TABLE OF CONTENT

Page

Forward Acknowledgement

Abbreviations Background

Matrix of Recommendations

1. Challenges Facing Small and Medium Enterprises Owned by Women Entrepreneurs in Selection and Acquisition of Commercial & Industrial Premise 1.1. Forum Proceedings

1.2. Study findings 1.3. Recommendations 2. Women Entrepreneurs Associations in Ethiopia: Opportunities and Challenges 2.1. Forum Proceedings 2.2. Study findings 2.3. Recommendations 3. Challenges in Financing Women’s Businesses 3.1. Forum Proceedings 3.2. Study findings 3.3. Recommendations 4. Barriers Faced by Women Entrepreneurs in Developing Products and Establishing Services ``for Export

Marketing 4.1. Forum Proceedings

4.2. Study findings 4.3. Recommendations 5. The Perspectives of Women Business Owners in Trade in Services 5.1. Forum Proceedings 5.2. Study findings 5.3. Recommendations 6. The Way Forward 6.1. Working with Partners 6.2. Entry Points Appendix

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Foreword

The Centre for African Women Economic Empowerment provides capacity building services to women

exporters engaged in manufacturing and service sector by providing trainings, mentoring, matchmaking and provision of web based trade information. The centre is also involved in supporting companies in product development, market promotion, preparation of marketing materials and participation in international trade fairs.

CAWEE apart from providing diverse categories of export focused business development services, it has also involved in advocacy initiatives through organizing consultative forums based on action oriented researches. These kinds of particular approaches which are designed to address some of the critical challenges women face in running their business are highly appreciated. Because such kinds of forums would be used as instruments or mechanisms in collecting views, policy ideas and recommendations from pertinent stakeholders.

Without the financial support of the Spanish NEPAD fund and technical support of the Spanish Development Cooperation Office in Ethiopia and the NEPAD Secretariat based in South Africa, this project could not be realized. The project focused in organizing series of consultative forums, during the project phase CAWEE was able to organize five forums.

The 1st consultative forum took place on the 25th of September, 2008 at the Sheraton Addis, focusing on the thematic issue area – “Challenges Facing Small & Medium Enterprises Owned by Women Entrepreneurs in Selection and Acquisition of Commercial & Industrial Premises”, where 181 participants (128 women and 53 men) took part.

The 2nd consultative forum took place on the 27th of November, 2008 at the Hilton Addis, focusing on the thematic issue area – “Women Entrepreneurs Associations in Ethiopia: Opportunities and Challenges”, where 225 participants(155 women and 70 men) took part.

The 3rd consultative forum took place on the 29th of January 2009 at the Hilton Addis, focusing on the thematic issue area – “Challenges in Financing Women’s Businesses”, where 260 participants(180 women and 80 men) took part.

The 4th consultative forum took place on the 12th of March 2009 at the Hilton Addis, focusing on the thematic issue area – “Barriers Faced by Women Entrepreneurs in Developing Products and Establishing Services for Export Marketing”, where 300 participants(210 women and 90 men) took part.

The 5th consultative forum took place on the 26th of May 2009 at the Hilton Addis, focusing on the thematic issue area – “The Perspectives of Women Business Owners in Trade in Services” where 375 participants (280 women and 95 men) took part.

During the project phase, it was expected that about 1,050 participants will get involved in the discussion forums. The actual number of participants was 1,341 which is 28 percent more. The target group and beneficiaries for this project were WEs and promoters of WEs. Participants of these forums were policy makers, implementers, private sector associations (Chambers of Commerce, Women Entrepreneurs Associations, etc), NGOs and Community Based Organizations that promote the causes of women in business, donors and other relevant development partners and mainly WEs.

The outcomes of those five consultative forums were great successes. The consultative forums were able to bring out different opinions and recommendations for the way forward. The documentation of the proceedings of the five consultative forums and the studies conducted on the various thematic issues is prepared in a booklet format which is expected to enable both governmental and non governmental organizations which support the cause of women in Ethiopia to identify and formulate intervention packages/ projects which will address the challenges of women and particularly WEs.

Acknowledgement

The Consultative Forums organized under the theme “Empowering Women Economically is

Key to Development” achieved its intended objectives with the support of various stakeholders starting from its inception. Without the financial support of the Spanish-NEPAD Fund, it would have been totally impossible to realize the project. CAWEE on its behalf and on behalf of the Ethiopian WEs would like to thank the Spanish Government and the NEPAD Secretariat for their contribution to empower Ethiopian WEs.

CAWEE would like to thank Her Excellency Ubah Mohammed, State Minister, Ministry of Women Affairs; His Excellency Tadesse Haile, State Minister, Ministry of Trade and Industry; H.E Kebede Abera, Member of Parliament, Chairperson, Trade & Industry Affairs Standing Committee in the Parliament; H.E Antonio Sanchez-Benedito, Ambassador of Spain in Ethiopia; H.E Excellency Donald Yamamato, Ambassador of the United States of America in Ethiopia; Her Excellency Ms. Sile Maguire Ambassador of the Irish Embassy, Addis Ababa; Ambassador Halima Mohamed Director, Women’s Affairs & Affirmative Action Directorate General, Ministry of Foreign Affairs; Ms. Maria Cruz, Head, Spanish Development Cooperation, Addis Ababa and Ms. Litha Musyimi-Ogana, Director, Women, Gender and Development Directorate, Africa Union Commission; for expressing their support to empower Ethiopian women entrepreneurs through their official opening speeches as guest speakers. Their contribution was highly invaluable in encouraging and motivating both the WEs and the various support institutions.

CAWEE would like to express its appreciation for the researchers Mr. Yared Fekade; Mrs. Desta Solomon; Mr. Solomon Wole; Mrs. Asegedech Woldeleul and Mrs. Tigist Lemma for coming up with concrete and practical recommendations and for the discussants Mrs. Melika Bedri, Vice President, Information Systems Commercial Bank of Ethiopia; Mrs. Mesenbete Shenkute, Vice President, Credit Process, Development Bank of Ethiopia; Mr. Addis Alemayehu, Chief of Party, USAID Grantee VEGA Ethiopia AGOA+; Mr. Jacques Dubois, Partner at Muya Ethiopia Plc, Mrs. Samrawit Mogues, Owner and Manager, Travel Ethiopia; Mr. Philip O’ Dwyer, Director of Connect Ethiopia and Ms. Maud Druesne, Buyer Consultant; Ambassador Peter G. Robleh; Senior Regional Advisor, Africa Trade Policy Center; Ms. Yetnebersh Negussie, Program Manager for Economic Empowerment, ECDD and Ms. Brouke Tefera; Researcher in the Ethiopian Development Research Institute.

CAWEE would like to extend its appreciation to the forums moderators Mrs. Hikmet Abdella; Mrs. Saba Gebremedhin; Ms. Jeanah Lacey; Mr. Andualem Tegegn and Mrs. Nahusenay Girma. CAWEE would also like to thank all the participants of the forums who have significantly contributed to the success of the research studies and in coming up with concrete and practical recommendations for future interventions.

Abbreviations ACCA Association of Chartered and Certified Accountants ACGSD African Centre for Gender and Social Development ADCSI Addis Credit and Saving Institute AEMFI Association of Ethiopian Microfinance Institutions AFRACA African Microfinance Association AGOA African Growth Opportunity Act AmCham American Chamber of Commerce ATPC African Trade Policy Centre BDS Business Development Services BMO Business Membership Organizations CAWEE Centre for African Women Economic Empowerment CBE Commercial Bank of Ethiopia CDSM Common Dispute Settlement Mechanism CIDA Canadian International Development Agency CPC Central Product Classification COMESA Common Market for Eastern and Southern Africa CSA Central Statistical Authority CSO Civil Society Organizations DBE Development Bank of Ethiopia DCA Development Credit Association ECC Ethiopian Chamber of Commerce ECDD Ethiopian Centre for Disability and Development EDRI Ethiopian Development Research Institute EEA Ethiopian Economic Association EFEA Ethiopian Flowers Exporters Association EFPD Ethiopian Federation of Persons with Disabilities EPA Economic Partnership Agreement EU European Union EWDNA Ethiopian Women with Disabilities National Association EWEA Ethiopian Women Exporters Association EWEA Ethiopian Women Entrepreneurs Association EWMA Ethiopian Women Media Association FDRE Federal Democratic Republic of Ethiopia GATT General Agreement on Tariff and Trade GDP Gross Domestic Product GTZ German Technical Cooperation ILO International Labour Organization IMF International Monetary Fund IPRs International Property Rights IIRR International Institute for Rural Reconstruction ITC International Trade Centre MDG Millennium Development Goals MFI Microfinance Institutions MoU Memorandum of Understanding MSE Micro and Small Enterprises MSME Micro, Small and Medium Enterprises MoTI Ministry of Trade and Industry MP Member of Parliament NEPAD New Economic Partnership for African Development NEWA Network of Ethiopian Women Association NGO Non Governmental Organization OWIT Organization of Women in International Trade PACT Program for Building African Capacity for Trade PASDEP Plan Action for Sustainable Development and Eradication of Poverty PLc Private Limited Company

RUFIP Rural Financial Intermediation Program SIDA Swedish International Development Agency SMEs Small and Medium Enterprises SWOT Strength Weakness Opportunities and Threat SNNPR Southern Nations and Nationalities People Region UNECA United Nations Economic Commission for Africa USAID/DCA United States of America International Development- Development Credit Authority VEGA Volunteers for Economic Growth Alliance VSO Voluntary Service Overseas WAD/MOTI Women Affairs Department- Ministry of Trade and Industry WB World Bank WE Women Entrepreneurs WEA Women Entrepreneurs Association WEDGE Women Entrepreneurship Development and Gender Equality WEG Women Entrepreneurs Group WHO World Health Organization WISE Women In Self help Enterprises WTO World Trade Organization YWCA Young Women Christian Association

Background

“Empowering Women Economically is Key to Development”

Multi-faceted subjects, such as the social and economic empowerment of women, are central to the analysis of women’s entrepreneurship. In order for a woman to be empowered however, she needs access to the material, human and social resources necessary for making strategic choice in her life. Yet women have historically been disadvantaged in accessing not only material resources like credit and other property, but also in obtaining social resources such as education, information and modern technology. All of these factors have negative implications for the type of enterprises that women are engaged in.

It has been made clear in some recently conducted studies that women engaged in micro-enterprises started their businesses to overcome the challenges of poverty and its consequences. Many women have multiple responsibilities as mothers and producers and therefore tend to engage in activities that are home-based and less risky. This may have negative implications however, as often such low risk activities produce limited returns. The reduced physical mobility of many of the women who operate in this category also often prevents them from seeking out information on better economic opportunities.

The lack of market access, affordable technology and opportunities for bulk purchase of inputs, as well as the low level of education for women are considered to be some of the main problems faced by women engaged in or aspiring to engage in growth-oriented enterprises.

This particular project was designed to address some of the critical issue areas for debate, through conducting action oriented researches, by organizing and running series of consultative forums on major thematic issue areas of concern. CAWEE mainly targets the promotion of Ethiopian women entrepreneurs, with a special focus to women exporters. Therefore, the mission of CAWEE is to promote Ethiopian WEs, with a special focus to women exporters, both existing and potential/emerging exporters.

CAWEE aims at creating a core group of businesswomen engaged in export activities. Accordingly, the vision of CAWEE will be to create globally competitive core WEs class in Ethiopia. In this respect, CAWEE works in the diverse sub-sectors of trade and industry where women are involved in. In the manufacturing sub-sectors, with a focus to export, CAWEE works in areas like handicrafts, textiles & garment, leather crafts & leather garment, agri-business, jewellery, wood & metal works, etc. In the services sub-sector, again with a focus to export, CAWEE works in areas, like consultancy, research, training, tour operation, hotel service, legal service, medical service, etc. CAWEE provides capacity building services for Ethiopian women exporters, for both manufacturers & service providers, through training, mentoring & provision of web-based trade information. CAWEE provides those services through its Regional program called ACCESS!

CAWEE was also involved in capacity building of Ethiopian women exporters through product development, market promotion, preparation of marketing materials & participation in international trade shows. In a program called PACT (Program for building African Capacity for Trade), a country program implemented by the Ministry of Trade & Industry, where CAWEE was a joint partner, six handloom companies, all owned & managed by women, went through processes of product development, market promotion, preparations of marketing materials, for ten consecutive months and those companies participated in trade shows in Montreal and Toronto, Canada, in May 2007, which was an entry point for the companies to enter the Canadian as well as the US market.

CAWEE also organized business award event. The event was special because it happened in the Ethiopian year, when Ethiopia was celebrating its Millennium and it was after that, the event was named as a Millennium award for women exporters in the hand loom sub-sector. The Millennium award was unique in that the companies were recognized and were awarded at the National Palace, by the President of the FDRE, in February 2008.

Beyond promoting women in the manufacturing sector, CAWEE is also involved in the promotion of Ethiopian women exporting their services. In this respect, CAWEE has started working with ITC, Geneva, where the program is operational in three African countries Nigeria, South Africa and Ethiopia. The Trade in Services program further trained three national trainers abroad (2 women & 1 man) and provided support in conducting trainings for women exporting their services. This particular project was able to train 43 participants in International Trade, with a special focus on Trade in Services, out of which 8 of the trainees were men. The program mentored 11 companies. This particular program sponsored 3 Ethiopian women entrepreneurs that export their services, in a trade mission to Canada in May 2007.

Recent initiative that CAWEE started working on is, establishing market link with Ireland. In this process, CAWEE is closely working with “Connect Ethiopia”, Irish based network of business people, which has shown interest to closely work with Ethiopian women exporters involved in manufacturing as well as services. In this process, CAWEE has facilitated the establishment of the ‘Connect Ethiopia, Addis Ababa Team”, where this time, about 39 companies profiles are prepared, these companies are owned and managed by women. The whole purpose of this exercise is aimed at creating business contact with the Irish counterparts.

Different initiatives are also in progress, supplementing CAWEE’s efforts in the promotion of Ethiopian women in business. With the initiative taken by the Ambassador of the US Embassy, the WEG was established, in July 2006, to address the constraints faced by growth-oriented WEs in Ethiopia. CAWEE is a member of that group and is working as a sub-committee chair in the WEG.

The WEG works to achieve its aim by advocating for favorable policies, strengthening the capacities of women’s businesses, serving as a network forum and empowering women & girls through community outreach. Leading women entrepreneurs, government officials, members of parliament, representatives of CSOs, international organizations and diplomatic missions make up its membership. This noble initiative of the US Ambassador is greatly supporting Ethiopian WEs.

Beyond the provision of export focused business development services, that is – trainings in international trade, mentoring services, provision of web-based trade information, facilitating product development, market promotion and participation in international trade shows; CAWEE is highly involved in organizing consultative/advocacy forums. In organizing the advocacy forums, focus was made on challenges that Ethiopian women face in business. In this process, based on action oriented researches covering five thematic issue areas of concern, series of advocacy forums were organized from September 2008-May 2009. The researches and consultative forum findings are compiled in a booklet; which is aimed to provide concerned development partners with a document for further action.

This booklet is organized as follows. Chapter 1 examines the “Challenges Facing Small & Medium Enterprises Owned by Women Entrepreneurs in Selection and Acquisition of Commercial & Industrial Premises”. Chapter 2 addresses the issue of “Women Entrepreneurs Associations in Ethiopia in Terms of their Opportunities and Challenges”. Chapter 3 looks at the “Challenges in Financing Women’s Businesses”. Chapter 4 examines the “Barriers Faced by Women Entrepreneurs in Developing Products and Establishing Services for Export Marketing”. Chapter 5 addresses the issue of “The Perspectives of Women Business Owners in Trade in Services”. The final chapter of the booklet deal with the way forward highlighting on how to work with partners and how to implement the recommendations outlined during the consultative forums.

The matrix of recommendations included at the beginning of the booklet deals with the way forward highlighting on issue areas of focus where concerned development partners can get involved in various interventions and how to implement the recommendations outlined during the consultative forums.

1. First Consultative Forum on “Challenges Facing Small and Medium Enterprises Owned by Women Entrepreneurs in Selection and Acquisition of Commercial & Industrial Premise”

1.1. Forum Proceedings

The First Consultative Forum on the “Challenges Facing Small and Medium Enterprises Owned by Women Entrepreneurs in Selection and Acquisition of Commercial & Industrial Premises” was organized by CAWEE on September 25, 2008 at the Sheraton Addis in Addis Ababa. The Consultative Forum had the participation of 181 participants (128 women and 53 men) representing all stakeholders--policy makers, implementers, business associations, Chambers of Commerce, NGOs, academic institutions, consultants, researchers, WEs, donors and other concerned development partners that promote the causes of women in business.

The Consultative Forum was inaugurated by His Excellency Antonio Sanchez-Benedito, Ambassador of Spain in Ethiopia. The keynote address was delivered by Ms. Litha Musyimi-Ogana, Director, Women, Gender and Development Directorate, Africa Union Commission. The welcoming Speech was made by Mrs. Nigist Haile, Executive Director of CAWEE.

Participants registering Participants attending the forum Inaugural Session 25th September 2008 14:00- 14:45 hrs

Start of the consultative forum • Mrs. Hikmet Abdella, the Consultative Forum moderator welcomed the distinguished guests and participants. • Mrs. Nigist Haile, Executive Director of CAWEE in her welcoming speech highlighted the achievements and

successes of CAWEE to promote and support women’s economic empowerment since its establishment, June 2004. CAWEE has planned to organize series of six consultative/advocacy forums, including a seventh wrap-up forum, for the coming 14 months, expected to take place every two months, focusing on main challenges that affect the growth and expansion of women owned businesses.

She outlined that throughout the project phase, it is expected that the following benefits would be achieved:

Awareness created on the thematic issue areas of concern discussed, women entrepreneurs challenges/concerns come out to be visible, Relevant policy ideas and recommendations come out, Advocacy and lobbying capacity of WEs and their associations built, Experiences shared amongst the different partners that promote women in business, Discussion findings documented and disseminated for further references actions and interventions.

Mrs. Nigist Executive Director CAWEE

Mrs. Nigest stated that, this particular project will be an instrument to identify policy ideas, opinions and workable recommendations for the way forward. The findings that target policy ideas and recommendations are believed to serve as a major tool for further intervention by all concerned development partners in the promotion of women in business in Ethiopia.

Ms. Litha Musyimi-Ogana

Ms. Litha Musyimi-Ogana, Director, Women, Gender and Development Directorate, Africa Union Commission started her speech by thanking CAWEE. She explained in detail how the Spanish-NEPAD project was conceived .This project was designed with the overall objective of Empowering African women economically by providing them with inclusive support mechanisms, that enable women empower themselves in the informal sector both in rural and urban areas as well as supporting interventions that close the existing gender gap. Ms. Litha explained that the NEPAD-Spanish fund supported four NGOs here in Ethiopia, CAWEE is just one of them and she said that she believes that the selected organizations try to address gender issues that trap the majority of our women and girls in a vicious circle of poverty, deprivation and all sorts of barriers. She indicated that she is very excited to say that CAWEE was among the first country level organizations to be involved in this process. She said that it is encouraging that an indigenous NGO like CAWEE has initiated to involve Ethiopian women in business with special focus on women exporters in the project.

