market and product development , market ing , and strateg ic planning.

Har vard Business Review a lso set out in 2017 to ident i f y fac tors that impact business growth, in an ar t ic le t it led “ The f ive stages of smal l business growth”. The author of the piece ident i f ies the fol lowing fac tors , four re lated to the business it se l f and four re lated to the business owners .

The four fac tors re lated to the business owner (personal fac tors) are :

1 . O wner’s goa ls for himsel f or hersel f and for the business

2 . O wner’s capacity to under take such cr it ica l tasks as market ing , innovat ive product development , product ion, and

distr ibut ion management 3 . O wner’s manager ia l abi l ity and

wi l l ingness to delegate responsibi l ity and to manage the ac t iv it ies of others

4 . O wner’s s t rateg ic abi l it ies , in terms of looking beyond the present and matching the st rengths and weaknesses of the company with her goa ls

The four fac tors re lated to the business/company itse l f (enterpr ise fac tors) are :

1 . F inancia l resources , including avai lable cash and borrowing power

2 . Human resources , re lat ing to the number, depth, and qual ity of people employed by the business , par t icular ly at the management level

3 . Systems resources , in terms of the

Afghanistan is a landlocked countr y that connects S outh Asian countr ies with C entra l Asia and China. Afghanistan’s economy has so far been agr iculture-based, with agr icultura l outputs account ing for around 23% of the countr y ’s GDP. The industr ies and ser vice sec tors contr ibute approximately 21% and 51% percent , respect ively (Afghanistan at a g lance, CSO, 2016-17) .

According to t rade data publ ished by the C entra l Stat ist ics Of f ice of Afghanistan (2016-17) , exports in 2016 stood at $596.5 mi l l ion, with tota l imports of around $6,534.1 mi l l ion. Major export commodit ies were carpets , f resh f ruits , dr ied f ruits , spices , cashmere, and raw cotton. The exist ing data on trade and economic output is not gender disaggregated.

A number of studies have been conducted on women-owned businesses and women’s economic empowerment/opportunit ies in Afghanistan by the Afghanistan Research and Evaluat ion Unit (AREU), Equal ity for Peace and Democrac y (EPD), Bui lding Markets , Microf inance Investment Faci l ity for Afghanistan (MISFA), IS Academy, Leading Entrepreneurs for Afghanistan’s Development (LEAD), and the Internat ional C enter for Afghan Women’s Economic Development (ICAWED), to ment ion but a few.

degree of sophist icat ion of informat ion, planning, and control systems

4. Business resources , including customer relat ions , marketshare, suppl ier re lat ions , manufactur ing and distr ibut ion processes , technologica l advantages , and reputat ion

This study considered the f ramework for business success out l ined by the above-ment ioned LSE and Har vard publ icat ions , whi le a lso col lec t ing data on the growth fac tors for women-owned businesses in Afghanistan. The f ina l result i s a contextua l f ramework i l lustrat ing the important e lements for growth for women-owned businesses in Afghanistan, which is presented in the concluding chapter of this document .

The exist ing l i terature on this topic provides an over view of the condit ion of women-owned businesses , and what the Afghan Government , internat ional community, and NGOs have done to support these businesses .

Most of the research was of an explorat ive nature, with both qual itat ive and quant itat ive data col lec ted. For quant itat ive data , there was a heavy rel iance on publ icat ions by the C entra l Stat ist ics Organizat ion of Afghanistan, World Bank, and UNDP.

Although there is a genera l def ic ienc y of gender disaggregated data for many sectors in Afghanistan, the fol lowing paragraphs present an over view of women’s par t ic ipat ion in di f ferent sec tors :

In 2016, the Afghanistan Investment Support Agenc y (AISA) – the Afghan Government’s business l icensing author ity ( later merged with the Afghanistan C entra l Business Registr y) – had reg istered a tota l of 44 ,838 domest ic and 3 ,307 internat ional companies , of which only around 3% were owned by women (AISA’s Business Database, 2016) . 78% of women’s par t ic ipat ion in the economy has been in the form of smal l businesses (1-10 employees) (But ler, 2013) .

CHAPTER 2 : LITER ATURE REVIEW

10 / / LITER ATURE REVIEW //

Afghanistan was ranked 42 out of 189 countr ies in 2017 in star t ing a business , by the World Bank’s Ease of Doing Business index, whereas this ranking was 38 in 2016. On average, i t takes 3 days for men and 4 days for women to process the l icense for a business . In the same index, Afghanistan was ranked 189 among 190 countr ies in providing appropr iate provis ions to protect minor ity shareholders (World Bank, 2017) .

One of the repor ts that provides usefu l quant itat ive data was conducted by Leading Entrepreneurs for Afghanistan’s Development (LEAD), a businesswomen’s associat ion. In 2016, LEAD publ ished a two-page over view document that included an infographic summariz ing the cha l lenges that women-owned businesses face, a long with recommendat ions to address these cha l lenges . The f indings were based on informat ion g leaned f rom around 700 women-owned businesses in LEAD’s database.

The major ity of women-owned businesses are located in Kabul province, fol lowed by Herat and Balkh. These businesses have made investments tota l ing $66.8 mi l l ion, and have created around 40,000 jobs , of which 55% are held by men and 45% by women. Of these women business owners , 538 have star ted their businesses f rom their savings (sel f - funded) , and the rest have turned to women’s economic empowerment projec t grants to star t their businesses . Few have used loans . Types of businesses include handicraf ts , food process ing , manufactur ing , educat ion, hea lthcare ser vices , construct ion, informat ion and technolog y, and carpets . The emerging non-tradit ional sec tors for women are informat ion technolog y, media product ion, and travel ser v ices (LEAD, 2016) .

Barr iers women-owned businesses face are lack of access to f inance, poor inf rastructure, insuf f ic ient business development support , and lack of business networks . The most preva lent barr iers are conser vat ive socio-cultura l expectat ions and taboos (EPD, 2015) .

Many studies related to women-owned businesses have under taken a review of secondar y data , a review of l i terature (e .g . Afghan Government pol ic ies , laws, and development sec tor program documents) , and col lec ted pr imar y data through inter views and focus group discuss ions . More than 35 repor ts , ar t ic les , and academic papers

were reviewed for this study.

The sources conf irm that women-owned businesses are v ita l to the economic development of Afghanistan; they generate jobs for both men and women, whi le a lso creat ing female role models for the next generat ion of young women interested in enter ing business . This second ef fec t i s cr it ica l for Afghanistan’s economic future, as women must be fu l ly engaged in the economy – as both laborers and business founders – in order for the nat ion to reach its fu l l potent ia l . As The Economist proclaimed in a 2006 ar t ic le , “Forget China, India , and the internet : economic growth is dr iven by women” (The Economist , 2006) .

Exist ing sources have conf irmed that Afghan Government st rateg ies and pol ic ies have provided few incent ives for both men and women to increase investments and expand their business ac t iv it ies . This appl ies across a l l sec tors of the Afghan economy.

The disproport ionately low number of Afghan women-owned businesses is hardly surpr is ing , consider ing Afghanistan’s conser vat ive socio-cultura l environment . Afghan women face a number of major barr iers in their day-to-day l i fe , in terms of gett ing an educat ion, working outs ide their homes, and being perceived as competent enough to run their businesses .

C onsider ing the wel l -documented barr iers for Afghan women-owned businesses , there is a v ita l need to sca le-up these businesses through specia l pol ic ies and provis ions . As a component of this study, a number of recommendat ions are presented in the concluding chapter of this document .

/ / EXTERNAL BARRIERS FOR THE GROW TH OF WOMEN-OWNED BUSINESSES / / 11

By reviewing exist ing l iterature, we can ident i f y a number of major barr iers to the growth of Afghan women-owned businesses . As explained in the introductor y chapter of this document , this study wi l l be breaking new ground by col lec t ing data on the internal barr iers to growth for women-owned businesses . The methodolog y and f indings of this data col lec t ion ef for t are presented in Chapters 4 and 5 , respect ively.

With that noted, i t i s s t i l l important to provide readers with a detai led summar y of the external barr iers that exist for female business owners , i .e . those fac tors that exist outs ide of their control . This chapter wi l l provide an informat ive over view of these external fac tors .

S O C IO - C U LT U R A L E N V I RON M E N T In many fami l ies and communit ies in Afghanistan, there is res istance to the concept of women working outs ide the home. According

to the Asia Foundat ion’s Sur vey of the Afghan People (2016) , acceptance for women’s work outs ide the home has decl ined over the past two years . In par t icular, society ’s percept ion of female entrepreneurs was highly negat ive (EPD, 2015) .

When it comes to f inancia l independence and ownership of proper ty, the interpretat ion of Is lamic L aw pract iced in Afghanistan dic tates that Afghan women are to be g iven the r ight to maher , an amount of capita l that must be paid at the t ime of marr iage, or at least agreed upon at the t ime of marr iage. In the event of divorce, any outstanding ba lance of maher must be provided to the woman, on pain of cr iminal prosecut ion. When it comes to inher itance f rom parents , conser vat ive v iews of Is lamic L aw require that brothers be g iven a disproport ionately larger share in comparison to s isters . In Afghanistan, women of ten f ind themselves denied maher ,

PHOTO, BELOW LEFT: AFGHAN WOMEN-MADE JEWELRY, FOR SALE AT BABUR GARDEN, KABUL

PHOTO, BELOW RIGHT: CARPETS ON SALE IN MENDAWI, KABUL

CHAPTER 3 : EXTERNAL BARRIERS FOR THE GROW TH OF WOMEN-OWNED BUSINESSES

AN AFGHAN WOMAN SORTS RAISNS AT A PROCESSING FACILITY IN WEST KABUL

12 / / EXTERNAL BARRIERS FOR THE GROW TH OF WOMEN-OWNED BUSINESSES / /

as wel l as any form of inher itance f rom deceased parents (DROPS, 2016) .