His Excellency Ambassador Antonio Sanchez-Benedito

His Excellency Antonio Sanchez-Benedito, Ambassador of Spain in Ethiopia in his opening speech indicated that it is a real honor and privilege to share with the forum participants the inauguration of this very important event. He explained that for his government, the participation and involvement of women at all levels has been a question of principle. He indicated that nowadays in Spain there are more women than men sitting in the Spanish Council of Ministers. He indicated that this same approach is one of the leading factors and principles that are guiding the cooperation with Africa. H.E. further highlighted that Spain has made effort to upgrade, to diversify cooperation with the African continent. He indicated that a new African plan is being elaborated and implemented and the question of gender and participation of women is a very important factor. In this context he said that the fund which is operated by Spain and the NEPAD secretariat is very useful to create conditions for new projects such as the one inaugurated by CAWEE. He finally concluded his speech by expressing his gratitude and wishing success.

Technical Session - Topic: Challenges Facing Small and Medium Enterprises owned by Women Entrepreneurs in Selection and Acquisition of Commercial and Industrial Premises

25th September 2008 14 45: -15:30 hrs

Moderator: Mrs. Hikmet Abdella

Presenter: Mr. Yared Fekade Rapporteur: Mr. Robel Woldeyes

Objectives of the Study:

Assess the major factors that determine the decision of the selection and acquisition of working premises;

Recommend policy ideas and mechanisms to enable WEs best utilize commercial and business premises.

Yared Fekade, presenting the study

Introduction

More than 73% and 13% WEs are engaged in microenterprises and SMEs respectively Over 40% of the WEs cited lack working space as their overall major constraint to growth Limited supply of new leasehold land High price of land leases and rents (Birr 1300-4300/square meter and 16%-25% of total enterprise

sales) Time taken to acquire land leases Inability to pledge land-use rights as collateral

Existing Legal frameworks

Land is granted in four different ways Negotiation Auction Award Designation

Proclamation No. 272/2002 : Re-enactment of Urban Lands Lease Holding Proclamation Regulations

Conceptualizing Location/Working Premises

Among many challenges facing SMEs is the selection and acquisition of commercial or industrial land Poor selection of a business location can have an adverse impact on the firm’s access to markets,

suppliers, labour and future expansion Site selection and acquisition is determined by the nature of the business The important thing to remember in a site search is that the site itself is not an end

The site is an integral part of the construction and operation system

Selection and Acquisition of Commercial or Industrial Land

Once the geographic considerations are determined there is need for: Detail site information required Alternative site assessment Ownership issues of the property Price/square meter Tax related issues Assess advantages and disadvantages from engineering perspective

Office and Plant Layout

Internal disturbances (breakdowns, queuing delays, rejects, rework etc.) and external disturbances (Level of demand, prices and product mixes) can be reasons for layout change

Continuous improvement has cost which has to be spent on layout and re-layout Efficiency in layout minimize overall production time, maximize turnover of work in process and

maximize output Number of layout models are developed: distance-based and adjacency based Layout planning has to start with the business and is continuous and considers future expansion

Conclusion

Local governments should be encouraged to set aside land to be used by WEs Develop clusters and business incubators Build the capacity of WEs in site selection and layout planning

Encourage WEs to use professional tools in site selection, acquisition and layout planning

Floor Interventions:

Mrs. Desta Solomon, Consultant, highlighted on the issue of attitude which sometimes has little to do with regulations; she emphasized that it has to do mainly with the attitude and mindset of people when you deal as a WE. People consider women as weak, easy to convince, uninformed especially when it comes to informal brokers they tend to exploit women.

Mr. Solomon Wole, a private sector practitioner explained that location depends on the nature of enterprises, some are tied to raw material supply, others to market and some are foot loose. Particularly when addressing manufacturing enterprises these issues have to be taken into account. Concerning the challenges faced by WEs he highlighted on three issues: the regulation, the second is the cost of accession to working premises and the third is attitudinal problems i.e. male entrepreneurs have the advantage to socialize and get together and can easily access information whereas this is not the case to WEs. In addition, he emphasized that renting a premise is much more expensive for women than men.

Mrs. Sara Abera, owner and manager of Muya Ethiopia Plc. asked about the issue of finance to get working premises? Is there any kind of business loan which addresses this issue? Is there any kind of support from government to encourage women entrepreneurs in training and other supports?

Mrs. Meaza Ashenafi, consultant supplement on the previous question by relating it with affirmative action. What are the kinds of supports that the government is giving? What are the legal provisions?

Mrs. Samrawit Mogesse who is a women entrepreneur in the tourism industry explained how she started her business from home and rented a house but the rent increased significantly after two years. She is currently facing problems with parking space. This is a big challenge for her tour operation business which is dependent on its fleet of vehicles. In addition she has problem of store for the various tour operation related equipments. She also raised the question of how to get finance to solve the working premises problem?

Mrs. Menbere Alemayehu, owner and manager of Menby’s Design, informed that she is in the hand woven textile business and explained how she is working with weaving cooperatives which enabled here to use their premises. The cooperatives are supported by various governmental and non governmental organizations. She explained how her company is working with the weavers starting from raw material selection, design, production and cost. She indicated that she benefited from this arrangement.

Ms. Blen representing women with disabilities, indicated that it is encouraging that in the research WEs with disability are included and she wanted to know more on the challenges faced by WEs with disabilities?

Mr. Birhanu Ejigu is a consultant asked about the role of real estate developers in engaging in the provision and preparation of business working premises. What are the costs of private providers? Do they have interest in developing industrial sites, workshops that accommodate the demands of entrepreneurs in particular WEs? He recommended that local governments can encourage real estate developers in this venture.

Mrs. Askale Benti from Muya Ethiopia Plc. indicated the contribution of the company in upgrading the image of Ethiopia. WEs engaged in different business activities have different problems. She indicated that there is a need for a task force from the government to address the demand of WEs. She also emphasized on the necessity for WEs’ bank which will address the demand of WEs.

Mrs. Martha Getachew, owner and manager of Abba Garment, indicated that her company started 3 years ago and she started her business in a rented house where she faced a flooding problem and indicated that most of the machines were damaged at the time. Now she is operating her manufacturing in a rented commercial building complex. She indicated that her location is strategic to customers but the problem is the cost of the rent. She indicated that she is trying to efficiently use the 66 square meters for production, display and office.

Another women entrepreneur raised the issue of information sharing whereby male are better positioned to get access to information and sometimes finance from relatives, friends to start and expand their business. She said there is a need for women to build their capacity in terms of negotiation and coming up with viable ideas. Women have to present their ideas and pursue it persistently. There is a need for experience sharing for WEs.

Mr. Bob Ransom, executive director of ECDD, appreciated that CAWEE included the issue of WEs with disability in the study. He indicated that Women entrepreneurs with disabilities are facing additional challenges. He asked if the cost of brokers and other informal costs are assessed during the study. He suggested the possibility of establishing business information service centers for WEs to provide them with the required information. WEs are not getting adequate information and they are learning by doing. He recommended that these service centers can be run by WEAs.

Another participant of the forum was asking if Information technology can be used to minimize the information gap that women entrepreneurs are facing. As a way of suggestion, she said that to change the attitudinal problem there is a need to have practical interventions.

Mr. Dereje Alemu from ILO, WEDGE program commended the works done by CAWEE and indicated that ILO has conducted a study on growth oriented WEs and that there are recommendations which can be used as supplement to address the issue of working premises. He emphasized on the role of WEAs in addressing the challenges faced by WEs.

Mrs. Yayesh Tesfahunegn from Ministry of Works and Urban Development Women Affairs Department highlighted on the Micro and Small Enterprises Development package where 50 percent of the planned beneficiaries are WEs. She indicated that in the package there are supports given in terms of training, market facilitation and linkage, information sharing and working premises arrangement. She indicated that the challenges faced by WEs have to be addressed by various stakeholders.

Feedback from the consultant and the moderator

The interventions by the forum participants were highly appreciated and most of the issues raised during the discussion were considered to be included in the final version of the study. Since most of the interventions are constructive comments and recommendations, there was full agreement on the issues raised. In addition to the above identified issues the consultant gave explanations on questions raised by the forum participants. The following issues will be addressed by future researches and interventions:

Assessing ways to capacitate WEs to overcome the attitudinal challenges which they are

facing while doing business; Need to analyze and study the issue of finance in relation to overall business growth and

acquisition of working and commercial premises; Assessing the viability of establishing financial instruments which can cater to the needs of

WEs; Develop mechanism to provide business and other information to WEs to upgrade their

competitiveness; Develop mechanism to overcome the challenges faced by WEs with disabilities; Assess the viability of real estate developers to engage in providing business premises for

WEs; Develop mechanism to enable WEAs deliver BDS to WEs.

Concluding Remark His Excellency Donald Yamamato, Ambassador of the United States of America in Ethiopia in his concluding remark appreciated CAWEE because the forum created an important opportunity not only for WEs but also for all stakeholders. He emphasized on the role of WEs as being critical link and pillar for development. He further indicated that working with WEs is highly essential because they have a very heavy obligation as women to ensure development. He concluded his remark by saying that he looks forward to play a role in the success of the WEs.

The Executive Director of CAWEE, Mrs. Nigist Haile thanked H.E. Ambassador Donald Yamamato for his concluding remarks. She further thanked the forum participants for their invaluable contribution and participation and the consultative forum was officially closed.

1.2 Study Findings Topic: Challenges Facing Small and Medium Enterprises Owned by Women Entrepreneurs in Selection and Acquisition of Commercial and Industrial Premises

Mr. Yared Fekade, who is Private Sector Development Specialist, has been working in private sector development areas for the last twenty years at various capacities. Mr. Yared Fekade is educated in economics and in MBA in Ethiopia and UK, he has extensive experience in national and international organizations during which he progressively held various responsible key positions. His experience is broad in the areas of small business and private sector development, with expertise in value chain development, microfinance and knowledge management.

Mr. Yared worked as expert for various government and international organizations in the areas of private sector development, programme formulations policy, strategies and programme evaluations. He played important role in the formulation of the Ethiopian Micro and Small Enterprises Development Strategy.

Currently he is working as Executive Program Officer in the German Technical Cooperation-Engineering Capacity Building Program.

Executive Summary

Among the many challenges facing SMEs owned and operated by WEs in Ethiopia is the selection and acquisition of commercial and industrial land to locate their businesses. For many enterprises, location can be a critical factor which can influence positively or otherwise their competitiveness in the market. Securing the right location can involve substantial legal and financial complexity. The factors affecting choice of location for enterprises will depend very much on the nature of the business. In this study, the major factors which determined the decision of the selection and acquisition of working premises is assessed and the legal framework analysed.

The study consulted ten WEs operating in SMEs at different levels in different sub-sectors. During and after the consultation the specific problems that the WEs face in securing working premises are analysed. Further policy ideas and mechanisms on how best WEs select and acquire commercial and industrial premises are proposed.

It is essential to have greater availability of plots of land and premises in strategic locations for SMEs to produce and market their products. Lack of appropriate premises tends to force many women to operate their businesses from home or resort to unsuitable and sometimes unsanitary working conditions. Site location matters. Indeed, it has become a more critical decision for companies. Today, poor location decision can have much greater and more immediate effects on operating efficiencies and competitiveness.

The plant site selection decision is influenced by numerous factors, such as cost of real estate, availability and cost of labor, property and other taxes, low cost financing provided local governments, availability and cost of transportation, cost of energy and water and distance from suppliers and customers. Some of these are easy to quantify, while others are subjective. It is important to note that proper selection of a future plant site could save a substantial sum of money for the firm and provide it with a competitive edge in the long run. The important thing to remember in a site search is that the site itself is not an end by itself. The site becomes an integral part of two systems: the construction system and the operating system.

Introduction

The combined effect of the changing role of the state and the rise of globalization has placed the private

sector in the forefront of economic development in almost all developing countries. That means, in a liberalized economy both national and regional economic development is unthinkable with out the active participation of the private sector. Like any other country, the private sector in Ethiopia is also expected to be an 'engine' for economic and social development, through its vital roles in producing economic diversification, in creating job opportunities for citizens, equitable distribution of resources and reducing poverty.

Gender equality has been one of the major prerequisites for achieving socio economic development

and growth in any society. In Ethiopia, gender equality is not yet ensured due to the fact that there is an overwhelming domination of men over women in most political, economic and social aspects. When we look into economic aspects, women are very much less empowered to ownership of resources. This is manifested by their low participation in entrepreneurial activities. According to the CSA survey on Small Scale Manufacturing Industries (2006), the share of women owners of small scale manufacturing establishments was only 12.77 percent, which is very low and this shows how women are poorly represented in the private sector. Because of various constraints, women are confined to those activities, which are less productive and less profitable as a last means of survival. That is why the majority of the informal sector and micro enterprise operators are women. The low representation of WEs in SMEs could be attributed to (Zewde & Associates, 2002):

Low levels of education and lack of opportunities for training;

Heavy household responsibilities that leave women less time to devote to their businesses;

Lack of contact with and exposure to the business world;

Meager financial and human capital at the disposal of women ;

Issues relating to ownership rights, which deprive women from property ownership in general and consequently, of the ability to offer the type of collateral normally required for access bank loan.

Among the many challenges facing SMEs owned and operated by WEs in Ethiopia, is the selection and acquisition of commercial and industrial land to locate their businesses. For many enterprises, location can be a critical factor which can influence positively or otherwise their competitiveness in the market. Securing the right location can involve substantial legal and financial complexity.

It is essential to have greater availability of plots of land and premises in strategic locations for SMEs owned by WEs to produce and market their products. Lack of appropriate premises tends to force many women to operate their businesses from home or resort to unsuitable and sometimes unsanitary working conditions. It is increasingly recognized that women's MSMEs can provide an opportunity to stimulate economic growth and at the same time promote a more equitable distribution of development benefits.

The private sector by virtue of its character in demanding customer oriented location needs land administration services that recognize and realize the existing potential of the sector. It is obvious that in this context accessibility to market and labor force are the foremost determinants of enterprise location. The center of an urban area is the most desirable location because it offers the greatest accessibility to the entire urban market. Enterprises tend to aggregate in urban centers for they need to minimize expenses of moving commodities as well as to grasp the niche market.

However, due to varieties of reasons, the progressively incubating enterprises use traditionally acquired land & buildings for their activities. It is common to see most enterprises taking the advantages of their residence as premises. For SMEs in general, lack of premises is unquestionably a major problem. They can rarely acquire suitable locations where they can get easy access to markets.

Lack of adequate working premises is affecting the growth of this leather-craft enterprise, the entrepreneur who is a person with physical disability will face another challenge because she has to relocate from her existing premises because of redevelopment, and the new building won’t be convenient for her because it is a building with stairs.

Objective of the Study The major objective of undertaking such a study is to identify ways to improve the prospects for WEs in Ethiopia and enhance the contribution of WEs to the Economy. To this end, this study has been commissioned to:

➤ Gain better insight and assess the major factors which determine the decision of the selection and acquisition of working premises.

➤ Recommend policy ideas and mechanisms to enable WE best utilize commercial and business premises.

The study is based on desk research and is supplemented by a field research and ten women entrepreneurs engaged in various sectors were consulted. The study was presented on the First Consultative Forum held on September 25, 2008 and constructive comments forwarded during the forum included in the study.

Existing Legal Framework 1 History of Urban Land Tenure and Land Rights in Ethiopia

Land in Ethiopia was, for centuries, the prerogative of the emperor or local nobles to exploit or to grant use rights, a rather shifting situation given the actions of the various dynasties and kingdoms which rose and fell. In 1907 Emperor Menelik II issued the first proclamation which legally recognized private land ownership rights and which called for the systematic registration of land and the issuance of land title deeds. Under what is called the Imperial period, which lasted until 1974, this concept of freehold land became increasingly codified and land administration elaborated through the Ministry of Interior.

In cities, especially Addis Ababa, private land holdings were first highly concentrated in the hands of the aristocracy and those favored by the Court, although by the 1930s a class of entrepreneurs, many of whom were foreign, had begun to acquire freehold rights over urban land parcels. Early master plans in provincial towns were drawn up by the Government of Emperor Haile Selassie, private holdings were registered, and property was taxed through the house or roof tax. Yet the system of urban land tenure through the end of the Imperial period heavily favored the aristocracy and a small middle class. Women were largely excluded at the time from owning plot of lands. Following the overthrow of the Emperor in 1974, the Dergue regime instituted a radical socialist program where all of the means of production were to be acquired and owned by the State. Proclamation No. 47 of 1975 nationalized all land and outlawed private land ownership. However, rights to continue to own individual buildings for residential purposes (one dwelling per family, but not the land associated with them) was allowed. All excess urban rental housing (of which there was a considerable amount) came under the ownership and administration of local district units called Kebeles. Rents for these units were set at very low values, and significant portions of the housing stock in many towns remained under this Kebele house rental system.

Under the Dergue’s Ministry of Development, new urban land, its disposal and development, became a matter of administrative task. Large amounts of urban residential lands were allocated through the system of housing cooperatives, and members of these cooperatives receiving individual land parcels upon which they could build their own dwellings. These land parcels were subject to a land rent (sometimes called the “permit” system) and in addition the dwellings were subject to a roof tax. Both the urban land rents and the roof tax were set at very low levels. The system was not accommodating, in a coordinated manner, demand of plots of land for private investment.

Following the removal of the Dergue regime in 1991, the new Government promulgated the Urban Land Lease Proclamation (No. 80 of 1993) which introduced the concept of leasing new land to individuals and investors for a set period of time (usually between 30 and 99 years), with rights and obligations and the possibility of renewal, yet with ultimate ownership and rights of re-possession retained by the State. Following nine years of trial and error application of this leasehold system, new legislation repealed the earlier proclamation and re-enacted an improved leasehold system under the Re-enactment of Urban Lands Lease Holding Proclamation (No. 272 of 2002). Following from this legal framework, the different Regional States in Ethiopia have been developing Regional Legislation to codify and regulate the leasehold system for urban lands. 1Delivery of Urban Land and Housing in Addis Ababa: Transition Issues in a Low Income Economy June 28, 2005

It should be noted that the leasehold system applies only to new land. Legislation has been developed

to regulate older lands and define the rights of its users, and once “permit” parcels are transferred or sold to a third party, such parcels are converted to the leasehold regime. It should also be noted that the Dergue regime concept of allowing private ownership of buildings but retaining ultimate state ownership of the associated land remains under the current legislation defining land tenure in urban areas.