Thus, women remain economica l ly dependent on male re lat ives and are consequent ly more vulnerable when under taking a business venture. Afghan women who own businesses do not have the advantage of us ing fami ly proper ty to access loans and have di f f icu lty amassing enough capita l for large projec ts in order to launch or grow a business .

In the last decade and a ha l f , the Afghan Government has taken severa l s teps to address some of these socio-cultura l norms that l imit women’s access in the pol it ica l , economic, and cultura l arenas . These steps include rat i f y ing the C onvent ion on the E l iminat ion of a l l forms of

Discr iminat ion Against Women (CEDAW) in 2004, and launching the Nat ional Act ion Plan for Women of Afghanistan (NAPWA). Other important steps have been the enactment of the E l iminat ion of Violence Against Women (EVAW) L aw, and the Nat ional Act ion Plan for the United Nat ion’s S ecur ity C ounci l’s Peace and S ecur ity 1325 C onvent ion (NAP 1325) . Al l of the ment ioned pol ic y documents – i .e . CEDAW, the EVAW L aw, and NAP 1325 – have provis ions that ensure women’s access to economic resources , such as fami ly ’s proper ty (NAPWA 2008) .

CEDAW’s Art ic le Three, br ief ly stated, obl iges the State to do the fol lowing:

"State par t ies sha l l take in a l l f ie lds , in par t icular in the pol it ica l , socia l ,

/ / EXTERNAL BARRIERS FOR THE GROW TH OF WOMEN-OWNED BUSINESSES / / 13

economic and cultura l f ie lds , a l l appropr iate measures , including leg is lat ion, to ensure the fu l l development and advancement of women, for the purpose of guaranteeing them the exercise and enjoyment of human r ights and fundamenta l f reedoms on a bas is of equal ity with men.” (CEDAW, 2004: p.2)

The EVAW L aw was the f i rst enforced law in the histor y of Afghanistan aimed at support ing foundat ional women’s r ights , to include their r ight to inher itance and proper ty (DROPS, 2016) . In addit ion, NAPWA has ser ved as a high- level benchmark that aims to ensure cont inuity and consistenc y in the government’s e f for ts to protect women’s r ights within Afghan society v ia the promotion of equal ity and empowerment . NAPWA focuses on three pi l lars :

1 . S ecur ity 2 . Governance, Rule of L aw, and Human

Rights 3 . Economic and S ocia l Development

Although NAPWA contains ef fec t ive st rateg ies and is painstakingly detai led, i t s implementat ion has been less successfu l in fu l f i l l ing what was expected of i t . Cr it ics of NAPWA’s implementat ion have pointed to incompetenc y at the Ministr y of Women’s Af fairs (MoWA) – the pr imar y ministr y tasked with overseeing the plan – for not taking proper ownership of NAPWA. Other reasons c ited for the lack of NAPWA’s success include a lack of pol it ica l wi l l and a lack of capacity v is-à-vis gender and gender mainstreaming concepts within a l l re levant and responsible ministr ies (MoWA, 2013) .

Under Afghan law, women and men have equal r ights and responsibi l it ies . The Afghan const itut ion guarantees equal ity and states that the ent ire const itut ion and a l l i t s provis ions apply to both women and men on equal terms. Addit ional ly, i t recognizes that women and men benef it f rom equal opportunit ies in a l l areas of l i fe . This sets the stage for equal ity and non-discr iminat ion as mandator y pr inciples that must be obser ved in the appl icat ion of the Afghan const itut ion and laws (DROPS, 2016) .

SE C U R I T Y Insecur ity negat ively impacts a l l economic sec tors and can be disrupt ive to business

operat ions and damaging to overa l l psychologica l wel l -being . UNAMA reports that geographica l ly, Kabul province had the highest number of c iv i l ian casualt ies due to suic ide and complex attacks taking place in Kabul City, fol lowed by Helmand, Kandahar, Nangarhar, and Uruzgan provinces (UNAMA, 2017) .

Due to the lack of secur ity, many investors , business owners , and their re lat ives fe lt compel led to f lee the countr y (Akbar i , 2016) . Insecur ity, weak governance, pover ty, lack of pol it ica l s tabi l ity, unemployment , high levels of corrupt ion, and a lack of government accountabi l ity have caused c it izens not only to lose interest in their countr y ’s economic development , but a lso seek out the means to leave Afghanistan a ltogether (Akbar i , 2016) .

When the Nat ional Unity Government was establ ished in late 2014, the expectat ion was that the leadership of the new government would take steps to increase foreign and domest ic investments . These investments have never mater ia l ized, largely as a result of the fai lure of the Government to address the insecur ity issues . Tensions among Afghanistan’s var ious pol it ica l fac t ions has a lso contr ibuted to an environment of instabi l ity (Akbar i , 2016) .

I N F R AST RU C T U R E A N D BU SI N E S S E N V I RON M E N T There are a number of inf rastructure and business environment cha l lenges discussed in this sec t ion. The lack of proper inf rastructure in Afghanistan af fec ts ever yone invest ing and doing business across a l l sec tors of the Afghan economy. The negat ive impact of poor inf rastructure is compounded for women-owned businesses , as these businesses are over whelmingly micro or smal l and thereby lack the necessar y capita l to pay for work-arounds (e .g . backup elec tr ic ity generators) to inf rastructure def ic iencies .

This sec t ion wi l l provide a summar y of Afghanistan’s most cr ippl ing inf rastructure def ic iencies that create barr iers for Afghan women-owned businesses .

Costly and Erratic Electricity Supply: Afghanistan imports 4 ,399 mi l l ion kw/h f rom Turkmenistan, Taj ik istan, Uzbekistan, and Iran, and only produces 1 ,077 mi l l ion kw/h

domest ica l ly. Although Afghanistan’s e lec tr ic ity consumption is only 2 ,866 mi l l ion kw/h, the Government has not been able to direc t the extra capacity to industr ia l parks and businesses in Afghanistan (Afghanistan at a Glance by CSO, 2016-17) . Such high dependence on imported e lec tr ic ity puts Afghan res idences and businesses in a precar ious posit ion, especia l ly for women-owned businesses that are of ten based in the home and cannot af ford a backup generator. As a consequence, when there is a cut in the Government-suppl ied e lec tr ic ity, product ion is ha lted at many micro and smal l Afghan businesses .

During the winter of 2017-18, regular ly scheduled rol l ing blackouts were init iated by the Kabul City municipa l ity, which at least a l lowed businesses to plan their product ion schedule around the expected avai labi l ity of e lec tr ic ity. That has not a lways been the case. In both the winters of 2015-16 and 2016-17, there were extended power cuts last ing severa l weeks , due to damage to t ransmiss ion l ines (Bashardost , 2017) .

Insufficient Transportation NetworkAfghanistan’s est imated exist ing roads tota l around 39,855,000 k i lometers , with only around 400,000 k i lometers of that number paved with asphalt . Around 2 ,350,000 k i lometers are sand-topped roadways (CSO, 2016-17) . Paved roads make up only around 1% of a l l roadways in Afghanistan. L AC K OF I N DU ST R IA L PA R K S There are only e ight funct ional industr ia l parks in the major c it ies of Afghanistan, with 11 more under construct ion. It was documented in a repor t by Equal ity for Peace and Democrac y that AISA and MoCI have worked on introducing incent ive packages for women entrepreneurs to run their SMEs in industr ia l parks . To date, these incent ive packages do not appear to have mater ia l ized.

H IG H R AT E OF TAX AT ION A N D M U LT I PL E S OU RC E S OF TAX C OL L E C T ION In Afghanistan, municipa l it ies of ten col lec t taxes f rom smal l-sca le producers and ser vice providers that have a publ ic ly open shop or of f ice , even i f the business owner provides documentat ion proving they have a lready cleared a l l lega l ly obl iged taxes with the Ministr y of Finance (LEAD, 2016) . The Ministr y of Finance requires that businesses pay a 4% tax on gross revenue (before prof its) , and 2% on net income (prof it ) (Afghan Income Tax L aw, 2015) .

L AC K OF F E M A L E R E PR E SE N TAT ION I N G OV E R N M E N TGovernment of f ices lack women at a l l levels , especia l ly in the area of pol ic y-making. B elow Figure 3 was reproduced based on the CSO’s Afghanistan’s at a Glance 2016-17 repor t , which shows women represent ing only 10.7% of decis ion-making posit ions in government . According to the same source, women make up around 20.5% of government employees . It i s worth not ing that this f igure includes a substant ia l number of female teachers and female daycare center employees . In many of f ices providing cr it ica l ser v ices to businesses , such as l icensing and taxat ion, women are barely v is ible .