Urban Land Markets

Most cities and towns in Ethiopia can be described as “emerging” and all are characterized by large amounts of land which are being or will be transformed from State to private use at an accelerating rate. Older lands in towns are either retained in the public domain or operate under different forms of private use, with ultimate ownership held by the State’s legal authority, the Municipality. How do land markets (defined as the process of exchange of land and the monetary values which determine this exchange) behave in this situation? What are the emerging trends? What issues can be identified which are of relevance to improved land management of rapid urban growth? These are the questions that this part of the study will attempt to answer.

There is significant international experience and literature about urban land markets in developing countries and countries in transition. There is much less about land market dynamics in the specific situation which pertains to Ethiopia: That of an overwhelmingly rural and poor developing country with a rapidly emerging urban sector where all land and most property had been nationalized under the socialist regime, only to be progressively subjected to limited market forces less than two decades later. It is tempting to apply fully the knowledge of urban land markets in other countries to the situation in Ethiopia, but this can lead to unauthentic conclusions and can actually mask important issues, and that useful understanding of land markets in Ethiopian towns can only come from a close look at the local context.

Elements of Urban Land Supply In order to structure the discussion of urban land markets, it is important to disaggregate land which appears on land markets in Ethiopia into three main types coming from three sources:

Formal Supply of Existing Land Parcels

Formal supply of existing land parcels comes from those wishing to sell the use rights they enjoy over parcels which are either under the “permit” rent system with land deeds (still the majority of land parcels in any town, especially in the older districts) or which are under the leasehold regime (usually on the fringes of towns). In both cases there are few legal restrictions to this transfer of rights. For “permit” parcels put on the market, a transfer tax/fee is assessed based on an assessment of the value of the structure on the parcel, as well as a capital gains tax, before the parcel transfer can be recorded and a new title deed is issued. The new owner assumes the land rent obligations. For leasehold parcels similar transfer fees are assessed, and in addition the new owner assumes the original leasehold contract obligations. Such leasehold parcels cannot be transferred until a structure is built on the land, and this structure becomes the object for the determination of the transfer tax.

Formal Supply of New Land Parcels

In most towns, all formal news lands are supplied through the leasehold regime by a set of prices and regulations administered by the relevant municipality, through its land administration department. The large majority of such new parcels are leased according to regulations which set the annual lease rent per m2, the period of lease, and restrictions on parcel exploitation (land use, building regulations as determined by master plans). Parcels are set out according to the availability of raw land and this is dictated by the master plans, and the method of allocation is a kind of rationing system. Thus for the vast majority of this kind of land, supply can be termed “administrative” rather than true supply on a free market. In a minority of land parcels, those with commercial or high-end residential potential, supply is allocated by negotiation or auction, again according to a set of regulations as to procedures and as to who can bid. This auction type of leasehold land release can be said to approach supply on a true land market.

Informal Supply of New Land Parcels On the fringes of most towns including Addis Ababa are found rural settlements made up of small farm holdings, usually enclosed compounds with small fields, orchards, and rural houses. Sometimes these are even large villages or small market centers, and they may be inside master plan boundaries or just outside of them. As they come under urban pressures, some farmers can realize significant financial gain by parceling off some of their lands to informal buyers. Usually these new parcels come without any documentation or title, and the process is discouraged by officials. Yet for many, this is the only straightforward and affordable means to access land for simple housing.

Elements of Current Land Demand To understand how demand for land is expressed in urban land markets, it is important to disaggregate such demand into three main types which correspond to the three main types of land supply:

Formal Demand for Existing Parcels Any Ethiopian individual or enterprise can seek out and purchase older “permit” land parcels through the cash parallel market and can acquire the same legal rights (as well as rent obligations) as the former parcel occupier. Transfer fees and taxes apply, as well as commissions set by real estate brokers should these be used. The same can be said for newer leasehold land parcels, although in this case there must be a structure built on the parcel and the original leaseholder cannot be in default of the terms of his or her leasehold contract.

Formal Demand for New Parcels Those individuals and enterprises wishing to acquire land parcels through the leasehold regime must conform to the administrative dictates of that regime. For those individuals seeking modest residential plots, they can: (i) Either make a direct application to the relevant municipality or (ii) Join/form a housing cooperative which in turn makes a collective application. In the case of individuals, basic criteria must be met (minimum age 18, proof of residence in the city, a declaration of no property ownership, and payment of fees). Approved applications then join a waiting list, and housing plots are allocated by lottery when the municipality prepares and sets out parcels. In some towns a significant payment into a blocked bank account is required to ensure financial capability to build a house, with the amount released upon completion of house foundations. In the case of housing cooperatives, 12 to 30 individuals must form the cooperative and complete all administrative procedures. The cooperative’s application in general receives priority, and land is allocated to the cooperative. Only when all individuals build a structure on their plots individual titles are issued.

Informal Demand Not much is known about the individuals who seek to acquire/purchase plots of land from farmers on the fringes of towns. Such purchase is always for cash and will either be confirmed by a simple paper contract (possibly endorsed by the rural Kebele or farmers association) or by power of attorney. Presumably they are simply seeking a small plot of land to build a house and cannot meet the requirements under the formal lottery system or do not wish to wait until their chance comes up. However, there is anecdotal information that some acquire these plots for speculative purposes.

Market Actors, Information and Efficiency It is not possible to make definitive conclusions about land market efficiency based on rapid and small surveys. There is a need to institutionalize a system to assess the land market efficiency. First, the parallel cash market seems to be quite active and to be well articulated through informal as well as formal brokers “delala”. The larger the town the more active is the market and the more can it be used to approximate real land market values. The prices of land on offer (or recently sold) within a city seem to vary logically according to land market parameters, i.e. in terms of location/accessibility, infrastructure services, and commercial potential. Certainly there is an element of speculation and “hope values”, but this will be found in any urban land market anywhere.

The information generated by the cash parallel land market is easily available to all who have a little time to spend with brokers and gives good indications to sellers of what the market will bear and to buyers of the choices and prices available. This information is not, however, organized or analyzed, particularly in the sense understood by property analysts in Western economies. It is remarkable that a more and deeper effort to understand the parallel cash land market in Ethiopian cities appears not to have been undertaken.

Land Transaction Costs and the Impact of Land-Related Fees and Taxes There are impediments to the free exchange of properties on the parallel cash land market. These are mostly the costs (property transfer taxes and the commissions charged by brokers) and the hassles related to property re-registration (which including the assessments of building values, are said to take up to two months). Certainly the bureaucracy could be streamlined, and were better organized information of land values available to buyers and sellers, the brokers would be forced to reduce their commissions. WEs are most of the time disadvantage because they can not easily access the information.

Set up Initial Land Prices for Auctions, Negotiations, and Subsidized Tenants The first two cases (auctions and negotiated prices) have two distinctive sub-tasks:

(i) Setting up starting prices when leasing only begins in a city and (ii) Adjusting them as part of on-going leasing practice.

Defining Starting Prices for Auctions In general, the starting prices should be close to market prices of similar land plots (i.e. plots for similar land use, at similar location, similar size, and with similar land rights). How to find such market prices? There are two major sources of information: prices in transactions on the secondary real estate market (i.e. between private owners) and prices obtained at previous auctions. Several types of information should be quantified and mapped:

Locations, sizes, intended uses, and sale prices of plots sold in land lease auctions, Locations, sizes, intended uses, and reported prices of plots sold through private real estate

sales. In addition, land managers should have information on starting prices for plots offered on auctions but not sold:

Locations, sizes, intended uses, and starting prices of plots offered and not sold in auctions.

So, starting prices should be defined close to prices in similar transactions. To simplify the task, land managers may divide the city into several price districts and set up a “base” starting price for the whole district. Then, for each particular site, modify this “base” price up or down depending on a site’s location within the district and site’s size. Then, the “base” prices should be revised quite regularly, to reflect the prices in transactions that have happened since the previous revision.

Finance The current law in Ethiopia enables commercial banks to extend credit collateralized by structures, i.e. construction and mortgage loans. In addition, according to the banks, the foreclosure law, allowing non-judicial foreclosures, works well. But the banks need a registered title to back the claim. While the law allows for this, timely availability of title and registration remains a problem. To address this issue, the ongoing titling initiative should be made a government priority.

A women entrepreneur who owns a hand-weaving export business has devised a strategy to alleviate the space problem she encountered by outsourcing some of her production activities. She gives training to the small weavers and she collects and exports the products. It is one of the best examples in overcoming space problem through outsourcing.

Checklist for Selecting Location2

It is essential to have greater availability of plots of land and premises in strategic locations for SMEs to produce and market their products. Lack of appropriate premises tends to force many women to operate their businesses from home or resort to unsuitable and sometimes unsanitary working conditions. Site location matters. Indeed, it has become a more critical decision for companies. Today, poor location decision can have much greater and more immediate effects on operating efficiencies and cash flow. The plant site selection decision is influenced by numerous factors, such as cost of real estate, availability and cost of labor, property and other taxes, if local government is providing low cost financing, availability and cost of transportation, cost of energy and water and distance from suppliers and customers. Some of these are easy to quantify, while others are subjective. It is important to note that proper selection of a future plant site could save a substantial sum of money for the firm and provide it with a competitive edge over the long run. The important thing to remember in a site search is that the site itself is not an end. The site becomes an integral part of two systems: the construction system and the operating system. While the site may be one of the less expensive components of these systems, the availability of services and the quality of the site are the foundation upon which the total production system is built.

In addition to understanding the factors influencing location selection among firms, attention needs to be given to the actual decision making process. From a marketing perspective the purchase or leasing of operational facilities by firms is a process of industrial or organizational buying behavior that has been subject to substantial study. Depending on the size of the organization, the buying behavior may involve a multi-phase, multi-person, multi-departmental and multi-objective process. In this sense the distinction between the large firm and the SME can be drawn. Smaller firms are less likely to have the complexity associated with the purchasing process than their larger counterparts. Nevertheless it is important to understand the process of organizational buying, as it is against this framework that the SME purchase decision can be compared.

SMEs, particularly the micro and small firms, are more likely, than their larger counterparts, to seek closer proximity to customers. This is also likely to be influenced by the nature of the industry that the firm is in, with retailers seeking greater access to customers, but this difference cannot be fully explained just in terms of industry type. As many micro and small businesses have a relatively limited customer base, this is a critical decision factor for them. Many industrial estates work like shopping malls, they require one or two large “anchor” firms to establish themselves in the estate, around which a large number of small firms then cluster. These small firms are usually suppliers to the larger firms.

The following points need to be considered to address issues related with site selection, assessing existing location and planning plant and facility maintenance by an entrepreneur.

Choosing the General Area

Do you think your business location is convenient for your customers? What are your indicators? Can you minimize transport and storage costs on inputs/raw materials necessary for your production

and services with your existing location? Is it convenient for travel to and from work, for yourself and for your key staff? If your staff will travel to

work by public transport, how close is it to frequent and reliable routes? Do you need to cover transport costs for your staff which can affect your cost competitiveness?

Are you planning to relocate your business to another part of the city/country? What are your main reasons? Will it bring additional advantages in terms of competitivess to your business?

List down the comparative advantages of your business location compared to your competitors? Do you have a strategy to change your location comparative advantages into competitive advantages? Do you need to outsource some office support services to gain more space for your production

facilities? Do you think it will minimize your cost and increase your efficiency? Have you consulted relevant master plans and development plans concerning the future development

of the area where your business is located? How will it affect your business?

2 Source: Small business toolkit/TET manual

Choosing the Premises

Who, and what, will need access to the premises? Can you foresee any problems for vehicles, pedestrians, for loading/unloading?

Is there adequate car parking for staff, customers and other visitors? Is the building surrounded by others which appear to be in good, successful use, or in a run-down

area? The latter case may reduce the cost, but customers need to feel comfortable in visiting your production/marketing premise?

What is the condition of the property? Will you need to spend a lot of money to bring it into working condition?

Is the building safe and secure? Is it the right shape and size, with the rooms you need, including ceiling heights? Have you listed

carefully the space you will need for each part of your operation? Are the heating, lighting, power supplies, ventilation, waste disposal systems, etc. suitable? Are the necessary connections to telecommunications systems readily available? If it is on more than one floor, is there an adequate lift as well as stairs? Is it friendly for persons with

physical disabilities? Does its external appearance present the kind of image you want to project, especially to customers? Even if the size and layout are right for the present, is there scope for flexibility and expansion as your

business develops and grows, or will you need to move again? (Remember to be realistic about growth predictions, and be careful not to over-invest in expensive facilities at an early stage).

Are there any local laws or regulations, licenses to be obtained or restrictions on use, which might make it difficult to operate here? Is your kind of business subject to special regulations?

What insurance will you need, and will there be any additional insurance costs relating to this choice of premises?

If you are intending to rent the property, rather than buy it, what hidden terms are there in the agreement (for example, a requirement that you renovate the premises when you leave)?

Are there key people in your business, with particular know-how, who need to be closely involved in evaluating the possible new location? Have you involved them?

And finally, the overall cost after adding up all the costs of purchase or lease, of taxes and all other service charges, is it affordable within your budget?

Plant & Facilities Maintenance

When was it that you lastly carried out a safety audit on your plant and equipment? Are all your machines adequately guarded, to prevent accidents to operators and people nearby? Are the noise levels acceptable?

How often do you check for compliance with environmental pollution regulations? In your organisation, do you know which items of equipment, and which systems (such as power

supplies, or water) are the most critical to uninterrupted operation? Have you carried out an analysis of the risk to these, and ensured that you have emergency and backup arrangements?

Have you identified the actions which you could take, either by making changes or by careful monitoring, to minimise the risks of plant failure and downtime?

Do you carry out regular planned maintenance; on at least a list of the items of plant and equipment, which are most vulnerable to performance reduction or failure?

Do you keep note of time and money spent on maintaining and repairing equipment so as to be able to identify when replacement will be more economic?

Have you evaluated your various maintenance and servicing activities and established, on the basis of cost and quality, what you should do internally and for what you should employ contractors?

Do you carry out systematic cleaning, maintenance and overhaul work on facilities and equipment to comply with regulations covering either the nature of the equipment or the industry in which you are working?

Do you have, either in your own stock or in a nearby shop, rapid access to critical spare parts in case of breakdown?

Getting the Right Factory Layout The efficiency of a manufacturing facility depends on a number of factors, including the layout of machinery and departments. Typical plant layout procedures determine how to arrange the various machines

and departments to achieve minimization of overall production time, maximization of turnover of work-in-process, and maximization of factory output. (Sadan Kulturel-Konak, 2005)

Production uncertainty is one of the most challenging aspects in manufacturing environments in the 21st century. The next generation of intelligent manufacturing is dynamically depending on the production requirements, and success in designing agile facilities is closely related to what extent these requirements are satisfied. Getting a factory's layout right can pay big dividends both in terms of capital cost and ongoing operating cost, by minimizing wasted space and wasted movement.

Conclusions

A good location is one of the most crucial factors essential for market development hence the choice of location should therefore be carefully considered. The location should also be differentiated in terms of marketing outlets or factory locations. Location analysis and site selection may involve analysis of proposed location in terms of many different location factors. Equally important is to determine the floor space required by the business and more importantly how the factory space is going to be laid out in terms of the spatial arrangement of the machines and equipment. WEs have to be knowledgeable in site selection and location analysis.

The following relevant points have to be considered for future interventions:

Assessing ways to capacitate WEs to overcome the attitudinal challenges which they are facing while doing business;

Need to analyze and study the issue of finance in relation to overall business growth and acquisition of working and commercial premises;

Assessing the viability of establishing financial instruments which cater to needs of WEs; Develop mechanism to provide business and other information to WEs to upgrade their

competitiveness; Develop mechanism to overcome the challenges faced by WEs with disabilities; Assess the viability of real estate developers to engage in providing business premises for

WEs; Develop mechanism to enable WEAs deliver BDS to WEs.

The owner of the textile woven products company rented 66 square meter working premises in one of the well known commercial building complex. She used efficiently the small space for production, display and office. She used even the walls in a creative way to get the maximum out of the small space she rented.

References Assessing risk in emerging markets, Ann Moline Plants, Sites and Parks; Global Markets

Oct/Nov 2001 Approaches to uncertainties in facility layout problems: Perspectives at the beginning of

the 21st Century Sadan Kulturel-Konak May 2006 Delivery of Urban Land and Housing in Addis Ababa: Transition Issues in a Low Income

Economy June 28, 2005 Does environmental regulation matter? Determinants of the location of new

manufacturing plants in India in 1994, the World Bank Muthukumara Mani, Sheoli Pargal, Mainul Huq November 1996

Emerging Industries, Emerging Locations Jennifer LeClaire Area Development Site and Facility Planning; Dec 2007/Jan 2008

Industrial location in the United States: Some new evidence Herzog, Henry W Jr; Schlottmann, Alan M Survey of Business; Summer/Fall 1993

Industrial Location and Spatial Inequality: Theory and Evidence from India Somik Vinay Lall and Sanjoy Chakravorty Review of Development Economics, 9(1), 47–68, 2005

Jobs, Gender and Small Enterprises in Africa Preliminary Report Women Entrepreneurs In ETHIOPIA by Zewde & Associates ILO Office, Addis Ababa October 2002

Location characteristics of manufacturing investments in the U.S Ulgado, Francis M Management International Review; First Quarter 1996

Location models with groups of demand points Zvi Drezner; George O Wesolowsky INFOR; Nov 2000

Retail location at the micro-scale: Inventory and prospect Brown, Stephen The Service Industries Journal; Oct 1994

SME Competitive Strategy and Location Behavior: An Exploratory Study of High, Craig S Galbraith; Carlos L Rodriguez; Alex F DeNoble Journal of Small Business Management; Apr 2008

Toward guiding the selection of a layout procedure Mohsen M.D. Hassan Department of Operations Management and Statistics, Sultan Qaboos University, Muscat, Sultanate of Oman March 2006

1.3 Recommendations of the forum

Regional/Local governments should be encouraged to set aside land for the business location of WEs;

Develop clusters and business incubators;

Develop packages to build the capacity of WEs in site selection and layout planning;

Assess the viability of real estate developers to engage in providing business premises for WEs;

Instruments and legal frameworks have to be in place to pledge land use rights as collateral;

Various stakeholders should take into account the issue of disability when designing buildings, developing projects;

Existing facilities have to be adjusted wherever possible to become disability friendly;

Encourage and support WEs to use professional tools in site selection, acquisition and layout planning;

Information technology can be used to minimize the information gap that WEs are facing;

To change the attitudinal problem there is a need to have practical interventions which will upgrade the capacity and bargaining power of WEs;

Develop packages to capacitate WEs to overcome the attitudinal challenges which they are facing while doing business;

Need to analyze and study the issue of finance in relation to the overall business growth and acquisition of working and commercial premises;

Assess the viability of establishing financial instruments which cater to the needs of WEs;

Develop mechanism to provide business and other information to WEs to upgrade their competitiveness;

Develop mechanism to enable WEAs deliver BDS to WEs.

2. Women Entrepreneurs Associations in Ethiopia: Opportunities and Challenges

2.1. Forum Proceedings

The Second Consultative Forum on “Women Entrepreneurs Associations in Ethiopia: Opportunities and Challenges” was organized by CAWEE on November 27th, 2008 at the Hilton Addis in Addis Ababa. The Consultative Forum had the participation of 225 participants (155 women and 70men) representing stakeholders from policy makers, implementers, business associations, Chambers of Commerce, NGOs, academic institutions, consultants, researchers, WEs, donors and other concerned development partners that promote the causes of women in business. In order to facilitate the participation of forum participants with disabilities, there was a sign language interpreter assigned.

The Consultative Forum was inaugurated by the opening speech of Her Excellency Ubha Mohammed, State Minister, Ministry of Women’s Affairs, delivered by her representative. The keynote addresses were delivered by His Excellency Donald Yamamato, Ambassador of the United Stated of America in Ethiopia, Ms. Maria Cruz, Head, Spanish Development Cooperation office and Mr. Philip D'Odwyer, Director, “Connect Ethiopia”. The welcoming Speech was made by Mrs. Nigist Haile, Executive Director of CAWEE. The proceedings of the conference and the Consultative Forum received a wide coverage by the local press including TV, radio, newspapers and website.

Participants registering Participants attending the forum

Inaugural Session 27th November 2008 14:00- 15:10 hrs

Start of the consultative forum

• Mrs. Saba Gebremedhin, Director of the NEWA, the Consultative Forum moderator welcomed the

distinguished guests and participants. • Mrs. Nigest Haile, Executive Director of CAWEE in her welcoming speech, highlighted the main activity

areas of CAWEE since its establishment in June 2004. CAWEE mainly targets the promotion of Ethiopian WEs, with a special focus to women exporters. She further indicated that the mission of CAWEE is to promote Ethiopian WEs, with a special focus to women exporters, both existing and potential or emerging exporters. She indicated that beyond the provision of export focused business development services, CAWEE is also involved in facilitating business contacts in cooperation with organizations like “Connect Ethiopia”. Encouraging results are being registered with this initiative. The efforts of CAWEE in the promotion of Ethiopian women in business are further complemented by the interventions of the WEG facilitated by the US embassy. Apart from the provision of export focused business development services and facilitating business contacts, CAWEE is also involved in advocacy work with the aim of targeting on issue areas, challenges that women in business face.

She further highlighted that It is important that WEs are having as many associations as possible, so that their voices, in the respective areas of interest are very well heard. The point is how strong are those associations in providing the expected services to their members, how best they need to work on a collective voice so that they can be heard and how to ensure national representation? She underlined the point that the research finding can provide relevant information and that all the contributions from this forum participants can enrich the findings. Mrs. Nigist, in her welcoming speech further encouraged participants that it is high time to discuss & come out with workable recommendations on how best the collective voices of WEs, through sector specific as well as through strong national WEAs, can be heard very well and brings out transformation that can really bring out changes in the status of Ethiopian WEs.

Mrs. Nigest, Executive Director CAWEE

In concluding her speech, Mrs. Nigest said that it is expected that this particular project will be an instrument to identify policy ideas, opinions and workable recommendations for the way forward. The findings that target policy ideas and recommendations are believed to serve as a major tool for further interventions by all concerned development partners in the promotion of women in business in Ethiopia.

Ms Maria Cruz, Head Spanish Development Cooperation Office, Addis Ababa

Ms Maria Cruz , Head Spanish Development Cooperation Office in Addis Ababa started her speech by expressing her pleasure to address the second consultative forum on “Women Entrepreneurs Associations; Opportunities and Challenges”. She explained in detail how the Spanish collaboration and partnership in promoting the African development agenda, and particularly Ethiopia’s, has increased dramatically in the last few years. She further highlighted that one of the instruments has been the establishment of the Spain-NEPAD Fund devoted to support initiatives addressed to the empowerment of African women.

Ms. Maria Cruz explained that gender equality and the empowerment of women is a major priority for the Spanish Government, as it is for the Spanish Cooperation Agency, where gender equality in opportunities, alternatives and responsibilities for women and men is considered a main prerequisite for development and a fundamental factor for effectively and sustainably fight poverty. She concluded her remark by congratulating CAWEE on its efforts to fully promote and support the development of WEs, by promoting a spirit of collaboration among them, and increasing their professionalism.

Her Excellency Ubha Mohammed, State Minister, Ministry of Women’s Affairs delivered her official opening speech through her representative. H.E. highlighted that the Government of Ethiopia has given great importance and special focus to promote women in different spheres of development, where the economic empowerment of Ethiopian women is given greater emphasis. In implementing the National Women’s Policy, diverse institutional machineries are set in place at different levels. Those institutional machineries operating at different levels are very influential in promoting women in the diverse area of interest. The Government in giving prominent emphasis to the empowerment of women has established the Ministry by upgrading the women’s affairs office, which was operating at the Prime Minister’s Office as women’s affairs, to Ministerial level. H.E. indicated that this shows the commitment of the Government in addressing gender concerns in the political, social and economic development spheres. H.E. concluded her speech by assuring that the efforts of the Government of Ethiopia, to empower women economically will be further strengthened and that her Ministry will continue to closely work with non-state actors like CAWEE to further promote Ethiopian Women in Business.

His Excellency Donald Yamamato, Ambassador of the United Stated of America in Ethiopia, in his

speech indicated that there are great challenges in economic crisis. Underlining the date November 27 being thanks giving day, the Ambassador said that it is a thanks giving because there is a new beginning in the United States from coast to coast, from North to South which is a celebration of not only of a new President but also new ideas. H.E. further highlighted that the US has made efforts to support and invest in girls’ education in Ethiopia which is an instrument to alleviate poverty and create a vibrant and dynamic society. He indicated also that the AmCham in Ethiopia has been launched, which is the third in Sub Saharan Africa. The Chamber looks at all the opportunities not only for WEs but for all entrepreneurs and connects them to the biggest part in the world and also to the world wide network of enterprises.

His Excellency Donald Yamamato, Ambassador US Embassy, Addis Ababa

H.E indicated that the other area that the Embassy is working on is loan guarantee and this is the credit guarantee which is important because it gives opportunities not only for WEs but for all groups especially the Diaspora which is bringing more investment and expanding opportunities not only for women but to all groups in society.

Mr. Philip D’Odwyer, Director, Connect Ethiopia, Dublin, Ireland, in his remark explained that “Connect Ethiopia” is business organization based in Ireland comprising of business men and women with commercial attitude in bringing more business men and women as capacity builder to Ethiopia through trade mission few times a year.

Mr. Philip D'Odwyer, Director, Connect Ethiopia, Dublin, Ireland He further highlighted the existing network between CAWEE and Connect Ethiopia and described it as a very structured network. It is aimed to increase trade with Ireland as well as elsewhere with an export focus in particular. But also the cooperation engages capacity building for WEs’ empowerment through trade. And it is believed that it is one of the best ways forward in terms of building, empowering women and making them more productive.

Technical Session - Topic: Women Entrepreneurs Associations in Ethiopia: Opportunities and Challenges

27th November 2008 14:45 -15:30 hrs

Moderator: Mrs. Saba Gebremedhin

Presenters: Mrs. Desta Solomon Rapporteur: Mr. Yared Fekade

Objective of the Study:

Assess the strength and weaknesses of WEAs operating in Ethiopia and provide recommendations to further strengthen the WEAs;

Propose ideas and recommendations on how best concerned partners can contribute their level best in strengthening WEAs.

Desta Solomon, presenting the study

1. The Study Covers:

Addis Ababa WEA Southern Region WEA Amhara WEA Ethiopian Women Exporters Association WEs with Disabilities Deaf Entrepreneurs (operating under the umbrella of Ethiopian Federation of Persons with

Disabilities) National Network of WEAs

2. Methodology

Interview of leaders and ex-leaders as well as staff of WEAs Review of studies conducted mainly by ILO and WB (e.g. Ethiopian Women Entrepreneurs:

Going for Growth, ILO 2003 and Building the Capacity of BMOs, WB 2005) Own experience of working with WEAs and Chamber of Commerce in the past

3. Introduction

BMOs refers to various organizations where companies or individual entrepreneurs are members BMOS are:

Non profit, Democratically guided, Membership organizations,

• Finance themselves by a mix of membership dues, service fees, and subsidies from government or donors,

• Intermediary networking and self regulatory organizations. Types of BMOs There are two categories:

• Chambers of Commerce with large and diverse members and interests, • Associations with relatively smaller and more homogenous members.

Functions of BMOs

• Provide demand driven services to their members, • Advocate and represent the interests of their members, • Facilitate networking.

4. Overview of WEAs

• 9 Regional WEAs (A.A., Amhara, Tigray, Oromia, Southern, Somali, Benishangul, Harari, Dire Dawa) and several city based branches,

• WEs with disabilities, • Two Exporters Associations and forums (Ethiopian Women Exporters Association and Dire

Dawa Women Exporters Forum), • National Network of WEAs.

Regarding the membership profile, most have diverse members from all sectors and all sizes of businesses. Few have more homogenous membership such as the Exporters Associations, WEs with disabilities.

5. Services

• Most common services are:

Organizing bazaars and exhibitions, Facilitating trainings, Promoting networking and information exchange, Secretarial services, Lobbying for access to land and finance.

• Organization/Resources:

Capacity varies significantly, Few have capacity to provide services (e.g. Amhara WEA, EWEA), Income from members is very low, Most associations are struggling financially, Only few have employed staff- mostly covered by donor funds.

6. Achievements

• Raised the profile of WEs, • Sustained promotion of the products and services of WEs through participation in bazaars

and exhibitions, • Facilitation of training and capacity building for members, • Few associations like the Amhara WEA are able to promote the products of WEs locally and

in international markets.

7. Strengths, Weaknesses, Opportunities and Threats (SWOT) Analysis Strengths

• WEAs have better capacity than the first generation of WEAs, • Voluntarism among leadership and members to contribute to success, • Better quality leadership with exposure, good networks and influences, • Improved networking among WEAs.

Weaknesses Weak Governance:

• Lack of systems for transparency and accountability danger of ‘elite capture’, • Conflict of interest, • Competition between personal business and association roles, • Lack of trust among members and leadership.

Organization and Membership:

• Very weak organizational, human resource and financial capacity including organized secretariat with staff,

• Too much dependence on individual leadership for day to day management, • Weak systems , plans and processes, • Very weak membership base because of awareness, lack of benefit and multiple

membership, • Not inclusive of women with disabilities.

Services to Members:

• Overambitious plans and little performance, • Donor dependence, • Skewed services to few members because of diversity of membership, • Services are not demand driven.

Limited Capacity to Work at Policy Level:

• Absence of strong national representation of WEAs nationally and internationally, • lack of awareness and participation in policy advocacy issues at national and Africa levels

such as EPAs, the draft CSO law, etc, • Weak networking and collaboration with other associations and networks.

Opportunities

• Increased awareness and appreciation of the need to promote WEAs generally, • A growing number of young WEs with business skills, experience and motivation that could

potentially contribute to strong associations, • Donor interest in private sector development, • Less bureaucracy for registration of associations, • Opportunities for linking up with Africa wide regional networks exist, • Ethiopia has signed up to international framework agreements on the rights of persons with

disabilities. Threats

• Unfavorable attitude towards women in general and women with disabilities, • The socio-economic and cultural factors- e.g. education, skills, exposure, right to ownership, • The position of women in society- confidence, socially ascribed roles, domains, etc, • Under developed private sector- low growth, low skill, suffering from financial and other

resources, etc • Negative perception about the role of associations (weak, ineffective, self-serving).

Key Recommendations Leadership:

• Empowering members, • Establishing advisory board, • Encouraging new generation of entrepreneurs to the leadership positions developing

succession plan, • Audit and annual reports need to be preconditions for support by donors, • Enforcing the requirement of renewal of registration by Charities and Societies Agency.

Building Systems and processes:

• Sustained capacity building support to WEAs, • Recruitment of key staff for associations with autonomy-strong secretarial staff, • Form advisory group from prominent personalities, professionals and women activists

(lawyers, bankers, economists, etc). Financial Sustainability:

• Develop a business plan with clear indication of financial needs, • Identify short term and long term sources of finance and strategies for resource mobilization, • Lobby with government for supporting sustainable source of income.

Services for Members:

• Clear articulation of purpose and focus, • Survey and identify members needs and expectations, • Identify services that could best be provided by the associations, • Integrate gender dimensions, tailoring to the needs of WEs.

Floor Interventions:

Mrs. Atsede Zerfu from UNIFEM, Country Office Director, appreciated the efforts done so far by associations but said that there is still need to use and build on opportunities. She emphasized that there is a need for an umbrella association which includes micro, small and medium companies so that linkage can be established. She further outlined that there is problem of clarity, responsibility and accountability. The associations need to have bylaws and code of conduct. She also stressed on the need for international representation with Executive Board and Advisory Board established separately.

Mr. Temesgen Omer, from the Women’s Affairs Directorate, Ministry of Foreign Affairs, appreciated the presentation and indicated that, if the services delivered by the associations are attractive the WEs will be encouraged to be members of the associations. If there are more members the associations have to deliver services using various expertises. He indicated that the role of donors has to be supportive for some period of time. There must be an umbrella association that serves all members at different level of business levels.

Mr. Mesfin Shiferaw who is a consultant, highlighted on how WEs can work together. He said that there must be trust and respect to work together. This requires a culture and thinking change; there is need to have changes in perception and mindset. The other most important thing is the entrepreneurship training which can change women ways of doing business. Institutions like CAWEE can support along these lines. Promotion is based on the individual ability to perform in different situations then leadership can emanate from this.

Ms. Taibba Hinkson, Coordinator of Canadian NGOs under the Ethio-Canada Cooperation, Addis Ababa Office indicated that the structure of the existing associations is centralized and if the associations can be restructured with sub-committees and task forces, she said that the efficiency of

the associations can increase significantly.

Mrs. Tsehay Assefa, Head of Women’s Affairs Department in the Civil Service Agency asked why the

study did not cover the emerging regions. The other point is capacity building which can address the system, the structure and the capability. She asked if donors are addressing these issues at grass root level. She further emphasized that financial sustainability can come through membership fee and contributions.

Mr. Sher Verrick from the UN- ECA, ACGSD, highlighted that at the ECA, they have started to work to promote young women entrepreneurs in growth oriented areas. The question is how women entrepreneurs associations are involving young women entrepreneurs. He said another challenge for women entrepreneurs association is working with micro enterprises.

Mr. Andualem Tegegne, Consultant and who was former Secretary General of the ECC talking about women entrepreneurs association he said that leadership is not the central issue. But many women entrepreneurs lack entrepreneurial talents. Those women who have seen the outside world might see the need for associations. What is important is what the members are expecting from the association. Secondly technology has to be looked at. Thirdly, domestically how many small businesses are emerging and dyeing has to be analyzed. In Ethiopia the culture of working in partnership in business is not common.

Mrs. Assegedech Woldeleul, trainer in International Trade and Consultant said the main reason to join association is to get the benefits from membership. What is the objective of being a member? Members want to contribute but also need to benefit. How sure the members are about the fee utilization? The other point is motivation related to identity. It is true that the members have different products there is a need for benchmarking, quality packaging.

Mrs. Hikmet Abdella, Country Director of the ACCA, said that the reason for us to be here is because of previous associations’ initiatives and contributions. A commendable work has been done. It is very important to discuss the membership base. Segmentation is not done in terms of association members. Stakeholders who are representing the women entrepreneurs at international level have to be well informed and networked. The other point is the survival of the fittest with many associations. The enforcement of by-laws and accountability is missing. Young leaders are needed because of the need for competency with the idea of succession. Encouraging young entrepreneurs is essential. The financial viability has to come from membership.

Mr. Ginjo Giya from Community Vision Ethiopia Community based NGO, working in Gamo Goffa which is in the western part of Ethiopia, asked about the legal formation of WEAs and how these associations are linked with their members.

Ms. Almaz Wondemu, Consultant asked why the Ethiopian WEAs took a national name whereas it does not have national representation.

His Excellency Ato Ayele Seyoum, MP and Deputy Chairman of the Trade and Industry Affairs Standing Committee, said that he is very much in favor of entrepreneurship development. He emphasized that MPs have to closely work with CSOs like CAWEE, hand in hand.

Mrs. Sossena Demissie who is a consultant emphasized that the membership database of associations has to be disaggregated to address the need of the different members.

Ms. Rukia Kidahis from Addis Ababa University, Institute of Gender Studies, emphasized on the issue those women enterprise owners have to consider, the social dimension, mainly their family relationship to become successful.

Ms. Saskia Kloezeman, Country representative from Exchange Belgium said that they want to further collaborate with CAWEE to address the issues of WEs.

Feedback from the consultant and the moderator The interventions by the forum participants were highly appreciated and most of the issues raised during the discussion were considered to be incorporated in the final version of the study. Since most of the interventions are constructive comments and recommendations, there was full agreement on the issues raised. In addition to the above identified issues, the consultant gave explanation on questions raised by the forum participants. The following are issues which will be further addressed by future researches:

Develop modality to have clear system, objective for association membership in terms of management, by-laws, accountability, duties, responsibilities and representation,

Focus on entrepreneurship development , outline ways to upgrade entrepreneurial talents of WEs,

Develop mechanisms for capacity building of WEAs, Need for diversified associations and also a strong platform and network for WEAs, Develop mechanisms to implement the recommendations of the study involving various

stakeholders.

Concluding Remark The Executive Director of CAWEE, Mrs. Nigest Haile, thanked the forum participants for their invaluable contribution and participation. She said that all the opinions and recommendations are recorded. CAWEE will take all the responsibility in finalizing the proceedings of the forum and come out with a final document, which at the end of the project phase, a brief summary of the consultative forums findings is expected to be produced in a booklet form. She further stressed on the need to strengthen the future collaboration with Connect Ethiopia, Exchange Belgium and UNECA - ACGSD.

2.2 Study Findings

Topic: Women Entrepreneurs Associations in Ethiopia: Opportunities and Challenges

Mrs. Desta Solomon educated in economics and social Policy and Planning in Developing Countries in Ethiopia and UK, has over twenty four years of extensive experience in national and international organizations during which she progressively held various responsible key positions. Her experience is broad in the areas of small business and private sector development, development practitioner with expertise in gender and development, strategic leadership and in policy and advocacy work.

Mrs. Desta worked as international expert for various international organizations in the areas of gender and development, private sector development, programme formulations and policy, strategies and programme evaluations. She has strong experience in review and evaluation of policies and strategies and development of policies and designing advocacy programmes as well engendering policy and advocacy work. Currently she is working as a freelance consultant.

Executive Summary

Traditionally, women in Ethiopia are perceived as strong networkers and have a long history of associational life. In contrast the history of formal associations such as WEAs is a recent phenomenon. The first generation of WEAs was established in early 1990s. They were generally very ambitious but had very little capacity. Ten years later the second generation of WEAs came out as much stronger than their predecessors. The role of very committed and dynamic individuals who were able to inspire their members combined with the changing context and business environment characterized by the expansion of the business sector, increasing gender awareness at all levels, increased access to information and technology as well as the emergence of a new generation of WEs who have international experience and exposure contributed to the relative success.