According to an ar t ic le on the Afghan economy publ ished by the Organizat ion for Pol ic y Research and Development Studies (DROPS), there is a need for women to get involved in government on the pol ic y level . At the ver y least , men in government should be t rained and made aware of the needs of women. Other wise, decis ion-making in economic development issues wi l l be dominated by men, with the result ing pol ic ies and programming disadvantaging women-owned businesses (Women Publ ic Pol ic y Journal , Volume 2 , 016) .

Another area of weakness for women-owned businesses , as documented by Mashal (2015) , i s that economic pol ic y-making remains

14 / / EXTERNAL BARRIERS FOR THE GROW TH OF WOMEN-OWNED BUSINESSES / / / / EXTERNAL BARRIERS FOR THE GROW TH OF WOMEN-OWNED BUSINESSES / / 15

dominated by men. Women are not represented in decis ion-making at cr it ica l inst itut ions such as the Afghanistan Chamber of C ommerce and Industr y and the Afghanistan Investment Support Agenc y.

L AC K OF I N C E N T I V E S F OR WOM E N -OW N E D BU SI N E S SE S I N L AWS A N D PRO G R A M S Analys is of the laws and programs in Afghanistan have found that most lack any type of specia l provis ions for women (DROPS, 2016) . Sarabi , in her ar t ic le in DROPS Women Publ ic Pol ic y Journal (Volume 2 , 2016) states that :

"Women are not taking up entrepreneurship in adequate numbers because they feel constrained. However, a major shi f t has been brought with the introduct ion of the Publ ic-Pr ivate-Par tnership (PPP) concept in Afghanistan. The Cabinet of Afghanistan endorsed the PPP law in S eptember 2016 which a l lows joint ventures by pr ivate companies and the Afghan government in var ious sec tors , mainly inf rastructure and ser vices . Investments less than USD 5 mi l l ion wi l l not be considered under the PPP contract and the threshold for smal l sca le investments

is set between $5 mi l l ion to $75 mi l l ion. The C entra l Par tnership Author ity (CPA) is a newly establ ished unit in the Ministr y of Finance (MoF) to administer and faci l i tate the PPP process . According to the CPA, many women-run smal l businesses are unable to invest under the PPP model . However, the law makes provis ions for fac i l i tat ion of f inances in the form of issuance of guarantee le tters by the Government to a bank, once a PPP concept has been approved by the Government . This incent ive, i f put into pract ice , can maximize women's role to a s igni f icant sca le .” (p.37)

Except for the PPP L aw that provides an incent ive for women, other laws, such as the Investment L aw, Banking L aw, Income Tax L aw, and Procurement L aw, do not contain any incent ives for women-owned businesses . The L abor L aw contains ar t ic les that protect women employees f rom discr iminat ion and provides shor ter hours of work for pregnant women, but this i s not re levant for women employers (Afghan L abor L aw, 2007) .

HIGH-END AFGHAN WOMEN -MADE JEWELRY

Table 1: Decision-Making in AfghanistanGovernment Private Sector Development Sector

Male Female Male Female Male Female

90.4% 9.6% 89.3% 10.7% 79.7% 20.3%

/ / EXTERNAL BARRIERS FOR THE GROW TH OF WOMEN-OWNED BUSINESSES / / 1716 / / EXTERNAL BARRIERS FOR THE GROW TH OF WOMEN-OWNED BUSINESSES / /

AC C E S S T O F I NA N C EAccess to f inance is another area that previous studies have ident i f ied as one of the major barr iers for the growth of women-owned businesses . Women have c ited the fol lowing reasons for not having access to credit ( ICAWED, 2015) :

• No avai lable col latera l for loans• No banks in geographica l proximity• L ack of knowledge on how to access

credit• L ack of credit histor y

Finance is Afghanistan’s second-largest ser v ice industr y (af ter te lecommunicat ions) and is potent ia l ly an important dr iver of pr ivate investment and economic growth. Yet , due to high interest rates , investors rarely turn to the banks to fu l f i l l their capita l requirements . The di f f icu lty in access ing credit through banks and other formal f inancia l inst itut ions

makes exist ing f i rms dependent on fami ly funds and retained earnings , thereby l imit ing opportunit ies for entrepreneur ia l ism. It a lso re inforces dependence on the informal f inancia l sec tor, which retards Afghanistan’s economic modernizat ion ( Jef f rey, 2015) .

Other fac tors to consider when assess ing the f inancing prospects of Afghan women-owned businesses include the fol lowing:

• L ack of f inancing sources and long-term loans : There are around eight microf inance inst itut ions and micro-lending banks in Afghanistan (AMA website , 2017) . Unfor tunately, their loan packages do not meet the range of f inancing needs for smal l and medium-sized businesses owned by women.

• L ack of access to col latera l and high interest rates : C ompared to their male-owned counterpar ts , Afghan

women-owned businesses are of tent imes s igni f icant ly smal ler. As such, they cannot af ford the interest and/or muster the col latera l for a commercia l bank loan (EPD, 2015) . The interest rates at the commercia l banks are between 12-17%, and between 17-25% at the microf inance inst itut ions (LEAD, 2016) .

• L ack of access to Afghan Government and donor contracts : Women-owned businesses are of tent imes overlooked dur ing the procurement processes of Government agencies and donor inst itut ions . This can be att r ibuted to corrupt ion, not having the r ight connect ions , and a bas ic lack of t rust in women to del iver products and ser vices (LEAD, 2016) .

S ome specia l measures , such as sett ing as ide contracts for women-owned businesses , can improve this s ituat ion. A usefu l example of a s imi lar measure is the Afghan First pol ic y, adopted by the US mi l itar y in 2008 and later by the North At lant ic Treaty Organizat ion (NATO) in 2010. This pol ic y committed internat ional mi l itar y forces in Afghanistan to procure goods and ser vices loca l ly, whenever poss ible . This brought a large, mult i - faceted buyer direc t ly to domest ic producers , and thereby helped sustain and grow loca l businesses . According to USAID, the Afghan First pol ic y supported the employment of 85 ,650 Afghans through its re lated contracts , between 2008 and 2010 (Gheyasi and Zhou, 2015) .

C orrupt ion, not only in the Government but a lso in the non-governmenta l of f ices , has made it extremely di f f icu lt for women to access contracts . C orrupt ion, especia l ly br iber y in the form of k ickbacks for contract awards , i s rampant in both Government and internat ional organizat ions . Women have ranked br iber y as the four th most severe barr ier for their business , in a sur vey by EPD.

M A R K ET I N G A N D AC C E S S T O M A R K ET S A number of def ic iencies re lated to market ing cont inue to hamper the growth of women-owned businesses . Although Afghan women have been supported when it comes to par t ic ipat ing in nat ional and internat ional exhibit ions , l i t t le e f for t has been made to work with female producers to improve their product and help them secure long-term business dea ls .

The below issues were ident i f ied by LEAD in discuss ions with women business owners about the cha l lenges they face in this area :

• L ack of access to buyers : Women-owned businesses of ten make sa les through exhibit ions loca l ly and internat ional ly. This g ives them the opportunity to make one-t ime sa les but does not provide an opportunity to substant ia l ly improve their products and develop a network of long-term buyers . In genera l , women are disproport ionately under-represented at exhibit ions (LEAD, 2016) .

• L ack of modern machiner y : This shor tcoming is especia l ly re levant in the area of food process ing and packaging, in that Afghanistan has an abundance of raw agr icultura l outputs but l imited capacity to conver t this raw mater ia l into profess ional ly processed and packaged products for retai l sa le . Sub-standard product ion and packaging are the pr incipa l impediments for women-owned businesses (LEAD, 2016) .

• L ack of an ent ity to advise women on market ing and conduct market research: Knowledge about markets and the capacity to conduct market research is another area in which Afghan women business owners are weak. There are no organizat ions that provide rel iable , ac t ionable data about markets and provide market research consult ing for women-owned businesses . In study af ter study on this topic , Afghan women business owners have noted a dire need for such ser vices , to provide them strateg ic market ing and market research advice on a long-term basis (LEAD, 2016) .

When it comes to access ing market informat ion (and informat ion in genera l) , Afghan women face many chal lenges due to conser vat ive socio-cultura l v iews. As Ganesh states in her repor t on Afghan Women’s Economic Empowerment (2013) , a des ignated space for women’s economic ac t iv ity is urgent ly required in both rura l and urban areas . Afghan men can meet anywhere and anyt ime, a l lowing them to exchange t imely informat ion on business , economics , and pol it ics . Afghan women, in contrast , are of ten restr ic ted to the home due to the lack of cu ltura l ly acceptable places to congregate.

AFGHAN WOMEN ARE HEAVILY INVOLVED IN HARVESTING AND PROCESSING SAFFRON. MORE AFGHAN BUSINESSWOMEN ARE NOW TRYING TO ENTER THE INDUSTRY AS EXPORTERS.

/ / METHOD OLO GY AND RESEARCH DESIGN // 1918 / / EXTERNAL BARRIERS FOR THE GROW TH OF WOMEN-OWNED BUSINESSES / /

Women-only business and community spaces could address a range of needs , by ser ving as t raining centers , product ion areas for income-generat ing ac t iv it ies , s torage spaces for the products of such act iv it ies , hubs for women’s communal prayer, hea lth check-up areas for women, female shura centers , and so on (Ganesh, 2013) .