Over the past 15 years, associations in general and WEAs in particular have evolved significantly and valuable lessons have been learnt. Some of these lessons relate to the process of establishment of the associations, the diversity of membership (interests and capacities) and linked to that is articulation of objectives, the institutionalization of systems and processes as well as proactive networking. In order to bring about significant change in women’s economic position and WEAs (as one of the instrument to achieve this) there are bigger challenges that need to be addressed not only by the WEAs but by many other actors as well including associations such as the chambers of commerce, government and donors. The challenges include low level of awareness especially among WEs, the lack of opportunities for women to acquire experiences in such areas as leadership and management as well as the general attitude towards women and sometimes the resistance to women’s economic empowerment.

There is a clear indication that a dynamic business community is emerging in Ethiopia. This is a great opportunity and if harnessed well, will go to great length in strengthening WEAs. The increasing attention being given by government for urban development is another opportunity that WEAs need to use. WEAs need to lobby strongly with other associations such as the chambers of commerce which are generally open to have more voice and influence. WEAs also need to make full use of the potential that media and internet provides.

1. Background In Ethiopia women dominate the micro enterprise sector both in rural and urban areas. According to the

CSA survey, 2003 women account for close to 70% of micro enterprises operators in Ethiopia. However, their participation in small, medium and large enterprises diminishes as we go up the ladder. Beyond participating in productive activities such as agriculture, trade and industry, women have multiple roles in society. They participate in productive activities such as agriculture; they are responsible caring for family including preparation of food, health care and education. They also play important community roles of caring for the sick, elderly. Women need to balance these different roles and therefore they are multi tasked managing their businesses along side all other roles they are expected to perform.

Ethiopian women have a long history of associational life in the social sphere based on kinship, neighborhood, hometown, etc. There are several forms of self help organizations that sometimes combine social and economic objectives. Women play prominent role in this. In contrast to this, formal associational life is a recent history in Ethiopia. The first generations of WEs associations were established in the early 1990s. The EWEA for the first time managed to flag the role that WEs play in the economy. Other associations such as Ethiopian Women Industrialists Association and Ethiopian Women Exporters Associations followed. These associations played important role in creating awareness about WEs and their contribution and contributed to

the visibility of WEs. The second generation of WEAs appeared in the post 2000 era some of which were from the 1990s but reconstituted and restructured. Having learned from the experiences of their predecessors, the second generation of associations was an improvement over the first generation of associations.

The objective of this study is to make an assessment on the situation of WEAs with the aim of identifying the challenges and opportunities they face in promoting women entrepreneurship and make recommendations. The study aims to provide an overview of the situation of WEAs and highlight some of the issues that need to be addressed. A more in depth research is required to come up with specific issues and recommendations. Key informants in WEAs leadership and staff in Addis Ababa, Amhara and SNNPR, donors as well as other similar associations were interviewed. Relevant documents on WEAs in general and on Ethiopia in particular were also reviewed. The consultant has also made use of her own experience of working with WEAs and other business membership organizations such as the Chambers of Commerce. Feedback from participants in the consultative forum where this paper was presented is incorporated.

Accordingly, the first chapter provides an overview of the women’s enterprises and some gender related issues. The second chapter provides a background on the BMOs as the broader classification within which WEAs fall. The third chapter then gives an overview of WEAs highlighting their basic features. The fourth chapter presents a critical analysis of WEAS: strengths and weaknesses as well as the opportunities and threats and provides some conclusions and recommendations as a way forward in chapter five.

2. Overview of Women’s Enterprises in Ethiopia

Women dominate the informal sector both in rural and urban areas. Although women are dominant in the informal sector of the rural areas, data and systematic assessment of their contribution is lacking. According to sample survey conducted by CSA in 1997 in 48 major towns in Ethiopia, there are 585,000 informal sector operators and 2,700 small scale manufacturing industries that employ a total of 740,000 people. Nearly 50% micro enterprises are engaged in manufacturing (that includes food processing, tailoring and the like) and some 40% in trade in services (such as hotels and restaurants). Similarly, 85% of the small scale industries surveyed by CSA are in food, manufacturing, metal, furniture and clothing. Although women dominate the urban informal sector their significance diminishes as we go up in the ladder from micro to small and medium enterprises. The survey by CSA (1997) indicated that 65% of urban micro enterprises are run by women (i.e., 380,000) while their share in small manufacturing, medium and large enterprises are 26%, 10% and 15% respectively.

There is high level of illiteracy among women operating in the informal sector. According to the same survey, 59 per cent of the WEs were illiterate, while nearly 20 per cent had an elementary formal education. The survey also reveals that 87 per cent of the WEs are married, divorced and widowed compared to 69.8 per cent of their male counterparts. The typical sectors that women participate in the informal or micro enterprise sector are focused on retail trade and services. Most are the extensions of household chorus and businesses that require only small start-up capital. A sample survey of women’s’ enterprises that was conducted in 6 major towns in 6 major regions by ILO (2003)3 showed that overwhelming majority (88%) of the women’s enterprises surveyed (123 of them) were engaged in trade, handicraft and services. Only 15% were engaged in production.

For the significant number of women in small and micro businesses the need to support their families is a critical factor in their decision to start business. The ILO survey found out that the major motivation for WEs to run their businesses is the need to be independent and self-employed (37%), to raise income and support family (25%), interest in the business and opportunities for making money (17%). Women have multiple responsibilities at home and they have to balance this with their businesses. When asked whether family members practically support in the household chores, 52% of the women interviewed by the above survey responded positively. Conversely 48% of the women have managed without support in their household chores.

Women in micro businesses tend to make decisions about their businesses while women in small businesses need to make joint decisions with their spouse. According to the survey report (ILO 2003)1

The survey findings showed that WEs are largely independent in making decisions concerning their businesses, particularly with regard to the utilization of the money generated from their businesses, 76 per cent of micro-entrepreneurs and 83 per cent of small-scale entrepreneurs make decisions with regard to the utilization of money generated from their businesses. Other WEs also make some major decisions that affect the activities of the businesses by their own, such as taking bank loans and transferring ownership (69 per cent in microenterprises and 61 per cent in small-scale enterprises). There is also a significant involvement of husbands/spouses in making joint decisions, 32 per cent in the case of small-scale enterprises,

1 ILO (2003) Ethiopian Women Entrepreneurs: Going for Growth, Geneva

and 18 per cent in microenterprises. This confirms the fact that as women start generating their own income they are more empowered to make their own decisions.2

The report suggests that the resource requirement, the decisions that could be related to machinery

and fixed assets as well as the complexity of management may require the women to seek for joint decision with their spouses. On the other hand, it could be the result of the continued pattern of subordinate position of women and their inability to access to financial resources that limits women’s decision making power. This could be especially true if the financial resources required come from the spouse. To what extent decisions are made ‘jointly’ is also an issue that needs to be looked at. Women not only have limited decision making power in their businesses regarding taking bank loans or transfer of assets, etc., the survey also picked that women have restrictions on the choices regarding the type of business they can run.

For example, one woman who now runs a printing business was in the hotel business beforehand and faced some criticism. Likewise, a WE who has a bakery business faced opposition from her husband when she wanted to start a typing school. She later divorced, and felt this was mainly because she was restricted to stay at home.3 The major problems women face at the start-up stage of their businesses are lack of premises, lack of

capital and to a limited extent skilled labor. On the other hand, for existing women enterprises the obstacles to business growth and expansion relate to lack of working capital, lack of confidence to take risk in business and lack of negotiation skills. Women adapt different strategies in order to address these problems such as borrowing money at high interest rates, leasing their homes and properties, confining to small space, etc. As the ILO (2003) research indicated these also contribute to the failure of many women’s enterprises. According to the survey, 77% of the women obtained their start-up capital from personal saving, families and friends.

Women measure the success of their businesses through not only the profitability of the business but also to what extent the business enables them to support their family. Self esteem and satisfaction that they gain from the business is also an important parameter for success. Women identify lack of strong negotiation skills as one obstacle to the development and growth of their businesses especially in the men-dominated sectors.

During the survey, some of the women pointed out that due to their upbringing or their background (coming from conservative families), their level of education and lack of exposure, they seem to have problems in situations that require aggressive negotiation or having meetings outside of normal business hours. The case study of the woman involved in the printing business is a good example. She stated that men dominate the printing business and it has been hard for her to win some contracts because it is difficult for her to approach customers on a more informal basis outside office hours, thereby hampering her efforts at building business relationships and networks.4

A careful analysis and deeper understanding of these and other particular features and challenges of WEs require a gender sensitive approach to increase the chances of success for WEs.

3. Business Membership Organizations (BMOs) 5

2ILO (2003) p 36

5 Adapted from WB (2005) Building the Capacity of Business Membership Organizations, Guiding Principles for Project

Managers

WEAs fall within the broad category of BMOs. BMOs refer to various organizations where companies or individual entrepreneurs are members. The term BMOs include business associations, chambers of commerce, federation of business associations, employers’ clubs, private sector forums, etc BMOs are self financing organizations mainly from membership fee, service fees and sometimes from government subsidies. Generally, BMOs are accountable to their members and members elect their leadership and generally operate within democratic principles. BMOs are important for all interested in promoting Private Sector Development and the development of SMEs. For many donors it is part of the effort to achieve the MDG target of halving poverty by 2015. In this context women BMOs provide opportunity for addressing poverty (as women are disproportionately represented among the poor), gender inequalities that hinder economic growth and development and to women’s economic empowerment. Types of BMOs Chambers of commerce and Sectoral Associations are kinds of BMOs with large and diverse members and interests. They are established by public or private law where government has some regulatory role.

Business associations- relatively smaller and more homogenous members and are established by private law

Objectives of BMOs

Provide demand driven services to their members,

Advocate and represent the interests of their members,

Facilitate networking. Advantages of working with BMOs

High cost effectiveness,

Greater outreach and sustainability,

Representation and voice. Factors that affect the performance of BMOs Internally BMOs in developing countries suffer from the following:

Poor organizational capacity and technical skills,

lack of proper accounting systems and governance,

lack of demand-driven orientation,

Low levels of sustainability. BMOs also face some external challenges:

Broader political, economic, and social conditions define the limits/scope of BMOs development,

The strength and structure of the private sector,

general economic policies,

the degree of decentralization.

4. Women Entrepreneurs Associations

The first generation of WEAs was established in the early and mid 1990s.These associations lasted for 10 years or so and were reconstituted and re-established again in the early 2000. Currently there are 9 regional level WEAs in Ethiopia and one WEA is under the process of establishment in Gambella Regional state.

Addis Ababa

Amhara

Tigray

SNNPR

Oromia

Harari

Benishangul

Somali Region

Dire Dawa

Most of the Regional associations have branches in major urban centers. For instance the Amhara

WEA has four branches in Dessie, Bahirdar, Debremarkos and Gondar. Similarly the Southern WEA has 16 branches in the region. Other than the above, there is the EWEA and the Net Work of Ethiopian Women Entrepreneurs (established in 2007) which is constituted by the Regional WEAs. The mandate of the network includes mobilizing resources for capacity building of WEAs, facilitation of networking, promoting products of women’s enterprises and supporting their participation in trade fairs, promote cross border trade and provide support to addressing internal issues of WEAs.

WEAs and Disability

According to WHO estimates Ethiopia has some 7 million people with disabilities. Out of these up to 50% are women. Persons with disabilities face several challenges in Ethiopia. Disability is highly mystified and is surrounded with misconceptions surrounding it. Persons with disabilities suffer from exclusion and marginalization both in private and public life. As a result they are denied the right to participate fully in economic, social and political life of society. Women with disability are among the most marginalized and excluded within this group. Despite their numbers, they remain hidden and their sufferings and concerns unknown and their rights unrecognized. The EFPD established in 1996 is an umbrella association for five national associations and one of the aims of this Federation is to support economic empowerment of women with disabilities through promotion of entrepreneurship including training and access to micro credit. The WEs with Disabilities organized under the EFPD umbrella has 450 members in Addis and a total of 810 members in Mekelle, Bahirdar and Dire Dawa.

The Process of Establishment

The first generation of WEAs appeared in the post 1992 era mainly through drive and initiation of the

WEs themselves. This was true for those established in Addis while the process of establishment of associations established outside Addis Ababa were proactively promoted by the WAD/MoTI as part of their mandate to promote the economic participation of women. Initial support such as office space and office facilities is provided by the regional trade bureaus for the associations. Other support from the MoTI included facilitation of initial meetings for establishment, development of bylaws and capacity building. The Ministry is a signatory to MoU with ILO and sits in the steering committee for capacity building initiative for WEAs. Governance and Leadership

Few WEAs conduct election on regular basis and have their finances audited and reports presented to the general assembly members. Most other WEAs do not strictly follow their bylaws and therefore have leadership that has completed their terms. They do not have their finances audited regularly. Only few of the board members are active. Most of them have long abandoned their role as board members because of lack of time, commitment, disagreements between board members or other reasons.

Generally leaders of WEAs are women who run successful businesses, are well connected, have the exposure and commitment to contribute. As successful entrepreneurs some of the leaders of WEAs are well respected and able to influence others. Membership Size and Profile

Membership ranges from 25 to over 5500. The exact number of members especially that of paying members is difficult to know as most associations do not have an updated record of active members. As the table below shows the number of active members is much lower than the membership size that associations claim to have.

Membership Profile of selected WEAs 6 (2008) TABLE 1

Adama Addis Ababa

Amhara Mekele South Total % age

Agriculture 15 - 2 14 21 52 1.4

Industry 40 96 136 21 534 827 22

Retail 72 40 399 98 1813 2422 64.4

Service 55 27 77 73 209 441 11.6

Wholesale 6 5 1 3 6 21 0.6

Total 188 168 615 209 2583 3763 100

%age 5 4.5 16 5.5 69 100

As shown in the above table 70% of the women are engaged in retail trade and service sector. The

table also shows that 22% of women are in industry sector the majority of these are in traditional food processing industry. Retail trade, food processing and service sector include wide spectrum of businesses and likewise the members’ interests, needs and expectations are also diverse. Although data is not available for most of the WEAs, the size of businesses owned by the WEAs varies significantly from micro enterprises to medium sized enterprises. For instance, the data available from EWEA (see table below) indicates even with a relatively small number of members most of whom are engaged in production and export, the size of businesses of members vary significantly with varying needs and interests.

Ethiopian Women Exporters Association Profile of members by Sales Volume 7(2007) TABLE 2

Sales Volume per annum No. of Enterprises

< 50,000 ETB 4

ETB 50000-100000 4

ETB 100,000-1,000,000 5

ETB 1,000,000-10,000,000 4

ETB > 10,000,000 4

TOTAL 21

Multiple membership to different associations such as to chambers of commerce, sectoral associations

and micro finance saving as well as traditional social membership organizations such as equb (rotational saving and credit schemes) and iddir (burial associations) is pointed out as one of the possible reasons for low membership for instance in Addis Ababa. Available information points to multiple memberships as a common phenomenon among WEs. According to the information from EWEA, 81% of EWEA’s members are members of Chambers of Commerce, 57% are members of sectoral associations and 33% are members of other WEAs.8 Organization

The organizational capacity of most of the WEAs has improved over time. All except the national network of WEAs have office premises. The Amhara WEA has constructed its own premises while others operate from rented offices. The resources both human and material vary significantly. The Amhara WEA has full time staff and manager of the association while the EWEA and the Addis Ababa WEA have one or two full

6 Summarized from ILO Small Enterprise Development Programme (2008), Membership Directory of Five WEAs in

Ethiopia 7 GTZ/Engineering Capacity Building Programme, (2007) EWEA: Strategy Workshop 8 Ibid.

time staff. Other associations such as SNNPR WEA manage using young volunteers from universities. In the absence of sufficient full time staff it is inevitable for some of the board members to involve in the day to day management of these associations. On the other hand, there is very little involvement of members in the activities of associations.

Most of the associations raise minimum funds from membership. This is constrained by the capacity of members to pay (taking into account the number of members in small and micro business sector). Even for the relatively stronger associations such EWEA, membership fee accounts for a negligible percentage of their income. Most are dependent on donor funds to cover core costs such as staff costs and office rent. The major source of income for the associations besides donor funds is income generation activities such as organization of bazaars and renting of property such as tents. Service to Members

WEAs offer limited services to their members. The type, quality and consistency of services provided to members also vary significantly. Some provide technical support, training and information to targeted members on an ad hoc basis in collaboration with donors while others provide limited services such as information, secretarial services, business facilitation services including lobbying with local authorities for premises, rent etc. Typical services include:

Secretarial and IT services,

Business Advice,

Marketing of WE products,

Market linkages,

Information and networking opportunities,

Facilitation of access to finance,

Lobbying with local governments (e.g., facilitating access to land and premises). Networking

Networking within the WEAs takes place in certain organized events. Exchange visits between members are organized and linkages between entrepreneurs encouraged. Every year the month of March is dedicated to WEs and the associations organize exhibitions and fairs to promote the businesses of their members. On the other hand, networking efforts outside the WEAs is limited although the potential for mainstreaming WEs focused services is very high in organizations such as Chambers of Commerce, employers federation, professional associations, forums and women’s rights organizations. The Role of Government

Regional Trade and Industry Bureau and the WAD/MoTI have played and continue to play important roles in the establishment and strengthening of WEAs. Their support includes supporting the mobilization and encouragement for the establishment of WEAs, technical support in developing by-laws, training and capacity building activities for the leadership of WEAs, providing office space and secretarial services until the associations are able to rent premises of their own. They facilitate linkages with donors and other government institutions. In contrast to the strong support provided (especially at the start up) by these offices, most WEAs consider the support from other government agencies inadequate. Donors

Support to WEAs falls within the broader donor objective of meeting the MDG targets through private sector development and economic, social and political empowerment of women. For some donors such as the USAID support to WEAs is part of the effort to make Ethiopian private sector benefit from the AGOA + programme. ILO, SIDA, GTZ, EU, USAID and VSO, are some of the key donors for the WEAs covered by this study. Donor support is directed toward the WEs and enterprises that they run the WEAs as well as the broader regulatory framework that influences private sector development. Donors provide technical support (such as providing technical advisors, product development , marketing, sponsoring trade fairs and business tours, linkages and other promotional activities) and trainings in areas of business plan development and participating in trade fairs, etc.

Support to WEAs includes funding of project activities including covering the cost of core staff and office rent, capacity building of leadership and staff through training and exchange visits, technical support in conducting needs assessment, provision of BDS to members as well as facilitation of linkages with other associations abroad. Financial and technical support from these donors has been critical for the survival and

functioning of some of these associations. Generally, where the associations had the capacity and commitment and where donors insist on cost sharing, the supports have been effective.