BU SI N E S S DEV E LOP M E N T SE RV IC E S A N D T R A I N I N GDespite copious amounts of t raining programs focused on Afghan businesswomen, largely funded by internat ional organizat ions , the des ign, implementat ion, and outcomes of the t raining has le f t something to be des ired (LEAD, 2016) . Speci f ica l ly, there has been a notable lack of long-term business management and business development t raining programs for women. This sec t ion wi l l cover some of the larger sca le programs intended to grow the capacity of Afghan businesswomen.

The Afghan Government , with the help of USAID’s Assistance in Bui lding Afghanistan by Developing Enterpr ises (ABADE) projec t , put together the f i rst Women’s SME Development Act ion Plan in 2015. The plan’s objec t ive was to provide a roadmap for women-owned SME development that addressed exist ing chal lenges . The plan’s implantat ion t imel ine spanned f rom 2015 to 2017, with a number of key business sec tors ident i f ied as pr ior it ies . These pr ior ity sec tors included agr ibusiness , carpets , construct ion, j ewelr y, gemstones , and marble (Afghan Ministr y of C ommerce and Industr ies , 2015) .

Another recent init iat ive is the f i rst Women’s Economic Empowerment Nat ional Pr ior ity Program (WEE NPP), launched on 8 March 2017. The WEE NPP is a fair ly comprehensive document that addresses the needs of Afghan women par t ic ipat ing in the economy. The s ix foca l areas are l i s ted below :

• S ect ion 1 : Cal ls for the col lec t ion of gender-disaggregated economic data in order to enable informed pol ic y and decis ion-making.

• S ect ion 2 : Cal ls for the removal of lega l barr iers for Afghan women in the economy.

• S ect ion 3 : Cal ls for the provis ion of sk i l l s and business management t raining to women.

• S ect ion 4 : Cal ls for inclusive access to f inance.

• S ect ion 5 : Cal ls for the improvement of agr icultura l inputs .

• S ect ion 6 : Cal ls for the extension of ser vices to connect women-owned businesses to markets .

Whi le ABADE and WEE NPP are excel lent steps in the r ight direc t ion, support and ass istance for women’s economic par t ic ipat ion has been lacking in many other development sec tor inter vent ions . B eyond the myriad of projec t-based, ad hoc vocat ional t rainings , shor t- term technica l ass istance, and smal l projec ts on women’s economic empowerment , needs st i l l exist and gaps remain to be f i l led to empower women. The internat ional community should reaf f irm their commitments and develop programs that wi l l have long-term ef fec ts (Gheyasi and Zhou, 2015) .

There cont inues to exist a lack of technica l t raining inst itut ions for women in business that impart employable sk i l l s , especia l ly at the provincia l level . There is only one secondar y school for g ir ls in Kabul , Mazar, and Herat that teaches entrepreneurship as a major, and the government univers it ies do not teach business management .

When it comes to developing the nat ion’s human resources , there is insuf f ic ient attent ion f rom the government to bui ld the capacity of workers with the sk i l l s the pr ivate sec tor needs . There are technica l schools and inst itutes in Afghanistan that only teach s ix job-related t rades , e .g . plumbing, car repair, tai lor ing , computer l i terac y, masonr y, and carpentr y (MoLSAMD, 2016) . Afghan businesses need more than these s ix sk i l l s . There are many emerging media out lets , var ious manufactur ing companies , ser v ice-sector businesses (e .g . restaurants and hotels) , IT ser vice providers , f inancia l ser v ices providers , and travel and tour ism businesses , just to name a few (LEAD, 2016) . Al l of these sec tors require sk i l led labor, which is of tent imes not avai lable within the domest ic labor pool .

The chal lenges documented in Chapter 3 have been c ited by many authors in the exist ing l iterature. What is lacking in previous studies and repor ts is detai led informat ion on the internal fac tors that hinder the growth of women-owned businesses . These fac tors can be indiv idual ( i .e . women owners’ sk i l l s and commitment to grow the business) and organizat ional ( i .e . the capacity of employees and the existence of standard operat ing procedures) .

In order to f i l l this knowledge gap, this study set out to col lec t both qual itat ive and quant itat ive data f rom a sample of 248 women-owned businesses f rom the f ive major urban centers of Afghanistan. The study a lso employed a l i terature review, secondar y data col lec t ion, and f ive in-depth inter views.

More detai ls of the methodolog y are presented below :

S A M PL I N G PL A NThe sample was se lec ted based on the fol lowing cr iter ia :

1 . Size of the businesses2 . S ector of business operat ions3. Geography (by c ity)

C ODI N G M ET HOD S S er ia l numbers were ass igned to each sur vey, and geographica l informat ion was color-coded. The color codes were as fol lows:

• Kabul : Yel low • Herat : Green • Mazar- i-Shar i f : Red • Kandahar : Blue • Ja la labad: purple

The above coding method was used throughout the sur vey, ensur ing that the respondents anonymity was preser ved.

SU RV EY T H ROU G H PHON E / E - M A I L There are no publ ished f igures on the number of ac t ive women-owned businesses in Afghanistan. If we look at the 2016 data f rom AISA, the agenc y repor ted that 3% of the 44,838 reg istered companies were women-owned (AISA’s Business Database, 2016) . That leaves us with 1 ,345 reg istered businesses , not

including unregistered micro and smal l women-owned businesses that operate in the informal economy. For the sake of ca lculat ing the margin of error for the sur vey results , we wi l l use this f igure of 1 ,345 as the populat ion s ize , imperfec t though it may be.

In terms of sur vey par t ic ipant recruitment , the sur vey respondents were a l l ident i f ied using the AWCCI database of 700 ac t ive l icensed businesses . The sample s ize of 248, at a 95% conf idence level , results in a 6% margin of error.

The f i rst round of par t ic ipants’ recruitment took place through emai l , fol lowed by a phone sur vey. The data col lec t ion then took place over a 15-day per iod and was under taken by two enumerators who were t rained in how to conduct these speci f ic inter views and make entr ies into the stat ist ica l ana lys is program SPSS.

The sur vey quest ionnaire was pre-tested by the enumerators by conduct ing two inter views f rom each c ity. This led to a number of changes in the form of quest ions and opt ions for answers . In addit ion, the responses were coded to a l low for in-depth SPSS analys is .

L I M I TAT ION SThere were a number of fac tors that l imited the scope of this research. The most s igni f icant l imit ing fac tor was t ime, as this document had to be submitted on a deadl ine for the author’s Master of Business Administrat ion (MBA) degree at the American Univers ity of Afghanistan. Another major l imit ing fac tor was the geographic reach of the AWCCI database. The sur vey par t ic ipants consisted exclusively of reg istered businesses f rom Afghanistan’s largest urban centers ( i .e . Kabul , Herat , Mazar-i-Shar i f , Kandahar, and Ja la labad) . The sur vey may have y ie lded di f ferent results had more women-owned businesses been ident i f ied and quest ioned f rom smal ler provincia l capita l c it ies and rura l areas . Fina l ly, i t must be noted that the sur vey did not include micro and smal l women-owned enterpr ises that were operat ing in the informal economy, without having reg istered with the Afghan Government .

CHAPTER 4 :METHOD OLO GY AND RESEARCH DESIGN

/ / OVERVIEW OF FINDINGS // 2120 / / OVERVIEW OF FINDINGS //

A tota l of 248 women business owners were sur veyed v ia te lephone f rom the f ive major urban centers of Afghanistan. The major ity (133 tota l) were f rom Kabul province, which ref lec ts two rea l it ies ; the more progress ive v iews of women in business in the capita l c ity (and consequent ly, a higher per capita rate of women business ownership) , as wel l as the st rength of AWCCI’s presence (and consequent ly, i t s database) in Kabul Province. Kabul is a lso over whelmingly the most populous c ity in Afghanistan.

After Kabul , the largest number of sur vey par t ic ipants were f rom Herat , Mazar- i-Shar i f , Ja la labad, and Kandahar. Table 2 includes an over view of the sur vey respondents by province.

AG E , M A R I TA L STAT U S , N UM B E R OF C H I L DR E N , A N D ET H N IC I T YDemographic informat ion on the sur vey respondents is summarized in Table 2 . The demographic informat ion in this table consists of age, mar ita l s tatus , number of chi ldren, and ethnicity. Educat ion is e laborated in a separate sec t ion, as this area requires more focused attent ion.

The f indings of the sur vey show that a major ity of women business owners are under the age of 45 . 16 were between the age of 18 and 24, whi le 74 were between the age of 24 and 34. 69 were between the age of 35 and 44. These three age groups make up around 64% of a l l the respondents . The remaining 36% of sur vey respondents were in the two elder age brackets of 45-64 years of age and 65-and-older.

The major ity of the respondents were marr ied (183 out of 248) . 60 were s ing le and 6 were widows. For an aspir ing female business owner, being marr ied in Afghanistan has it s advantages and disadvantages . When a woman is marr ied and has chi ldren, she gains some level of addit ional esteem within her fami ly and in society at large. This can

FEMALE MANUAL LABOR HAS BEEN A KEY FACTOR IN THE DEVELOPMENT OF MANY OF AFGHANISTAN'S KEY INDUSTRIES, SUCH AS THE DRIED FRUITS AND NUTS SECTOR

CHAPTER 5 : OVERVIEW OF FINDINGS translate to fami ly support for the launch of a business . A disadvantage is the addit ional responsibi l it ies re lated to chi ldcare and the genera l chores involved in maintaining a household.