In an effort to improve the regulatory environment for private sector development, donors facilitate dialogue between different stakeholders focusing on addressing some of the key challenges that WEs face in Ethiopia. Significant progress has been achieved for instance in an effort to address access to finance for WEs. For example agreement has been reached through the support of USAID with private bank to cover 50% of collateral for loans by USAID. Donors also provide technical support in reviewing the legal and regulatory framework in relation to private sector development such as review of commercial code.

5. Analysis of WEAs: Strengths, Weaknesses, Opportunities and Threats

The following section attempts to highlight the achievements so far, the opportunities as well as some of the key internal and external issues that WEAs are currently faced with.

5.1 Key Achievements

Over the past two decades WEs associations have achieved a lot mainly as a result of some strong and

dedicated leaders since the 1990s and they have built on the successes and lessons learnt from the first generation of WEAs who have achieved despite the challenges they faced.

Some of the achievements so far are:

WEAs have successfully promoted the profiles of WEs at national and regional levels. The dedication of the month of WEs is one indicator of success in this respect,

Organizing events such as exhibitions and bazaars for members which have now become regular events in all the regions and at national level,

Facilitation of training/capacity building for members even though they are not done consistently,

Promotion of the products of WEs locally and in international markets and

WEAs are increasingly recognized as representatives of WEs and their interests.

5.2 Weaknesses

Clarity of Purpose Successful associations are often established out of common frustrations and common challenges

faced by their members. The experience from EFEA shows that challenges faced in this sector forced to bring together the members and look for solutions. The association therefore was established out of necessity and is meant to address some specific problems emerging from the common frustrations. This however is not always obvious that this is the driving force for WEAs. As mentioned in previous sections the diversity of membership in the WEAs casts doubt as to the existence of such strong common issue that brings WEs together.

There is a general consensus on the need for organizing WEs. WEAs are not able to clearly articulate why WEs need to organize separately and what would be the specific purpose of the association. As a result, WEAs lack focus and therefore little progress is achieved. Partly because of lack of clear articulation of purpose, potential partners and supporters are not necessarily convinced of their significance. As a result potential partners such as government offices, chambers of commerce and others are not always clear on what is expected of them.

Process of Establishment

The process of establishment of WEAs has not always been broad based and member driven. The

associations are initiated by few women who are conscious and recognize the need and opportunities for organizing. In some circumstances the role of external bodies such as government drive the process of establishment and cast doubt as to the representativeness of the members’ interests. The Amhara WEA was initially established with the strong support from WAD/MoTI where the board was composed of representatives from the different zones of the region. However, the association was unable to perform for a long time because of several factors including the lack of participation of members. When the association was re-established two years later the newly elected members decided to recruit members informally through their own

social networks. Over 60 members were recruited this way. The process of establishment and formalization is often completed in a short time giving little

opportunity for engaging members to generate interest and commitment. The formalization process does not take into account the financial and human resource requirements to keep the offices running. The associations start incurring costs such as renting office premises and acquiring equipment without ensuring the financial resources that will be necessary to cover these costs. A lot of time and resource is spent trying to generate resources to finance unsustainable structures.

Cultivating membership is the foundation for building sustainable organizations. In the absence of sufficient resources some leadership commit their own resources to cover initial costs of the association which sometimes may lead to undue claims over (power and resources) the associations. Some successful associations such as the EFEA took 5 years to be legally established. It was a gradual process that evolved from a simple network and information exchange and a lot of voluntary but focused work on identifying the members concerns and priorities and strategies for addressing these issues. The lesson learnt from this association is that where associations were formed with a gradual process of consultation, they are able to generate more support from members and ownership, legitimacy, commitment and financial resources. Governance and Leadership

Women generally have little opportunity to gain exposure and develop their skills in leadership. Leaders of WEAs do not receive sufficient training and exposure regarding their roles and responsibilities. Only few members of the leadership become actively engaged in the associations because of the competition for time between their leadership roles and the running their own businesses, fulfilling their roles as mothers and caretakers. This inevitably leads to dependence on few individuals. It then becomes difficult to ensure checks and balances in decision making processes.

Sometimes leaders come with the aim of promoting their own businesses seeking visibility and personally benefiting from opportunities that come through the association. In the absence of sufficient resources to run the associations independently, few association leaders end up running the day to day business of the association. Members are not aware of the challenges these associations face and therefore are not very supportive. Members do not always know what their rights and responsibilities are and they have very little knowledge of the by-laws of the associations. They are not necessarily clear on what the association’s objectives are and how it benefits them practically. Therefore they are unable to hold their leaders to account. There are also members who are free riders and are only interested in benefiting from the membership without contributing to it. This encourages mistrust between members and the leadership leading to infighting and further weakening of the WEAs.

A recent evaluation of support provided by ILO highlights and observes progress made in WEAs but also weaknesses:

‘There is also a progress towards improved leadership and overall management; service provision, network and market linkages; advocacy and increased membership. However, WEAs have to work hard to bring about the overall managerial, institutional, technical and financial capabilities. Lack of strong leadership, absence of strategic planning, weak networking with strategic partners such as chambers, lack of sustainable income to run the associations, weak managerial practices, and weak marketing linkages are to be cited as main shortcomings in running of the associations. Then again, lack of commitment of executive committee members; turnover of staff and frequent changes made within the executive committee members; lack of project ownership; absence of experience/culture to make use of database; lack of computer facilities and skills are major hindrances for no implementation of the database. 9

Organizational Capacity

WEAs do not have strong membership base and are therefore financially unsustainable. As a result they do not have organizational structure or full time staff. Most associations are not successful in building systems and processes (such as financial procedures) that enable to run the association autonomously. Decision making power is concentrated in few people in the leadership and therefore autonomous management

9 ILO Tsige Y. (2008) Women Entrepreneurs Associations: Membership Base Project Evaluation Report (unpublished

report)

of the association is not possible. The WEAs are very ambitious and try to address several issues but do not have a long term vision and strategic plans, instead they operate on a short term day to day basis.

Limited capacity also hampers the effective utilization and leveraging of donor funds. Five WEAs with the support of ILO published members’ directory in 2007. The directory contributed to improving the profile of these associations and building the self esteem of their members. However, according to a recent evaluation of this support in all cases, the WEAs were not able to maintain updated membership data base.10 The major reasons cited for this include the lack of commitment from leadership, staff turnover and lack of some basic equipment such as computers.

Service Provision

WEAs have been successful in organizing bazaars and exhibitions and some trainings and awareness raising events regularly. However they offer very limited range of services to their members and their services are not able to reach the diverse membership with different expectations and needs. In the absence of up to date information on members and their profiles associations are not able to determine priority needs of their members they can address through service provision or through linking with other service providers.

Assessment done by EWEA in 2007 clearly demonstrates the gap between members’ expectation of benefits from the association and what the association offers. According to this needs assessment, out of the 11 types of services that the association offers, 9 fell under high expectation low performance rating. For instance 80% of members joined the association expecting it will help them in finding market for their products. Only 40% said their expectation was met. 11 WEAs generally are insensitive to the needs of WEs. The impact of such approach is of course to further marginalize women with disabilities from participating in WEAs. There are no initiatives undertaken in WEAs to support these members who struggle to survive and succeed not only as women but as women with disabilities. Networking and Partnership

Defining clear purpose and objective for WEAs helps in identifying the common issues that could form

basis for forging strategic partnership with others. However networking of WEAs outside their own circle is generally limited. There are some ongoing efforts to link up with banks, MFIs, Micro and Small Enterprise Development Agencies and Trade Bureaus in an ad hoc basis and based on specific agenda. Some WEAs such as the EWEA have achieved progress in linking up with external finance sources for credit guarantee purposes. WEAs dealings with government partners suffer from dependency syndrome. The WEAs tend to present their problems and expect solutions to be provided. Attitudinal change on the part of WEAs and the leadership is very important if they are to succeed in mobilizing support and lobby for change successfully.

5.3. Opportunities

Despite the persisting attitude towards women there is an increasing awareness regarding the role women play in the economy. Several governmental and non-governmental organizations provide focused support to WEs through credit and training services. Donors also continue to play a supportive role in promoting WEs and their associations. On the other hand even though figures are difficult to come by, there is a growing number of young WEs with business skills, experiences, exposure and motivation that could potentially change the perception as well as the performance of many WEAs. This global trend opens opportunity for WEAs in Ethiopia to link up, network and work together with other WEAs and WEs in Africa and elsewhere.

5.4 Threats WEAs face a lot of challenges that continue to hamper their growth and development. Some of these

challenges relate to the socio-economic and cultural factors that limit opportunities for WEs and their associations to access resources such as finance, assets and education. This in turn reinforces the prevailing attitude towards women as weak and incapable. The private sector characterized by underdeveloped market,

10 Ibid. 11 GTZ Engineering Capacity Building Programme 2007, EWEA: Strategy Workshop (unpublished document)

lack of access to information, underdeveloped infrastructure, including financial services, insurance and others poses challenge for WEs. Most Women enterprises are at micro level and with low growth potential. The opportunities for micro enterprises to move to the next stage is highly constrained by various factors including, , lack of necessary skills, access to financial resources, access to premises, access to market etc.

Experience from some of the WEAs also highlights the resistance WEs can face from the male dominated private sector who are threatened by their success. WEs do not receive enough support institutions in their roles as mothers, care takers and providers. They have to balance these different roles and as such have to make difficult decisions not to compromise their expected social roles at the household and in the community. The limited access women have to resources and decision making power at the household level influences the decisions the WE makes regarding her business. These challenges become much worse for a WE with disability.

The diagram below attempts to present the layers of challenges that WEs face from the household to the bigger socio-economic context.

THE CHALLENGES OF WOMEN ENTREPRENEURS

Socio Economic and Cultural Factors

Gender Roles and the Position of Women

Low Level of Development of Private Sector

The Nature of Women’s Enterprises

Resistance to Women’s Economic Empowerment Multiple Roles of Women at Household/Community Power Relations/Decision Making/ at the Household

WEAs are often misunderstood as politically affiliated organizations. There is a belief that associations including WEAs are self serving organizations driven and owned by some powerful individuals. There is lack of trust between members and association leaders. Members believe that leaders benefit unduly from the association while on the other hand leaders also take advantage of their positions and promote their vested interests. Experiences from more successful WEAs such as the Amhara WEA have shown empowering their members to engage in profitable business sectors previously dominated by men may lead to resistance and

DISABILITY

adverse reaction from the business sector and the spouses of the women. The lesson learnt here was the need to engage men and spouses in supporting WEs so that WEAs can play a role in this respect.

Although WEAs are not yet actively engaged in advocacy and lobbying activities, the newly drafted association law currently is considered posing potential threat to WEAs as it limits their ability to advocate for the rights of WEs.

Summary of SWOT ANALYSIS OF WEAs TABLE 3

Strengths Weaknesses

Have better capacity than the first generation of WEAs

Voluntarism and good will to contribute to success

Leadership with exposure, good networks and influences

Better organized offices and staff

Increasingly recognized as promoters of the interests of WEs.

Weak organization and membership

Weak capacity (Human resource/finance/organization)

Weak membership

Lack of systems , plans and processes

Separation of roles between strategic leadership and day to day management

Weak services to members

Overambitious plans

Donor dependence

Lack of focus

Skewed services to few members

services are not demand driven

Governance issues

Lack of systems for transparency and accountability- governance issues resulting in elite capture, conflict of interest,

Mistrust

limited capacity to work on policy issues

Absence of strong national representation of WEs abroad

Lack of awareness and involvement in policy advocacy issues at national and African level such as EPAs, the draft CSOs law, etc.

Opportunities: Threats:

Increased awareness and appreciation of the need to promote WEAs

A growing number of young WEs with the business skills, experience and motivation that could potentially contribute to strong associations

Donor interest in private sector development

Less bureaucratic process for registration of associations

Opportunities for linking up with African wide Regional networks

General attitudes towards women

The position of women in society- education, exposure, gender ascribed roles, skills, confidence, and socio-economic and cultural factors

Under developed private sector

‘Poverty Syndrome’ and mistrust between members and leadership

Negative perception about the role of associations (weak, ineffective, self-serving)

Newly drafted association law (advocacy, rights, regulatory power, registration,)

WEAs perceived as being politically manipulated

6. The Way Forward WEAs are important and can potentially play a significant role in the promotion of women’s enterprises

in Ethiopia. In order to do so, WEAs and their members need to critically look at their performances and draw up realistic plans to address the challenges. The following are some practical recommendations on key areas raised in this paper for the way forward.

Improving Leadership and Governance

The current high level commitment from few leaders of WEAs should be complemented however this

has to be accompanied by the following measures:

Empowering members by providing awareness and training on their rights and obligations. Providing copies of the bylaws to all members could be the first step in realizing this.

Members need to be encouraged to participate and contribute in various committees and task forces based on issues they identify.

Leadership of WEAs needs to strengthen their capacity by setting up Advisory Board that is composed of supporters of their cause from women professionals (bankers, economists, accountants and other women leaders).

Leadership should respect by-laws and ensure the statutory requirements of elections, audit and reporting take place according to the by-laws.

WEAs leadership should develop succession plans and encouraging and coaching new generation of entrepreneurs to the leadership positions.

WEAs should be inclusive in their membership and services regarding WEs with disabilities. Membership

WEAs should draw up plans not only for recruitment but also sustaining membership. Some of the strategies for this could be:

Membership marketing/research – members need to understand what the objective/purpose of joining an association would be, what benefits there are and they need to know how their money is used.

Developing motivational programmes where members are given the chance to identify themselves with certain groups/purpose.

Delivering Services (i.e., develop services that could benefit all members). Networking

WEAs need to be proactive in networking especially with organizations that provide services to enterprises in order to ensure the women member’s access and benefit from their services. They have to look for strategic partnership with organizations such as chambers of commerce to gain access to platforms for bigger influence and outreach in promoting the interests of WEs. WEAs can benefit a lot from networking with women’s rights organizations, professional associations, employers associations, women’s affairs offices, WEs with disabilities, etc. and they also have a lot to offer to them. Reaching Young Generation of WEs

WEAs need to segment their members according to age, education, sector, growth potential, etc and draw up strategies on how to reach especially young WEs. WEAs need to work with education institutions such as universities and colleges, associations such as YWCA and other youth associations to create awareness and recruit members who could become potential members. Stronger Donor Coordination

The support from donors can have more impact on strengthening WEAs if there is more coordination of efforts in mainstreaming gender issues in the private sector development programmes. For instance capacity building support to WEAs can bring greater impact if support to other private sector organizations such as chambers of commerce could have a more specific gender related outcomes.

Policy Literacy and Advocacy

WEAs need to increase their capacity to engage on national and global policy issues that have direct or indirect bearing on women’s enterprises. For instance Ethiopia is currently going through negotiation processes on three fronts WTO accession, COMESA, and EPA negotiations to open up its market. None of these negotiations are adequately understood and their impacts analyzed in relation to the interests of WEs. Sustained Media Engagement

WEAs should take advantage of the existing media at national and regional levels to create awareness and advance the interests of their members in a sustained manner and in collaboration with potential partners such as chambers of commerce, donors, women’s rights organizations and professional associations.

References

GTZ/Engineering Capacity Building Programme, (2007) Ethiopian Women Exporters Association: Strategy Workshop

GTZ/MSE Solomon D. (2002) Study for the Establishment of Network of Micro and Small Enterprise Support Institutions in Tigray

ILO (2003) Ethiopian Women Entrepreneurs: Going for Growth, Geneva ILO Small Enterprise Development Programme (2008), Membership Directory of Five Women

Entrepreneurship Associations in Ethiopia Tsige Y. (2008) Women Entrepreneurs Associations: Membership Base (WEAMB) Project Evaluation

Report WB (2005) Building the Capacity of Business Membership Organizations, Guiding Principles for

Project Managers

2.3 Recommendations Leadership:

Empowering members and establishing and capacitating Advisory Boards;

Encouraging new generation of entrepreneurs to the leadership positions and develop succession plan. Young and educated leaders are needed because of the need for competency;

Audit and annual reports need to be preconditions for support by donors;

In order to ensure clarity, responsibility and accountability, the associations need to have bylaws and code of conduct.

Building Systems and Processes:

Sustained capacity building support to WEAs;

Recruitment of key staff for associations with autonomy i.e. strong professional and support staff;

Form advisory group from prominent personalities, professionals and women advocates (lawyers, bankers, economists, etc);

The membership database of associations has to be disaggregated to address the needs of the different members;

Formulate packages to address issues of disabilities through the WEAs.

Financial Sustainability:

Develop a business plan with clear indication of financial needs;

Identify short term and long term sources of finance and strategies for resource mobilization;

Lobby with government for supporting sustainable source of income;

Financial sustainability can come through membership fee and contributions. Services for Members:

Clear articulation of purpose and focus;

Survey and identify members needs and expectations;

Identify services that could best be provided by the association;

Integrate gender dimensions and tailor it to the needs of WEs and build the capacity of WEAs to analyze and give feedback policy issues;

There is a need for an umbrella association which includes micro, small and medium enterprises so that linkage can be established;

Build the capacity of WEAs to gain skill and knowledge on international agreements and create network with international and national organizations;

Develop modality to have clear system, objective for the association membership in terms of management, by-laws, accountability, duties and responsibilities and representation;

Focus on entrepreneurship development outline ways to upgrade entrepreneurial talents of WEs;

Need to have diversified associations and also a strong platform and network for WEAs.

3. Challenges in Financing Women’s Businesses

3.1. Forum Proceedings

The Third Consultative Forum on “Challenges in Financing Women’s Businesses”” was organized by the CAWEE on January 29, 2009 at the Hilton Addis, in Addis Ababa. The Consultative Forum had the participation of 260 participants (180 women and 80 men) representing stakeholders from policy makers, implementers, business associations, Chambers of Commerce, NGOs, academic institutions, consultants, researchers, WEs, donors and other concerned development partners that promote the causes of women in business.

The Consultative Forum was inaugurated by the opening speech of His Excellency Tadesse Haile, State Minister, Ministry of Trade and Industry delivered by his special advisor. The keynote address was delivered by His Excellency Donald Yamamoto, Ambassador of the United Stated of America in Ethiopia. The welcoming Speech was made by Mrs. Nigist Haile, Executive Director of CAWEE. The proceedings of the conference and the Consultative Forum received a wide coverage by the local press including TV, radio, newspapers and website.

Participants registering Participants attending the forum

Inaugural Session 29th January 2009 14:00- 15:00 hrs

Start of the consultative forum

• Ms. Jeanah Lacey — Trade Promotion Specialist, USAID Addis Ababa Office, who is the moderator of

the Consultative Forum welcomed the distinguished guests and participants. • Mrs. Nigest Haile, Executive Director of CAWEE in her welcoming speech highlighted the main activity

areas of CAWEE since its establishment in June 2004. CAWEE mainly targets the promotion of Ethiopian WEs, with a special focus to women exporters. She further indicated that the mission of CAWEE is to promote Ethiopian WEs, with a special focus to women exporters, both existing and potential or emerging exporters. She further stated that CAWEE believes that “Empowering Women Economically is Key to Development”.