Table 2 shows that among 177 marr ied and widowed women, 77 respondents have more than f ive chi ldren. Another 33 respondents have four chi ldren, and 66 women have between one and three chi ldren.

It may be interest ing to readers to note that a major ity of marr ied women business owners had f ive or more chi ldren. On the one hand, it would be a s igni f icant cha l lenge for a mother of f ive to div ide her t ime between fami ly and business . On the other hand, when the chi ldren become older, they can be helpful to the mother in conduct ing business ac t iv it ies .

As shown in Table 2 , the par t ic ipants of the sur vey were a lso asked which ethnic group they belong to. Among the 248 respondents , the major ity se l f -ident i f ied as Taj ik (124) , fol lowed by Hazara (53) , and then Pashtun (40) , and Uzbek (2) . 30 were f rom other minor ity ethnic groups , such as Turkmen and Sadat (Afghan Arabs) .

E DU C AT ION L EV E LThe sur vey results re lated to educat ion data revea l a ver y high correlat ion between business ownership and educat ion. Figure 1 (p.20) shows that 90 respondents had bachelor’s degrees , whi le a fur ther 23 respondents had master’s degrees . In aggregate, 45 .5% of a l l respondents had a degree f rom a higher educat ion inst itut ion. Another 31% of respondents had earned associates degrees or a high school diploma. Only around 16% of respondents had only studied up unt i l pr imar y school , with just 7 .5% of respondents completely lacking in educat ion. To provide context , the CSO est imates that just 19% of Afghan women across the countr y are l i terate .

The high level of educat ion among the respondents can be par t ly att r ibuted to

Table 2: Demographic Summary of Survey Participants

Age Groups

Age No. of Respondents % of Respondents

Under 18 Years 1 .4%

18-24 Years 16 6.5%

25-34 Years 74 29.8%

35-44 Years 69 27.8%

45-54 Years 63 25.4%

55-64 Years 23 9.3%

56-74 Years 2 .8%

Marital Status

Marital Status No. of Respondents % of Respondents

Married 182 73.4%

Single 60 24.2%

Widow 6 2.4%

Number of Children

No.of Children No. of Respondents % of Respondents

0 71 28.6%

1 24 9.7%

2 23 9.3%

3 20 8.1%

4 33 13.3%

5 or more 77 31%

Ethnicity

Ethncity No. of Respondents % of Respondents

Hazara 52 21%

Pashtun 40 16.1%

Tajik 124 50%

Uzbek 2 .8%

Other 30 12.1%

Province

Province No. of Resondents % of Respondents

Kabul 133 53.6%

Herat 49 19.8%

Balkh 44 17.7%

Nangarhar 12 4.8%

Kandahar 10 4%

/ / OVERVIEW OF FINDINGS // 2322 / / OVERVIEW OF FINDINGS //

business in the f i rst place. Based on a study by the United States Nat ional Women’s Business C ounci l 2013, on fac tors inf luencing women’s success in business , personal mot ivat ion was ident i f ied as one of the most inf luent ia l success fac tors .

Women business owners were asked a mult iple-choice quest ion on why they chose to star t their own business . From the below-l isted f ive opt ions , respondents were asked to choose the top three reasons :

• I wanted to be my own boss• I wanted to generate income for

mysel f and my fami ly• Funding was avai lable for women, so I

thought I should make use of i t• I received t raining in business and I

wanted to put it into pract ice• I couldn’t secure fu l l - t ime

employment

In our f indings , the major ity of respondents stated that ‘I wanted to be my own boss’ was their pr imar y mot ivat ion, fol lowed by ‘I wanted to generate income for mysel f and my fami ly ’, and f ina l ly, ‘Funding was avai lable for women’.

In order to measure the level of knowledge and ski l l s that the women business owners had, they were asked a number of quest ions . The quest ions and quant i f ied answers are presented in Table 4 (above) .

In response to being asked i f they had a v is ion for their business , around 95% of respondents repl ied in the af f i rmat ive (see Table 5 , p.24) . C onsider ing that a large major ity of the businesses sur veyed (80%)

were micro, smal l , and medium-sized, having 1-20 employees , this study assumes that f inances , market ing , and negot iat ions with suppl iers were predominent ly handled by the business owner hersel f .

In today’s technolog y-or iented business environment , i t i s important for business owners to have a sol id base of sk i l l s in computers , smartphones , e-mai l , and socia l media plat forms. The f indings show that 68 .6% of the respondents use computers for their operat ions , and around 74% have e-mai l accounts . Facebook was the most popular socia l media plat form for the respondents , with 64.5% using a personal Facebook accounts and 42% managing Facebook pages for their businesses . Only a smal l number, just 15%, used other socia l media networks such as Twitter, L inkedIn, and YouTube. The major ity of respondents knew about Twitter, but were less aware of L inkedIn and YouTube.

One obstacle for the respondents , when it came to ut i l iz ing informat ion technolog y resources (e .g . computers , internet , and e-mai l) was a lack of Engl ish sk i l l s to navigate computer systems, sof tware, and access informat ion onl ine. The sur vey responses revea l that less than ha l f (45 .5%) of respondents considered themselves good or excel lent in Engl ish . It should a lso be noted that Engl ish is not only important in employing IT resources , but a lso in the genera l world of business . Engl ish is the internat ional language of business ; lacking funct ional Engl ish sk i l l s can lead to lost opportunit ies in terms of bui lding a reg ional or internat ional network of suppl iers and buyers .

f ive years , despite growing concerns about secur ity and pol it ica l instabi l ity, a s teady number of women-owned businesses have become operat ional .

The cont inued pace of Afghan women launching new businesses , even dur ing a per iod of great uncer tain ly, should be ample evidence of the wi l l among Afghan women to contr ibute to the development of the economy. The commitment of Afghan women to invest in their countr y despite the high r isks must be supported by Afghan Government pol ic ies . This wi l l be emphasized again, in greater detai l , in the concluding chapter of this document .

WOM E N OW N E R S’ C OM M I TM E N T, K N OW L E D G E , A N D SK I L L SIn order to measure the commitment of a woman business owner to the growth of her business , i t i s important to t r y to understand her mot ivat ion for star t ing the

Table 3: Industries of Women-Owned BusinessesAgriculture 23 Construction 9

Education 21 Beauty Salon 3

Handicraft 134 Sports/Fitness 2

Health 3 Restaurant 1

IT 3 Retail 4

Jewelry 6 Business Consulting 8

Media & Film 10 Import/Export 8

Food Processing 10 Logistics 3

the geographica l locat ion of the sample pool . The sur vey respondents were a l l f rom the f ive largest urban centers in Afghanistan. In these urban centers , educat ion for young g ir ls and women is the norm, in contrast to reser vat ions about g ir ls’ educat ion in more conser vat ive rura l areas . St i l l , the urban nature of the sample pool does not completely account for the highly-educated nature of the respondents .

The convent ional wisdom is that l i terac y has a causa l re lat ionship with qual ity of l i fe , in terms of choices of profess ion, decis ion-making abi l ity, income generat ion potent ia l , abi l ity to provide for chi ldren, and so on. The high level of educat ion of Afghanistan’s women business owners fur ther supports this convent ional wisdom.

BU SI N E S S SE C T OR SThe women-owned businesses analyzed in this study were spread among 16 sec tors . Table 3 (below) shows that the major ity of sur veyed businesses were involved in the handicraf ts sec tor, a lthough other wel l -represented sec tors include agr iculture, educat ion, construct ion, business consult ing , media product ion, food process ing , and trading ( import/export) . Those businesses involved in export ing ( four tota l) were mainly export ing carpets , handicraf ts , saf f ron, and dr ied f ruits . Import ing businesses were focused on vehicles and construct ion mater ia ls .

AG E OF BU SI N E S SThe major ity of businesses sur veyed (148 out of 248) had been in operat ion for f ive or more years . 29 businesses were four years old. 45 businesses were two to three years old, whi le just 24 businesses were one-year-old or less . In the past

Table 4: Respondents' Work-Related CharacteristicsQuestions Yes No

Do you manage your financial records yourself? 221 27

Do you manage your marketing and promotion yourself? 208 40

Do you use a computer? 171 77

Do you have an email account? 184 64

Do you have a personal Facebook account? 160 88

Do you have a Facebook page for your business? 105 143

Do you have other social media accounts? 38 210

Table 6: Level of Respondents' Personal SkillsQuestions Poor Fair Good V. Good Excellent

How good are you with your financial planning? 23 85 116 14 10

How good are you with marketing planning? 27 77 114 17 13

How good are you developing marketing/promotional material? 35 81 103 19 10

How good are your computer skills? 73 29 80 24 42

How good are your abilities using internet resources? 56 30 94 21 47

How good are your English-language skills? 89 46 77 12 24

24 / / OVERVIEW OF FINDINGS //

In order to gauge the level of hard business sk i l l s , sur vey par t ic ipants were asked i f they direct ly par t ic ipated in their company’s f inance, market ing , and communicat ions ac t iv it ies , and to provide a se l f -assessment of their abi l ity in these areas . The responses to this l ine of quest ioning are presented in Table 6 (p.25) .

90% of respondents c laimed to manage their f inances personal ly, but a minor ity (44.7%) bel ieved themselves to be good at handl ing f inances . Only 9 .6% of respondents assessed themselves as ver y good or excel lent in f inances . In terms of developing promotional mater ia l , only 10 respondents descr ibed themselves as excel lent in this area . This is worth not ing for future planning, in terms of conduct ing

business development t raining and market ing ser vice provis ion for women-owned businesses .

BU SI N E S S OPE R AT IONA L PRO C E DU R E S A N D ST R AT E G I E S The previous sec t ions covered some of the personal qual it ies of the owners themselves that af fec t prospects for their businesses . This sec t ion examines organizat ional fac tors of women-owned businesses .

The sur vey par t ic ipants were f i rst asked i f they had a business plan at the t ime of their business’ launch, and/or i f one had been developed s ince then. 155 out of 248 responded that yes , they had a business plan when they star ted. When asked i f they had a business plan (or st rateg ic plan) now, that tota l rose to 231 (93% of respondents) . A s imi lar number (236 out of 248 respondents) stated that they were guided by an overa l l v is ion for their business .

When it came to product ion (or sa les , as the case may be outs ide of manufactur ing) , 82 .6% of respondents had a measurement for how much they were producing. Only around hal f (51 .2%) had a f i rm idea of how my customers/cl ients they were ser ving on a dai ly bas is . 82 .5% of the respondents c laimed to have clear product ion procedures , whi le 80% reported using an employee handbook or guidebook for human resources management . Hal f of the respondents (50.8%) repor ted using account ing sof tware, and a s l ight ly higher number (53.2%) claimed to

/ / OVERVIEW OF FINDINGS // 25

employ profess ional accountants .

In order to assess the level of s tabi l ity in business operat ions , sur vey par t ic ipants were asked i f they consistent ly sourced their raw mater ia l f rom the same suppl ier or regular ly switched suppl iers . Less than ha l f of the respondents (41.5%) repor ted consistenc y in sourcing mater ia ls f rom the same suppl iers .

Table 7 (p.26) provides important informat ion about the capacity and conf idence of women-owned businesses when it comes to fu l f i l l ing large orders . Around 34.6% of respondents expressed a high degree of conf idence in their abi l ity to fu l f i l l large orders , whi le 41 .9% expressed a moderate degree of conf idence. 24 .5% of respondents were less conf ident that they would be able to fu l f i l l a large order.

E M PLOY E E C A PAC I T YEmployees are an important e lement of success

for any business or organizat ion. In Afghanistan, i t has been f requent ly c laimed that a lack of sk i l led labor has contr ibuted to higher star tup costs as a result of the t ime and money required for t raining.

This study set out to gain more quant itat ive data on this issue, by asking the sur vey par t ic ipants i f their employees were sk i l led when they were hired. The sur vey responses support the convent ional wisdom in this case ; a major ity of the respondents said their employees did not have the r ight sk i l l s needed for the business at the t ime of hir ing , with appropr iate sk i l l s acquired on-the- job.

To assess the overa l l qual ity of staf f , sur vey par t ic ipants were asked i f they bel ieve their employees are wel l - t rained (at present) , and are able to respond posit ively to the esca lat ing needs of the business . Only 32 respondents out of 248 bel ieved their staf f to be at an excel lent

Table 5: Business Strategy and ProceduresQuestions Yes No

Did you have a business plan when you launched your company? 155 93

Do you have a business plan now? 231 17

Do you have a vision for your business? 236 12

Do you have a system for measuring production output? 205 43

Are you able to track daily sales? 127 121

Do you have a well-developed production system? 204 44

Do you have an employee handbook? 200 48

Do you have a procurement manual? 144 1 0 4

Do you have a finance manual? 170 7 8

Do you use accounting software? 126 122

Do you have a professional accountant? 132 116

Do you consistently source your raw materials from the same supplier? 103 145

/ / OVERVIEW OF FINDINGS // 2726 / / OVERVIEW OF FINDINGS //

level of t raining, with another 32 respondents descr ibing the capacity of their staf f as ver y good. The remaining respondents assessed their staf f ’s capacity as good or fair. Only two respondents considered the capacity of their staf f to be poor. A strong major ity – 226 out of 248 respondents – bel ieved that staf f capacity was extremely important , with 18 respondents descr ibing it as ver y important . Only three respondents descr ibed staf f capacity as only moderately important .

PRODU C T QUA L I T Y The women business owners were quest ioned about the nature of the product or ser vices they of fer. They were f i rst asked a genera l quest ion about what goods or ser vices they are producing, in order to ident i f y the sec tor they are involved in , e .g . handicraf ts , construct ion, educat ion, e tc . Fur ther quest ioning took place to obtain more detai led informat ion on the exact nature of the products or ser vices they were providing.

The sur vey par t ic ipants were then asked i f they were fami l iar with their compet itors and had a f i rm idea about their compet it ive advantage in the market ( i f any) . Around 78.2% responded that yes , they knew their business compet itors . Only around 22% of respondents were not aware of their compet itors .

On the quest ion of the compet it ive advantage, s l ight ly more than ha l f said their compet it ive advantage was the unique nature of their product . This may be explained by the concentrat ion of sur vey par t ic ipants in the handicraf ts sec tor, in which there is a high degree of var iance in products f rom one producer to the next . A far smal ler number of respondents l i s ted pr ice, locat ion, and customer ser vice as the keys to their compet it ive advantage.

The next quest ion related to the future ambit ions of the sur vey par t ic ipants . They were asked i f they had any intent ions to improve or upgrade their product/ser vice of fer ings . The purpose of the quest ion was to determine i f the business owners were cont inuing to assess market condit ions in order to respond nimbly to get a step ahead of evolv ing demand. In response to this quest ion, the major ity of respondents said they would l ike to add a new feature ( i .e . per form an upgrade) .

As a fol low up quest ion, they were a lso asked how they want to add the new features . This quest ion was open-ended, with the enumerators taking notes on the responses . Examining these responses , i t i s poss ible to assess just how ser ious the business owners were in moving for ward on upgrades .

The responses were assessed and sor ted, with most answers fa l l ing under one of the below categor ies :

• Want to init iate upgrades , but necessar y capita l not avai lable

• Wil l upgrade when a sa les opportunity presents it se l f

• Intend to search internet for inspirat ion on upgrades

• Intend to consult with customers and employees on potent ia l upgrades

• Need addit ional t rainings/workshops to gain inspirat ion for upgrades

• Wil l make upgrades when secur ity s ituat ion improves

Few respondents ment ioned speci f ic steps they were planning on taking, such as improving design, adopt ing new packaging, or adding addit ional product/ser vice features .

In order to determine how aware the sur vey par t ic ipants were of bas ic business management topics , the business owners were asked i f they had qual ity control measures in place to ensure product consistenc y for buyers . The responses to this quest ion were disappoint ing; the major ity repl ied in the negat ive. In a re lated quest ion, the sur vey par t ic ipants were asked i f they consistent ly sourced raw mater ia ls f rom the same suppl iers . O ver ha l f (58 .4%) of respondents repor ted that they did not have an establ ished supply chain working with the same pool of suppl iers . This is a potent ia l indicator of qual ity control i ssues .

C onsider ing the responses to the quest ion about qual ity control measures , i t i s unsurpr is ing that few of the business owners repor ted having any type of management or product qual ity cer t i f icat ion. Only 15.5% of respondents c laimed to possess any k ind of cer t i f icat ion

Table 7: Production CapacityQuestions Poor Fair Good V. Good Excellent

How well is your production system able to respond to large orders? 20 77 101 44 42

/ / EXTERNAL CHALLENGES CITED BY BUSINESS OWNERS // 2928 / / OVERVIEW OF FINDINGS //

for their business . This study did not include a fol low-up quest ion to inquire what type of cer t i f icat ion these business owners possessed, and i f /how these cer t i f icat ions helped them improve their product ion processes , qual ity control , and sa les . This may be an area worth looking into for future studies .

E M PLOY E E G E N DE R B R E A K D OW N A N D G ROW T HFigures 8 and 9 (p.26 and p.27, respect ively) indicate that many of the sur veyed businesses have grown s ince their launch, based on an increase in the number of their female and male employees . The number of companies with 20 or more female employees rose f rom 25 at the t ime of their launch to 57 at the t ime of the sur vey. Increases were a lso seen among companies with 10-15 female employees , as wel l as 15-20 female employees .

Increases in the number of male employees were much less drast ic , a lthough posit ive overa l l . In genera l , the f indings indicate that women-owned business hire far more female employees than male employees . This could

be a consequence of the t radit ional female-dominated nature of the work (e .g . product ion of handicraf ts) , a more female-centr ic work environment that att racts female appl icants , or a combinat ion of the two. It should be noted that out of the par t ic ipant pool of 248 business owners , only 240 provided informat ion about the number of the female employees .

SE L F- AS SE S SM E N T OF LON G - T E R M G ROW T H PRO SPE C T SO vera l l , the sur vey par t ic ipants had a posit ive out look about their growth prospects ; 80 .2% of respondents bel ieved that their business was l ikely or extremely l ikely to sustain long-term growth. Only 14.9% of respondents bel ieved that long-term growth for their business was unl ikely or extremely unl ikely. 4 .8% of respondents were unsure on this quest ion.

WORKERS STACK BOXES OF FRESH GRAPES FOR EXPORT AT THE KABUL INTERNATIONAL AIRPORT

This chapter presents the chal lenges most f requent ly ment ioned by the respondents of the sur vey. Each par t ic ipant was asked to name the three most severe cha l lenges they face in growing and expanding their businesses . Al l of the below-l isted chal lenges can be class i f ied as external cha l lenges to businesses , which have been documented in previous studies and papers . With that said, i t was deemed important for this study to l i s ten to the women business owners themselves to hear what they had to say.