Beyond the provision of export focused business development services, that is – trainings in international trade, mentoring services, provision of web-based trade information, facilitating product development, market promotion, and participation in international trade shows and facilitating business contacts, CAWEE is also involved in advocacy work with the aim of targeting on issue areas and challenges those women in business face. She further highlighted that WEs operating in manufacturing and services sub-sectors are confronted with diverse challenges that directly affect their growth and expansion. Amongst those problems and challenges, the issue of finance is a serious problem to women owned and managed businesses. Existing formal financial institutions do not have special windows to cater the needs of those categories of women in business.

Mrs. Nigest, Executive Director CAWEE

The problem becomes more complex for women involved in growth oriented, export focused businesses, where on the one hand, micro finance institutions loans are too small for them and on the other hand, the formal financial institutions are requesting them collateral which they can not afford to provide. These group of women in business are usually called the “Missing Middle”. In concluding her speech, Mrs. Nigist said that following the presentation of the research finding, discussants representing Government as well as private banks will be contributing their views on specific issue areas with a focus to the provision of financial service to women in business. Based on the research findings presented and the contributions from the discussants, this forum is expected to further discuss and propose opinions, workable recommendations and policy ideas for further actions and interventions.

His Excellency Donald Yamamoto, Ambassador US Embassy, Addis Ababa

His Excellency Donald Yamamato , Ambassador of the United Stated of America in Ethiopia in his speech indicated that now that a new President is in office and really it is dawn of new beginning and a due time not only in present relations but also in the future. H.E. further highlighted that in the past week the dynamic change that occurs really have been astonishing and dramatic and also set a tone that we are in new time new era where new changes and new ideas are important where we are entering a new paradigm of change.

H.E. said that the AmCham is launched and that it is part of this new commitment not only by United States with Ethiopia but also by the people of United States to the people of Ethiopia to create a new change, a new paradigm. In that context H.E. said that the US State Department honored Mrs. Nigist Haile and many other people for their dynamism and for the change and commitment to a new world to create a better tomorrow for our children. H.E. indicated that change can only occur when we have the dynamism, the support and the inclusion of women groups. H.E. further stated that the other area that we are looking at is what we could learn from WEs, who are the people who are going to make the changes, they are the artists of that change. From them it can be learned how to make change better, how to create better future, a better tomorrow, a better environment and in concluding his remark he said let’s work together to make those changes a reality.

H.E. Excellency Tadesse Haile, State Minister, Ministry of Trade and Industry delivered his official opening speech through his special advisor. H.E. highlighted that the Government of Ethiopia has given great importance to promote the private sector in general and has given special focus to promote women in business. With a very special focus to economic development, the Government of Ethiopia has taken various measures to incorporate the economic empowerment of women in its different strategies and working documents. In the industrial as well as export development strategy that the country has came out, specific sub-sectors, like – Textiles and Garment; Meat, Leather & Leather Products Industry, Cottage and Small Scale Manufacturing Enterprises are given priorities, where in those sub-sectors, women are involved as owners, managers and workers, contributing their level best to the development of their country. H.E. further indicated that it is one of the duties and responsibilities of the Ministry to empower women in business.

H.E. said that the Ministry of Trade & Industry appreciates the efforts done by CAWEE in promoting Ethiopian women in business. These kinds of efforts supplement the initiatives taken by the Government.

Beyond the involvement of the Government and NGOs like CAWEE, in promoting Ethiopian women in business, different concerned stakeholders and partners are also involved by providing technical as well as financial supports. Concluding his speech, H.E. expressed his sincere wish and belief that the outcome of this forum will convey out tangible results and contribute its level best in forwarding opinions, policy ideas that can bring out changes in the provision of accessible financial services to women in business.

Technical Session - Topic: Challenges in Financing Women’s Businesses

29th January 2009 15:00: -15:45 hrs

Moderator: Ms. Jeanah Lacey

Presenter: Mr. Solomon Wole Rapporteur: Mr. Yared Fekade

Objective of the Study:

Provide a gleams of the challenges women businesses face in accessing finance;

Provides useful insights into the challenges associated with accessing finance;

Propose ideas and recommendations on how best concerned partners can contribute their level best in facilitating access to finance to WEs.

Mr. Solomon Wole, presenting the study

1. The Study Coverage:

Restricted to Addis Ababa, Focused on SMEs, the situation of micro finance is touched upon for illustration purposes, Sources of finance is limited to bank borrowing, Numerical data collected from the banks do not cover loans made to Share Companies and Private

Limited Companies, but to Sole Proprietors.

2. Methodology Total of 13 entrepreneurs (SMEs operators) were interviewed:

Eight WEs: (2 were WEs with disabilities),

Two women new business starters,

Three men entrepreneurs.

Discussions with experts in the sector were conducted:

4 Banks: 2 public and 2 private,

2 MFIs,

3 Microfinance affiliated Institutions/Associations.

Numerical data on borrowing from banks and MFIs were collected and analyzed

3. Introduction Studies and research results demonstrate that financial development accelerates economic growth by removing growth constraints on firms.

Finance is important:

To start a business To effectively operate existing business as availability of finance determines the capacity of

an enterprise in:

Choosing technology

Access to essential resources

Access to market

Etc. But finance is not the only determining factor enterprises are heterogeneous as for example:

Innovativeness

Location

Issues like previous experiences of the actors, education,

Social conditions, customs, beliefs, determine the pace and structure of business organizations

As a result factors like:

Overall politico-economic & socio-cultural environment

Factor markets

Infrastructure

Entrepreneurial competencies affect the viability and growth of business

4. Overview of Women Businesses in Ethiopia

WEs constitute a significant proportion of the private sector according to CSA figures:

73.74 % of Micro Enterprise Operators, (CSA, 2003)

13.7% of Small Scale Manufacturing Industries, (CSA,2006)

30% of Medium & Large Industrial Activities, (CSA, 2006)

WEs are part of the overall private sector:

The private sector is not robust,

Low capacity to graduate to a higher scale of enterprise operations

Even then women’s businesses stay small & informal - often characterized by subsistence activities. WEs face dual challenges:-

The overall structural problems common to all MSMEs,

Gender specific challenges arising from socio-cultural factors A survey done by ILO indicates that major constraints facing WEs are:-

Lack of Working Capital 30.5%

Lack of Management Skills 15.6%

Problem of Working Premises 15.6%

“Women often start a business with their own money or money borrowed from family and friends with limited access to other forms of credit. Therefore, the tendency is for them to start tiny and remain at that level.” (ILO, Support to Growth-oriented Enterprises in Ethiopia, 2005)

5. Major Challenges in Accessing Finance- The 3 Sets of Challenges

The first set of challenges facing the SME sector

Structural problems arising from the low level of economic development of the country restrict availability of infrastructural facilities that are essential ingredients for business growth and expansion.

Constraints to access vital facilities, such as communication facilities, working premises, raw materials and inputs, choice of appropriate technology, etc. impede the ability of a large number of entrepreneurs to develop their capital bases which in turn imply that they can rarely meet the conditions set by the financial institutions.

10 out of the 13 respondents (77%) had low capability to meet conditions of the banks; particularly loan guarantee or collateral has been the main barrier to borrow from banks.3 women (23%) responded that they were able to provide collateral.

The second set of challenges is associated with the underdevelopment of the financial industry.

Coverage of banks is restricted to major urban centres, The coverage is restricted to few segments of the urban society.

For example, Ethiopia is said to be one of the few under banked countries in Africa as bank per capita is about 6 million per bank. What is more, “financial access measured on the basis of population to bank branch ratio is about 159,000”, (Habtamu Dimtsu and Abraham Tesfaye, 2008).

The low development of financial institutions have 2 implications One implication is that due to their limited reach to the society the ability of the sector to mobilize financial resources is not that robust. Only 19% of the Ethiopian adult population has accounts in financial institutions, (Getahun Nana, 2008). The other implication is associated with the risk aversion attitude of financial institutions, which reduces the responsiveness of banks to loan requests from smaller enterprises.

“CBs, including the CBE, are believed to target mainly big and medium urban borrowers with relatively bigger investment activities and hence are not considerate when it comes to small borrowers, due to risk aversion attitude.”, (Habtamu & Abraham).

Banks do not lend to certain sectors, like for example non irrigated farming activities.

One prominent business woman, interviewed for this study, said that she could not access short term loan for working capital, although she had long standing business relationship with many of the institutions.

The third set of challenges associated with structural problems would be negative internal factors within the enterprises themselves, such as low management capacity, weak marketing skill and low technological absorptive capacities

As a result many MSMEs may need interventions through training and advisory services to benefit from any favourable financial condition.

6. Gender Related Challenges Normally financial institutions use two lending mechanisms or a combination of both, transaction

and relationship lending is often used depending on the type and size of borrowing

Transactions Lending refers to lending based on hard quantitative data that can be observed and verified at about the time of the credit origination. Such information may include, financial ratios calculated from certified audited financial statements; credit scores assembled from data on payment histories; and assets that can be pledged as collateral

Relationship Lending refers to lending based significantly on soft qualitative information gathered through contact over time with the owner/manager of the business. Such information include the character and reliability of the borrower based on direct contact over time by the

bank; or track record in repayment of past loans; or social and community standing of the borrower. The common terminology used in our banks is “clean loan” or “partially clean loan”

The first problem is associated with high informal entry barrier to the services of financial institutions

Socialization

Socialization is one of the mechanisms employed to facilitate business transactions in Ethiopia, which is said to be more so in the financial sector. In a male dominated society like ours, women find it difficult to easily socialize. As a way out, women would tend to depend on male kin to facilitate issuance of loan through socialization.

Entry Barriers for New Business Starters

- The first was said to be the fact that new business starters, especially women, lack information and the experiences as to how to approach banks

- The second is that banks trust entrepreneurs with whom they have long business relationships much more than the soundness of the business ideas.

The second gender related challenge identified is associated with the nature of the businesses most

women are engaged in, which often makes them shy from seeking bank finance In most cases women businesses are not only found in the informal micro enterprise sector, but the types of business activities they are engaged in are also relatively less capital intensive. For example, according to a CSA survey of 2003 more than 65% of all females in cottage/handicraft manufacturing industries were engaged in the processing of food products and beverages.

This should not however imply that women are weak to accumulate capital. Women are proved to be more entrepreneurial when they are exposed to opportunities and have access to resources. In fact their capacity for capital accumulation is affected by their tendency, as mothers and wives, to spend what ever income they earn on the welfare of their families and to avert risks so as to make provisions for the future.

The third gender related problem identified is associated with socio cultural problems.

Business women are encumbered with high household demand, which, together with the business demand, impacts their ability to solely focus on their businesses and by implication their ability to seek loan finance.

Culturally women shy from pushing their causes too far, which again impacts their negotiation capability.

Women are careful to take loan, as well as to timely pay loans. They take what they require and pay promptly when compared to their male counterparts.

The fourth gender related problem, which is also partly associated with socio cultural factors, is the fact

that women have little access to education.

Low level education of women perpetuates their limited capacity for growing their business beyond the informal micro enterprise sector. As a result the businesses of most WEs are constrained by week managerial and marketing skills, finance and technology absorptive capabilities.

7. Challenges Facing Women Entrepreneurs with Disabilities

Financial institutions are not ready to practically address the needs of WEs with disabilities. The following issues can be sighted as good explanatory factors:

Most banks are not accessible to persons with physical disabilities using wheel chairs. Those entrepreneurs with hearing impairment can not effectively communicate with banks as

banks do not have interpreters among their staff. While such clients can come with personal interpreters, it can not substitute the implicit trust that could have otherwise been the case if the

communication is done with the assistance of staff interpreters. Those entrepreneurs, whose visual sights are impaired, have to sign in front of a witness whose

sight is not impaired. The system forces them to bring a witness every time they go to banks for business

transactions. Bank brochures are not user friendly for those that have visual impairments, thus even the

educated ones have to rely upon other people if they need information.

8. Key Recommendations and the Way Forward

Financial institutions may need to be encouraged to initiate affirmative actions targeting WEs like establishment of women’s desk.

o Establishment of women’s desk is important to:

Reduce the current entry barriers; Support women through providing information and advise on how to proceed

with loan requests and Serve as business mentors for women clients.

Financial institutions need to design and provide more innovative financial products that would enhance

the gender inclusiveness of their services.

o Such measures could be: Setting up of revolving funds to provide soft loans; Easing collateral requirements, i.e. introducing leasing facilities; and Government interventions, through establishment of capital market and

introduction of fiscal or monetary incentives, would also encourage banks to address the specific needs of women entrepreneurs and other disadvantaged groups of society.

Policy measures need to encourage financial institutions to change their current mentality and start

addressing the practical needs of people with disabilities, who could be good potential customers Donors can also help in setting up loan guarantee funds with partner banks to ease the collateral

problems WEs face in accessing loan finance.

In this regards the current pioneering initiative of USAID, in the provision of loan guarantee fund through Bank of Abyssinia, would provide good example for replication.

Establishment of women’s bank may be the other measure that would solve the challenges facing WEs in accessing loan finance.

Nevertheless, it would be prudent to emphasise the need for a priory identifying practical issues like how it would differently address the needs of women, its clienteles, geographical coverage, etc.

Promotion of business linkages between women and big companies, provision of training and advisory services like business mentoring so as to develop the managerial and marketing skills of WEs would be other non finance related measures that would contribute to solving internal impediments of enterprises.

Finally it is also important to mention that loan finance is not the only source of capital accumulation.

Discussants interventions

Mrs. Melika Bedri, Vice President, Information Systems, Commercial Bank of Ethiopia

Mrs. Melika highlighted that as an outcome of the recent change program that the CBE is implementing, women economic empowerment came into consideration. As an outcome of that study the main credit department is restructured to include credit relationship in recent weeks and dedicated professionals are assigned that cater the needs of both women and men credit advisory services. The credit advisory service is delivered by professional and high caliber staff, their fulltime job is actually to advice customers and give support in the areas of management skills, record keeping and financial matters within that a desk is assigned for WEs. What makes it different is that WEs get business development support to the extent of giving them free training.

Mrs. Melika said that actually this is just the beginning and that the bank is building strong contact with CAWEE. With regard to WEs with disabilities the bank is quite aware of the problem and know that both women or men entrepreneurs with disabilities require special treatment and separate entrance for that matter there are about 10 branches which have these facilities and the bank also assigned lobby heads and customer service managers with in the new structure to support customers in their way and they also assist customers with disabilities. As to the special financial products for WEs, it can be worked out and the bank can take it as an assignment and will work on that.

Mrs. Mesenbet Shenkute Vice President, Credit Process, Development Bank of Ethiopia

Mrs. Mesenbet Shenkute started her intervention by raising a question on how we can empower WEs in the challenges that they face in the international market. The research finding indicated that women most of the times are in small and medium business enterprises, how are they going to grow to have an economic empowerment? Are they going to stay as small and medium businesses? If they want to grow they have to be able to become competitive in the domestic market as well as in the challenging situation of the international market. Who is going to support them? Unless and other wise they are given support in these areas, one can not address the economic empowerment of women. There are challenges that have to be manipulated and overcome including financial challenges.

She further emphasized that women who are involved in SMEs should be able to grow and to go to banks. The DBE is providing financial services to the whole nation of Ethiopians and the bank doesn’t really differentiate between women and men. In the recent reengineering process the credit process, could have given women different opportunities than men and it should be part of these processes.

Mr. Addis Alemayehu Chief of Party, USAID Grantee VEGA Ethiopia AGOA+

Mr. Addis Alemayehu explained about the new USAID/DCA loan guarantee program for WEs; which was just announced 8 weeks ago. He indicated that the background of USAID study revealed that one of the key challenges facing WEs was collateral. USAID special loan guarantee program entered into agreement with two banks one being Abyssinia Bank and the second being Nib Bank. The focus is for two groups, the one for WEs and the second one is for incoming Diaspora group, for both women and men. Because both of them are facing many challenges in securing collateral to get loans. In regards to the challenges on the project, he indicated that in the last 2 month, the first challenge is serious lack of information on opportunities that are available in different sectors here in Ethiopia. Mr. Addis suggested that institutions, like CAWEE and other women groups can play a major role in informing their member beneficiaries as what kind of business opportunity, and what challenges are here on the ground.

As concluding points, he emphasized that it should not be WEs pushing the bank to get money it should be the banks that need to consider WEs as a reliable client. Because studies time and time again showed that women are reliable borrowers and reliable pay back clients. He appreciated that the banks realized that it is beneficial to have more women loan managers and front desk officers who can serve WEs. He further advised WEs to learn from each other and share their experiences to overcome the challenges they are facing in international markets.

Floor Interventions:

Mrs. Abebech Wolde, Executive Director, EWMA, thanked CAWEE for organizing this forum and congratulated Mrs. Nigest on her award. She asked to know if the study evaluated the track records of women in repaying their loans because banks have been suffering from bad loans, loans that are not paid back. She further requested clarification why banks are not addressing micro and small enterprises demands while they have significant share in the economy.

Mrs. Tadelech Debele, Advisor, Ministry of Women’s Affairs asked about the problems women are

facing when they want to access financial support mainly those who are engaged in micro and small businesses. She further indicated that access to finance from MFIs is sometimes challenging because of the high interest rate problems. She further requested the CBE to provide business development services, and support to WEs because such initiatives are very encouraging to women because it is not only finance they need, they also need training, counseling. These kinds of services are needed, because of the shortage and lack of business development services many women are out of business.

Mrs. Hirut Gugssa, Entrepreneur said that she attended the forum for the second time. Based on the

research finding, she asked why the share of WEs borrowing form the CBE which is a public bank is relatively lower than the private banks which are established in the last 7-10 years. Secondly she asked what will be the role of CAWEE in facilitating this task. She further requested why Commercial Banks are not taking into consideration the repayment and transaction track records of the WEs as a guarantee?

Feedback from the Researcher and Discussants:

In his response Mr. Solomon mentioned that the focus of the research was mainly on access to finance and the contribution of WEs to the economy is assessed from a general perspective. He further said that Ethiopian development basically, depends equally on women and men. The problem is that it is difficult to put in figures the GDP contribution of WEs, their export contributions and other indicators because of lack of organized information and data. Mr. Solomon further indicated that in fact the issue of WEs requires a little bit depth research to come up with the actual situation of women in business as

a whole. But nonetheless, as to the banks to consider the issue of women’s economic empowerment, one needs to understand that banks are there to make profit as their prime objective, including MFIs, they are not philanthropist organizations, they get profit from the interests they charge and they also want collateral, to cover their risks if somebody is not paying back the money, because the fixed assets will assist in paying back the loan.

The issue is that there is a sort of mutual or symbiotic relationship between the client and the banks and the business community and the banks and for the banks can not sustain with out the business community and the business community may not sustain out side the bank community. One thing which can be considered is the core points of social responsibility of banking system which he said is relatively low to his opinion and said he stands to be corrected if this fact is reversed recently.