SE C U R I T Y For business owners f rom a lmost a l l sec tors , poor secur ity has a direc t negat ive impact on their business . When there is an explosion in an urban area , consumers wi l l of ten adopt a defensive bunker menta l ity and abstain f rom shopping for the next severa l days , i f not a week or two. Insecure roadways can s low down the receipt of raw mater ia ls and the del iver y of f ina l products , a long with deterr ing employees (especia l ly female employees) f rom coming to work. Nearly a l l sur vey par t ic ipants ment ioned secur ity as one of their top three cha l lenges .

L AC K OF OPP ORT U N I T I E S F OR M A R K ET I N G PRODU C T S The major ity of sur vey par t ic ipants were discouraged by the lack of t rade shows and exhibit ions at the nat ional and internat ional levels for the products of Afghan women-owned businesses . Whi le most companies va lue the opportunity to showcase their products , t rade shows and exhibit ions are especia l ly crucia l for handicraf ts producers ( the major ity of the sur vey par t ic ipants) . Many Afghan women business owners consider these events to be an inva luable tool for their market ing , promotion, and sa les e f for ts .

A B SE N C E OF PRODU C T ION FAC I L I T I E S Oftent imes Afghan women’s businesses are engaged in smal l-sca le product ion with low prof it margins . With that in mind, industr ia l parks and commercia l renta l spaces in urban areas are excess ively cost ly for most Afghan women business owners . This highl ights an unmet demand in the market for af fordable , moderately-s ized product ion spaces for smal l

and medium-sized enterpr ises . The consequence of not having such spaces avai lable is that the growth of smal ler women-owned businesses is l imited by the s ize of their own home. These home-based businesses remain in the informal economy, where they are able to avoid tax payment but a lso miss out on opportunit ies that are only avai lable to reg istered businesses .

A B SE N C E OF E X P ORT OPP ORT U N I T I E SB oth men and women-owned Afghan businesses se l l ing internat ional ly-traded commodit ies have di f f icu lty f inding internat ional buyers for their products . This is especia l ly t rue, though, for Afghan women-owned businesses . Afghan women business owners are not provided any specia l considerat ions in terms of export promotion or business matchmaking events outs ide Afghanistan. Without specia l provis ions to ensure that female par t ic ipat ion is considered, many Afghan trade delegat ions abroad end up being ent ire ly dominated by men.

H IG H C O ST OF SH I PPI N GMany Afghan women-owned businesses – especia l ly those involved in handicraf ts and jewel ler y product ion – have the opportunity to showcase their products onl ine. Del iver ing the product to an internat ional buyer, though, is a headache that makes the whole venture far less att rac t ive. Internat ional shipping ser vices , l ike FedEx and DHL, do operate of f ices in Kabul , but costs for gett ing items to Europe or North America are exorbitant . As a result , many orders for Afghan clothing, handicraf t i tems, and jewel ler y are fu l f i l led by duel-nat ional Afghans who f it as much product as poss ible in a suitcase. This not only l imits the volume of potent ia l sa les , but a lso keeps these sa les in the informal economy.

L AC K OF F I NA N C I N G S OU RC E SAfghan women-owned businesses have much more di f f icu lty compared to their male counterpar ts in terms of access ing loans f rom banks . This is in large par t to col latera l requirements ( typica l ly land) , and women are rarely the t it le-holders for land in Afghanistan. It should a lso be noted that the lending terms for commercia l banks in Afghanistan are not

CHAPTER 6 : EXTERNAL CHALLENGES CITED BY BUSINESS OWNERS

/ / CONCLUSION // 3130 / / EXTERNAL CHALLENGES CITED BY BUSINESS OWNERS //

par t icular ly att ract ive ; interest rates are high, whi le the contractua l repayment per iods are ver y shor t (of ten just one year!) . There are cer tain ly a range of microf inance inst itut ions (MFIs) operat ing in Afghanistan, but these MFIs of fer f inancing opportunit ies that are too micro in nature to support the growth of an SME with a proven product looking to sca le-up operat ions .

DI F F IC U LT Y AC C E S SI N G I N F OR M AT ION Afghan women business owners have di f f icu lty access ing informat ion, and this has a number of negat ive consequences for their businesses . Without t imely informat ion, they are s lower to ident i f y market t rends , less informed about networks of suppl iers and buyers , and less aware of modern product ion methods and sa les tools . The reasons for the di f f icu lty access ing informat ion include l imited access to the internet and a lack of women-only spaces for business/community ac t iv it ies , among others .

I N SU F F IC I E N T T R A I N I N G OPP ORT U N I T I E SThis study revea led that Afghan women business owners bel ieve that they are def ic ient in a number of core business sk i l l s . When asked about their level of sk i l l in f inancia l planning, market ing planning, and developing market ing/promotional mater ia l , for example, a plura l ity of respondents descr ibed themselves as ‘Good’ in these areas , but only a smal l minor ity of respondents descr ibed themselves as ‘Ver y Good’, or ‘Excel lent’.

H IG H C O ST OF D OI N G BU SI N E S S I N A F G HA N I STA NSur vey par t ic ipants c ited a number of expenses that added to their star tup and operat ional costs .

• Training unski l led workers • O ver-taxat ion (by both the Ministr y of

Finance and loca l municipa l it ies)• High cost of raw mater ia ls (of ten due to

high import customs dut ies) • High renta l costs ( for both product ion

faci l i t ies and retai l locat ions)

These costs , in turn, increase the pr ices of the products and ser vices and negat ively impact compet it iveness .

C ON SE RVAT I V E S O C IO - C U LT U R A L V I EWS ON G E N DE R ROL E STradit ional v iews on the place of Afghan women in society can prevent many aspir ing Afghan

women entrepreneurs f rom ever launching a business . For those Afghan women that are able to launch businesses , they must operate in a society that f rowns upon women moving a lone outs ide the home. As a result , women business owners must make arrangements with relat ives or t rusted dr ivers in order to meet with suppl iers and buyers . When they do have the opportunity to make a sa le , they of ten face buyers who are skept ica l about the qual ity of products coming out of a woman-owned business . At home, Afghan businesswomen jugg le the obl igat ions of fami ly l i fe with their profess ional goa ls , a ba lancing ac t that many f ind untenable .

SLU G G I SH D OM E ST IC M A R K ETWidespread spending by internat ional mi l itar y forces and development agencies s ince 2002 produced a hot war economy. As a result , many Afghans found themselves with disposable income for the f i rst t ime in their l ives . Par t of this disposable income went to the handicraf ts sec tor, for purchases of f inely embroidered cloth, exper t ly car ved wood items, and jewel ler y encrusted with Afghanistan’s famous gemstones . With the depar ture of most NATO forces in 2014, a long with a drast ic reduct ion in internat ional development aid, there was s imply less cash in c irculat ion in the economy. This meant less spending by Afghan consumers on handicraf ts , hand-woven Afghan carpets , and other non-essent ia l commodit ies . With their ac t iv it ies concentrated in the handicraf ts sec tor, Afghan women business owners were hit much harder than their male counterpar ts as the economy went into decl ine.

C OR RU P T ION A N D N E P OT I SMC orrupt ion and nepot ism in Afghanistan results in a loss of e f f ic ienc y and the degrading of qual ity in product manufactur ing and/or ser vice provis ion across the publ ic , pr ivate , and development sec tors . Afghan women business owners are especia l ly disadvantaged in such an environment , where crooked dea ls are of ten put together in late night male-only tea dr inking sess ions at restaurant lounges and hotels . Even when a procurement process is , in fac t , under taken f ree of corrupt ion, the c loud of corrupt ion tarnishes a l l such act iv it ies , leading many women business owners to bel ieve that they ought to g ive up rather than par t ic ipate in a r igged system.

CHAPTER 7 : C ONCLUSION

R E C OM M E N DAT ION S A ser ies of recommendat ions are l i s ted below, to conclude this paper. They are div ided into two sub-sect ions ; the f i rst sec t ion l is ts recommendat ions that were proposed by the sur vey par t ic ipants , whi le the second l ists recommendat ions f rom the author.

Recommendations by survey participants

• D e v e l opme nt supp or t in prov ince s : Sur vey par t ic ipants have suggested that development projec ts should expand to the provinces and distr ic ts . At present , there is the percept ion that development support is only reaching the major urban centers .

• More w ork shop s and t raining pro g ram s : Women business owners have requested more long-term and hands-on workshops and training programs, especia l ly in the areas of market ing and product development . The women business owners were a lso interested in t raining in computer sk i l l s , and how to use new technologies (and internet resources) to improve their business .

• More e x hibit i on s and t rad e show s : Sur vey par t ic ipants requested support in the form of exhibit ions and trade shows.

As ment ioned earl ier in this document , these sa les forums are absolutely cr it ica l for businesswomen in the handicraf ts sec tor.

Recommendations by the author based on this research findings

• Adv ance d Training : The development of t raining programs in the below-l isted areas :

◊ Operat ions management ( to ass ist women business owners in understanding standardized product ion procedures and supply chain management)

◊ Product development ◊ Pr ic ing strateg y and techniques ◊ Market ing management ( looking

at both domest ic and internat ional sa les)

◊ Growth planning ◊ C ontract development ( to include

business negot iat ions)

WHAT CAN WE DO NOW FOR THE NEXT GENERATION OF

AFGHAN BUSINESSWOMEN?

/ / REFERENCES // 3332 / / CONCLUSION //

• L ong - te r m co aching and me ntor ship : Long-term coaching and mentorship should be provided on the fol lowing areas :

◊ Developing and putt ing into writ ing standard procedures for business ac t iv it ies

◊ Financia l ana lys is and forecast ing ◊ Market ing , market research and

how to f ind buyers nat ional ly and internat ional ly.

◊ Ef fec t ive use of mass media , socia l media , and internet sa les plat forms for business market ing and promotion

◊ Internat ional ly-recognized cer t i f icat ion: The Afghan Government , with support f rom Afghanistan’s internat ional stakeholders , should a l locate f inancia l and technica l resources to ass ist women-owned businesses in implement ing standardized product ion procedures . Ass istance is a lso needed in gett ing these businesses cer t i f ied by recognized internat ional bodies .

• G ov e r nme nt ince nt iv e s supp or t ing w ome n - ow ne d bu sine ss e s : The Afghan Government should consider incent ives provided in laws, regulat ions , pol ic ies , and development programs that support women-owned businesses and investment by women in var ious sec tors .

• Fur the r re s e arch inv e st ig at ing g row th f ac tor s f or w ome n - ow ne d bu sine ss e s : This study was conducted with a minimal (personal) budget , as par t of the author’s MBA studies . As a result , i t was admittedly l imited in its geographic coverage. With mi l l ions of dol lars in internat ional development aid a l located to support Afghan women-owned businesses and female entrepreneurs , i t i s a common-sense move to earmark at least some funds to more in-depth analys is of growth fac tors for women-owned businesses . Such research could contr ibute to better understanding the programming needs of these businesses , as wel l as inf luence pol ic y makers at the nat ional and internat ional level .

• P rov i si on o f marke t ing supp or t : B esides the research suggested above, addit ional

research is necessar y to ident i f y potent ia l markets for the products of women-owned businesses , and potent ia l sec tors for women to consider for investment .

F I NA L T HOU G H T SIn Afghanistan, with an economy in t ransit ion and cont inued insecur ity, growth prospects for businesses are di f f icu lt to assess . There are cer tain ly a plethora of external fac tors that constrain the growth of businesses in Afghanistan, most of which af fec t women-owned businesses more severely than their male peers .

Whi le external fac tors inhibit ing business growth are important to ident i f y and analyze, this study was able to uncover usefu l ins ights on the internal fac tors that a lso come into play when it comes to the success or fai lure for Afghan women-owned businesses .

What this study set out to do was encourage the stakeholders in the Afghan economy to consider the growth fac tors of Afghan women-owned businesses hol ist ica l ly. External fac tors l ike secur ity, which tend to monopol ize attent ion, represent par t of the stor y, but not a l l of the stor y. External fac tors represent cha l lenges to be overcome, but at the foundat ion of any women-owned businesses’ s t rength are the personal qual it ies of the business owner hersel f and the management f ramework she has establ ished for her company.

Akbar i , M. Z. (2016) . The Factors of Economic Cr is is in Afghanistan. Retr ieved June 11, 2017, f rom http : / /out lookafghanistan.net/ topics .php?post_id=16151Afghanistan, D. O. (2016, June 18) . Afghanistan Loses $100 Mi l l ion A Year Through I l lega l Mining: EU. Retr ieved June 11, 2017, f rom http : / /www.out lookafghanistan.net/nat ional_detai l .php?post_id=15537.

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Afghanistan - L abour L aw (No. 35 of 2007) . Accessed June 28, 2017. http : / /www.i lo.o r g / d y n / n a t l e x / n a t l e x 4 . d e t a i l ? p _ l a n g = & p _isn=78309&p_countr y=AFG&p_count=75.Analyt ica l Report on the Implementat ion of Nat ional Act ion Plan for the Women of Afghanistan in the Govern¬ment Inst itut ions (2013) . Accessed June 28, 2017, http : / /mowa.gov.af/C ontent/ f i les/Report on the Implementat ion of NAPWA.

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Bank, T. W. (2006, October 27) . Gender equal ity as smart economics : a World Bank Group gender ac t ion plan - f isca l years 2007-10. Retr ieved June 28, 2017, f rom http : / /documents .worldbank.org / c u r ate d / e n / 2 9 5 3 7 1 4 6 8 3 1 5 5 7 2 8 9 9 / G e n d e r-e q u a l i t y - a s - s m a r t - e c o n o m i c s - a - W o r l d -B a n k - G r o u p - g e n d e r - a c t i o n - p l a n - f i s c a l -years-2007-10 Byrd, B. , & Payenda, M. K. (2016, S eptember 1) . Afghanistan’s Government Revenue: C ont inuing robust growth in the face of economic weakness . Retr ieved June 11, 2017, f rom https : / /www.afghanistan-analysts .org/afg hanis t ans-gover nment-re venue-cont inuing-r o b u s t - g r o w t h - i n - t h e - f a c e - o f - e c o n o m i c -weakess/

C onvent ion on the E l iminat ion of Al l Forms of Discr iminat ion against Women. Retr ieved June 11, 2017, f rom http : / /www.un.org/womenwatch/daw/cedaw/

Choi , C. Q. (2014, S eptember 4) . $1 Tr i l l ion Trove of R are Minera ls Revea led Under Afghanistan. Retr ieved June 11, 2017, f rom https : / /w w w.l ivesc ience.com/47682-rare-ear th-minera ls- found-under-afghanistan.html

Churchi l l , N.C. , & Lewis , V.L. (1983) . The f ive stages of smal l business growth. Har vard Business Review, 61 , 30-50.

EPD. (2015) . Barr iers to Women Entrepreneurs’ Access to Markets . Kabul , Equal ity for Democrac y and Peace/U.S . Depar tment of State .

Echavez , Chona R . (2012) . Does Women’s Par t ic ipat ion in the Nat ional S ol idar ity Program Make a Dif ference in Their L ives? A Case study in Kabul Province. Kabul : Afghanistan Research and Evaluat ion Unit .

Ernst & Young, LLC (2015) . Impact of Afghanistan Rura l Enterpr ise Development Program on Rura l Women: Study Paper. Kabul : MRRD

Ganesh, Lena (2013) . Women’s Economic Empowerment in Afghanistan 2002-2012: Informat ion Mapping.” Kabul : Afghanistan Research and Evaluat ion Unit .

Ganesh, Lena (2013) . Women’s Economic Empowerment in Afghanistan 2002-2012: Situat ional Analys is . Kabul : Afghanistan Research and Evaluat ion Unit .

Ghiasy, Richard, Jiay i Zhou, and Henrik Hal lgren. Afghanistan 's Pr ivate S ector - Status and Ways For ward. Report . Stockholm Internat ional Peace Research Inst itute . October 2015. https : / /www.sipr i .org/s ites/default / f i l e s / 2 0 1 6 - 0 4 / S I P R I _ A f g h a n i s t a n s - P r i v a t e -S ector_Report-2015.pdf .

Kyr iakidou, N. , Smith, G. , & L ampadar ios , E . (2017) . Towards a new f ramework for SMEs success : a l i terature review. Internat ional

REFERENCES

/ / ABOUT AWCCI / / 3534 / / REFERENCES //

Journal of Business and Global isat ion, 18(2) , 194. http : / /doi .org/10.1504/ijbg .2017.10001686

LEAD (2016) . Afghan Women Entrepreneurs’ Recommendat ions to Promote’s Women in Economy. Kabul : LEAD.

Mashal , Mujib (2014) . Smal l and Medium Enterpr ises Development and Regional Trade in Afghanistan. Kabul : AREU and Univers ity of C entra l Asia .Otto, Je f f rey L . Afghanistan Investment Cl imate Statement 2015. Report . U.S . Depar tment of State . June 2015.http : / /www.state .gov/documents/organizat ion/241662.pdf .

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Z and, S ogol (2011) . The Impact of Microf inance Programs on Women's L ives : A Case Study in Kabul Province. Kabul : Afghanistan Research and Evaluat ion Unit .

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Since 2002, many non-prof it organizat ions have star ted working for Afghan women’s empowerment and r ights . Almost a l l focused their ac t iv it ies and advocac y work on women’s pol it ica l , socia l , and cultura l par t ic ipat ion and r ights . None were focused on the topic of women’s economic par t ic ipat ion or businesswomen’s advocac y.

A group of Afghan businesswomen recognized this need and the lack of an advocac y plat form to fur ther their interests , so they col laborated and establ ished Leading Entrepreneurs for Afghanistan’s Development (LEAD). LEAD was establ ished in 2013 and of f ic ia l ly launched on 22 Januar y 2014. It was reg istered with the Afghan Chamber of C ommerce and Industr ies as a Businesswomen’s Union. LEAD presented a proposa l to the High Economic C ounci l , chaired by the Pres ident Ashraf Ghani , to change the name to the Afghanistan Women Chamber of C ommerce and Industr y (AWCCI) . LEAD’s t ransit ion to become the AWCCI was approved by the High Economic C ounci l of the Afghan Government on 12 March 2017.

AB OUT THE AFGHANISTAN WOMEN CHAMBER OF C OMMERCE AND INDUSTRIES

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