He further emphasized that there is a need to focus and address the financial needs of SMEs owned by WEs. The financing of micro enterprises is addressed by the growing number of MFIs whether the interest is said to be high; on the other hand small enterprises are considered as the missing middle because very few financial institutions address the needs of SMEs with accurate and convenient financial products.

Mr. Solomon further said that, there should be separate entity that can address SMEs financial needs particularly if we want to industrialize Ethiopia in long term. Enterprises in this category either can not fulfill the conditions of Commercial Banks and they can not be addressed by the financial products of microfinance institutions. As for the interest rate, it needs to be looked from the MFI operation perspective; the focus of the current research study was on small enterprise.

Mrs. Melika in her response to the questions raised said when it comes to the proportion of WEs borrowers although we can not say that the CBE is reaching and fulfilling the whole needs of its customers, CBE has about 2 million customers out of whom 47% are women borrowers. This is a good proportion when compared to the figures we have in last years and in addition CBE is recently expanding its branches to reach remote areas. When the figures are compared it should be looked at the proportion and share of the amount of loan disbursed to WEs.

Mrs. Mesenbete in her response indicated that the DBE doesn't actually have specific line for WEs but recently the bank started implementing customers’ friendly services through its business process reengineering. As a result of the improvement in service delivery only about 32 days are required to complete to process loans if the requirements and procedures are fulfilled. She further explained that the bank has launched a website where by any one can access it and see what the requirements are. Unfortunately, currently the bank does not have different product lines for WEs specifically but in any case the bank gives equal opportunity to every body. The DBE is well known in giving technical advice and support to its customers and this can be an area where WEs can benefit.

Floor Interventions:

Mr. Birhanu Ejigu, Private Consultant said that he wants to make remarks on instruments of financing to women owned businesses. He further said that the first remark is on credit schemes which are now started by private banks that is credit lease. A credit lease system is used all over the world many including the United States and other countries have used it to finance any business on a lease base, for instance the Ethiopian Airlines purchased planes through lease system instead of directly purchasing it, in the same way business credit lease system can be implemented for business development for WEs.

Mr. Birhanu indicated that a study is conducted by the Ministry of Trade and Industry with the participation of all Commercial Banks and all of them have agreed to initiate this program but is still pending so he urged the concerned people to start this credit lease system. With the credit lease system, there is mechanism called hire and purchase, for instance one WE may purchase one asset and can use it for 5-10 years then after wards if she wants it she can own it or she can return it back to the suppliers. This kind of hire and purchase lease system is also implemented in emerging countries like India, and can be implemented in Ethiopia.

The other remark made by Mr. Birhanu is the government is a major purchasing power in the country; the major purchaser of items is the government and can allocate or set aside certain amounts of items to small businesses particularly to women owned enterprises so that women can participate in this purchasing program.

The third remark he made is the creation of Women’s Development Fund which can be used to build the capacity of WEs through various supports like technical and business training and advice so that WEs become competitive in the domestic and international markets.

Mrs. Tsigie Haile Director, WISE, NGO said her organization works in the provision of financial and non

financial services to poor unemployed women and appreciated the study and said that she has some point to raise and further said that most of the challenges faced by WEs are gender related and the problem of participation of women in business rather than specifically to finance. She further asked to know on the size of SMEs owned by WEs and the size of the sample and methodology and the hypothesis formulated to conduct the research.

She further indicated the interesting challenges of socialization issue that is directly related to the problem of accessing finance by women. Mrs. Tsigie asked if there are more women executives in the banks and if more women come to the executive positions whether the problem of socialization could be reduced or could be addressed and as the recommendation in the study indicated would gender sensitive executives in the banks help to address the problem of access to finance by SMEs owners?

Ms. Almaz Wondemu, private consultant commented that there is no necessity to establish women’s

bank. She strengthened her argument by indicating such initiatives have to be seen from the general development perspective and efforts. She further said as an example to address girls’ education there is no need to build only girls schools but universal access has to be the main issue, the various mechanisms which enable girls to attend schools. The main question to ask and find out is why in the case of financial access women and men are not benefiting equally. She further indicated that instead of investing on women's bank which is another investment, it is better to identify the root cause of the access to finance by WEs and solve it using the existing banking system.

Mrs. Mulu Haile from an NGO which supports poor women in urban areas. She said that in addition to

empowering the women socially, economically, culturally, her organization is providing seed capital and organize saving and credit programs to enable them start their businesses but the missing thing is the innovative business idea generation and realization by the women besides the issue of finance. She said that there is need to upgrade the entrepreneurial capacity of WEs so that they become innovative.

Mrs. Yewubdar Hailu, from the IIRR congratulated CAWEE for organizing series of forums on pertinent

issues which address the economic empowerment of women. She further said that she conducted small study on similar issue in 1998 for the WB. The study focused on socio-economic and legal constraints of informal women vendors based on participatory methodology. The study findings are mainly related to this especially in the case of start-ups and why they don't go to the banks and expand their business, why they don’t grow from small to medium then large? Why do they really bother in moving around to fulfill their business daily? The major constraints are, they don't have the necessary information and also when they go to the bank they don't fulfill the collateral requirements. She said that she is happy to see the higher level officials of the Commercial Banks in this initiative. She emphasized on the placement of women loan officers and gender sensitization of male loan officers to really address the problem of socialization and gender based constraints in negotiating business with the banks.

Feedback from the Researcher and Discussants:

Mr. Solomon responding to the issues raised said that credit lease system is important and there are some initiatives by Addis MFI in relation to the housing development program by the government. It should also be indicated that it practically requires some caution if the asset is movable. For Addis MFI, they are buying mixers and other machines and putting them in condominium construction sites, the small enterprises are not allowed to move these things until they pay back the loan. So the housing agency or supervisor for the construction management act as guarantor that the items are not taken away so the issue of how to practically monitor it is important.

The issue of preferential procurement to women businesses has to be considered without compromising quality and productivity of the small enterprises. Currently procurement is mainly focused on imported goods therefore there is need to favor small business owned by women and at the same time build their capacity. The example of the condominiums construction sites can be replicated further with some adjustments.

Mr. Solomon said that he thinks when we talk about women bank we are also talking about Commercial Bank. If we are talking about commercial bank, the interest rate will be there, the collateral requirement will be there. Putting funds in the exiting banks could serve the same purpose instead of creating another bank institution. The only thing maybe, women may be comfortable to go to their own banks. Other than that, it will not solve the basic problems of collateral may be if it is some sort of charity it can be supported but if it is a business entity we need to ask the question how differently

would it address the needs of women? How different would it be from the existing Commercial Banks? Putting aside women's fund within the existing banking system is viable and there are also practical examples from other parts of Africa. The existing banks can create innovative products which can address the needs of WEs and other groups.

The other issue was the issue of hypothesis; the research is not based on any hypothesis other than the challenges of women's businesses in accessing finance in particular small scale enterprises. Mr. Solomon indicated that academic type of research may be initiated by CAWEE. But the current study can serve the purpose and objective of the consultative forum. He further said that in terms of innovative non financial services, CAWEE has initiated some services accessing export markets and this has to be further strengthened.

Mrs. Mesenbet in her response emphasized that for women to come up to executive positions in the financial and other sectors will reduce the problem of socialization but there are also men who are working together so we have to be able to convince men who are participating in the business that they have to believe that women want to be taken seriously as a business owners and as a result the negative effect of socialization will greatly be reduced.

Mr. Addis Alemayehu highlighted that some business development initiatives are implemented together with CAWEE and this has to be strengthened further. The type of business development services required has to be clearly identified and accepted by WEs. WEs need to be a little bit organized and can have more focus. He further said that individually there are WEs who are pursuing their business goals very aggressively and in a focused manner; they know exactly what they are doing and this should be developed collectively. Various issues including the women development fund and access to various financial products and schemes and other supports have to be addressed in a coordinated and organized manner.

Concluding Remark The Executive Director of CAWEE, Mrs. Nigest Haile thanked the consultant who presented the findings, the discussants and the forum participants for their invaluable contribution and participation. She said that all the opinions and recommendations are recorded. CAWEE will take all the responsibility in finalizing the proceedings of the forum and come out with a final document, which at the end of the project phase, a brief summary of the consultative forums findings, is expected to be produced in a booklet form. She further stressed that the recommendations by the researcher and the contributions of the discussants as well as the forum participants will be further looked into so that practical interventions will be taken by the concerned stakeholders.

3.2 Study Findings

Topic: Challenges in Financing Women’s Businesses

Mr. Solomon Wole Desta, educated in economics in Ethiopia and UK, has over thirty years of extensive experience during which he progressively held various responsible key positions in governmental institutions and non-governmental organizations. His experience is broad in the areas of private sector development, poverty eradication, women’s economic empowerment, export development, Industrial development, privatization, project planning and Management.

Mr. Desta works as a freelance international expert for various international organizations, in the areas of private sector policy analysis, entrepreneurship development, export development, corporate governance, women’s economic empowerment and company diagnostic studies. He played important role in the installation of Enterprise Uganda Foundation and strengthening of private sector development centers in Mozambique, Nigeria, Jordan and Guyana. He has designed a number training modules including Corporate Entrepreneurship and Training of Master entrepreneurship trainers’ courses for UNCTAD. Currently he is working as a Senior Technical Advisor on Economic Strengthening for Save the Children – USA country office in Ethiopia.

Executive Summary

As a reflection of the low level of the overall socio economic development of the country, and due to historical circumstances, the Ethiopian private sector is basically characterized by informal micro business operations on the one hand and, on the other, by low capacity to graduate to a higher scale of business operations; i.e., micro to small, or small to medium and large scale activities. Women owned businesses are largely restricted to micro level of operations even when viewed in the light of the overall facets of the private sector of the country.

While access to finance is a challenge common to all MSEs, the challenge for women business owners is compounded by the multifaceted gender related problems that inhibit their ability to access finance, which, even within the MSE sector, is one of the major factors accountable for hindering the emergence and growth of their businesses. According to the finding of this study, in comparison to men entrepreneurs, the number of WEs who managed to secure loan fiancé was not only small but the loan amount they borrowed from financial institutions account for insignificant proportion to the total lending made to individual entrepreneurs. The number of women sole proprietorship borrowers to total borrowers is 47% in the case of CBE, 22% in the case of Abyssinia Bank and 18% in the case Dashen Bank. Similar trends were also observed in microfinance lending as the number of women borrowers at the national level is no more than 34% on the average. With regards to loan disbursements the share of women borrowers is rather marginal as they account for 13%, 14.1% and 7.1% of the total proprietorship loan disbursed by the CBE, Dashen Bank and Abyssinia Bank respectively. The situation is similar in the case of microfinance lending as women accounted for an average of no more than 35% of total disbursements at the national level.

WEs face dual challenges in accessing financial resources. To start with the challenges facing the private sector, such as those related to low level of infrastructural facilities, public sector services, access to finance, etc, are also the challenges faced by WEs. While these structural problems pose challenges that are common to the private sector as a whole, WEs face additional impediments associated with socio-cultural barriers and gender biased practices to access financial resources. The situation of WEs with disabilities is even worse as they are affected by practical challenges to access financial services.

Some of the important measures for easing the challenges WEs face in accessing financial resources would include inducing financial institutions to adopt affirmative actions like setting up women’s desks, designing and provision of innovative financial products that would address the special needs and challenges of women borrowers. Donors are expected to take similar measures like the one recently introduced by USAID to address the collateral problems of WEs. Non financial interventions like promotion of business linkages between WEs and larger firms and provision of training and advisory services would greatly augment the managerial and marketing skills and enhance the financial and technological absorptive capacities of WEs.

1. Introduction Ethiopian women constitute almost half of the total population and a significant proportion of the

labor force. According to the 2007 Population and Housing Census the number of women is 36.6 million or about 49.5% of the total population and for about 48% of the economically active population - those aged 15 – 59 years. Creation of an enabling environment for the social and economic empowerment of women would therefore be an essential component of the overall development process of the country. Information on the number, location, areas of operations, problems, etc. of the private sector in general and WEs in particular is not available or scanty at best. The survey reports of the CSA, the only credible source of information, are not only current but the dates of issues vary for different business activities as well. The latest survey reports on informal micro enterprises and cottage/handicraft activities, for example, are for 2003 while the reference year for the reports on small scale manufacturing activities and medium and large industries is 2006 respectively. Be it as it may, the reports of CSA indicate that women owned and operated businesses consist of mostly informal micro and cottage/handicraft operations. Women accounted for 73.74% of the total micro enterprise operators, (CSA, 2003). On the other hand the share of women enterprise owners within the small scale manufacturing establishments and the medium and large scale industrial activities is no more than 13.7% and 30% respectively, (CSA, 2006).

It is true that, partly due to historical circumstances and as a reflection of the low level of the overall socio economic development of the country, the private sector is not robust. In fact, the Ethiopian private sector is basically characterized by informal micro level business operations on the one hand and, on the other, by low capacity to graduate to a higher scale of business operations; i.e., micro to small, or small to medium and large scale activities. Even when viewed in the light of the overall facets of the private sector of the country, women owned businesses are more or less restricted to micro level operations. The fact that women, while accounting for the bulk of micro and cottage/handicraft businesses on the one hand and a mere 13.7% of small scale manufacturing establishments - the next higher scale of operation; on the other hand, signifies the fact that the large majority of women businesses stay small and informal, often characterized by subsistence activities.

A number of factors can be sighted as impediments to the growth and expansion of Ethiopian WEs. In general terms, WEs face dual challenges; firstly, the structural problems women face are common to all MSE operators, and secondly in addition to the common problems, WEs face problems that can be characterized as women specific problems, mostly associated with socio- cultural factors and gender biased practices. As a result the problems Ethiopian WEs face is many and diverse in comparison with their male counterpart business operators.

The purpose of this study is not to address all the challenges facing Ethiopian WEs. Its purpose is rather to provide gleams of the challenges associated with meeting the financial needs of WEs. Finance is one of the few, and probably the most, important element for business start-up and business operation. Even a good business idea can not be started without finance. Likewise a good business can not be operational with out working capital. While access to finance is a challenge common to all MSEs, the challenge for women business owners is compounded by the multifaceted gender related problems that inhibit their ability to access finance, which, even within the MSE sector, is one of the major factors accountable for hampering the emergence and growth of their businesses.

The scope and coverage of the study is limited as its assessment is restricted to Addis Ababa and as it reached a limited number of WEs. Also, the focus was largely on the challenges facing SME operators, commonly referred to as the “missing middle”. The rational is that MFIs cater to the needs of micro enterprises while larger firms can easily access bank finance than small scale enterprises. Even then efforts were made to, in as much as possible, expand the coverage of the assessment through interviewing women business operators, financial institutions and other relevant stakeholders. Accordingly a total of 10 WEs were interviewed, of which eight were existing business operators, two of them were WEs with disabilities, while the remaining two women interviewed were new business start-ups.

Numerical data on the number of women borrowers and size of loan disbursement made to them was collected from four banks, two public and two private banks and one MFI. Extensive discussions were held with senior experts of the financial institutions, officials of two MFIs and other stakeholders like the EWDNA, ECDD and AEMFI. In addition three men small scale enterprise owners were interviewed so as to gain insight into the common challenges MSE operators face in accessing financial resources. It is against this brief background that the study provides gleams of the status and challenges associated with financing women businesses followed by outlines of important issues for considerations to address the challenges of accessing financial resources by way of a conclusion. It is believed that the study would provide a useful insight into the challenges associated with accessing finance and some important issues that may be necessary to ease the problems.

2. Accessibility of Finance to Women Businesses

In general terms the need for capital is either to start new businesses, or to effectively operate existing enterprises. Availability of finance determines the capacity of an enterprise in a number of ways, especially in choice of technology, access to markets, access to essential resources, etc, which in turn greatly influences the viability and success of a business. Securing capital for business start-up or business operation is one of the major obstacles every entrepreneur, particularly those in the MSEs sector, face. But even by the standard of MSE operators WEs face additional constraints to secure financial resources.

A number of studies made in this are showing that business women face more challenges in accessing finance from financial institutions. A study carried out by the International Labour Organization (ILO), for example, put access to finance as the major obstacle facing business women. “Women often start a business with their own money or money borrowed from family and friends with limited access to other forms of credit”, (ILO, 2005).The assessments made by this study also came up with similar findings. The study sought qualitative data on the number and the magnitude of loan disbursements made to women borrowers from four banks, two private and two public and one MFI.

It would, however, be important to indicate that gender disaggregated data on number of borrowers and loan size is not easily available at the banks, for two reasons. First, the practice of keeping disaggregated data is not the tradition. The second, and probably the most important one, is practical problem associated with corporate entities as these entities, such as share companies and private limited companies, in addition to mixed ownership, have legal personality to borrow on their own right, which makes data disaggregating difficult. To overcome the difficulty, the banks were asked to provide data on loans made to sole proprietor businesses. Even then one of the banks, i.e. DBE, could not provide such information as it deals with corporate clients; it however provided good information on micro finance activities through its RuFIP. The compilation of disaggregated data by the other three banks was based on names of borrowers which might be subject to few errors associated with names that are common to men and women.

In spite of the problems, the data provides valuable clue on the accessibility of finance to WEs. The share of women borrowers and the magnitude of the loans in the total sole proprietorship loan as at 30th June 2008 in the three banks is summarized in the following table.

Share of Women Borrowers (as % of total proprietorship loan)

The information in the table, despite the smallness of the sample size, provides two important generalizations on the gender inclusiveness of the financial sector. First, few WEs manage to access the services of financial institutions. The number of women borrowers relative to men is very low in all cases. With the exception of the Commercial bank, - where women account for 47% of total borrowers, the number of women borrowers from the other two banks is no more than 20% on the average. Subsequent discussions with relevant people revealed that the main reasons for the low number of women borrowers are firstly; long standing socio-cultural barriers, which have inhibited the growth and development of women entrepreneurship. Since it is only recently that women business owners have started to emerge, most WEs of today could be considered as first generation entrepreneurs, implying that most of the women are newly emerging business owners and managers. Under such a situation for most of them the sources of capital/finance would be own savings or inheritance, or informal borrowing, etc., which means little reliance on external finance. Secondly, doubts about their ability to meet the conditions set by the financial institutions, like the high collateral requirements, the need to provide business plans, limited or low networking, etc discourage women to approach banks for loan. The third reason is simply lack of information on the workings of financial institutions.

The other major observation to be made from the table is related to the fact that women account for a very small proportion of the loan amount disbursed relative to men borrowers. Women account for a mere 13% of the loan amount disbursed by the CBE, 14.1% by Dashen Bank and 7.15 by Abyssinia Bank. It

Number of Borrowers Loan Portfolio

Commercial Bank of Ethiopia 47 13

Abyssinia Bank 22 7.1

Dashen Bank 18 14.1

would be interesting to note that while women accounted for 47% of the total number of clients, they accounted to only 13% of the total amount of loans disbursed by the commercial bank. The situation is similar in the case of the two private banks as well. Similar trend is observed in the case of MFIs. While the coverage of microfinance institutions in terms of number of clients is encouraging, when it comes to magnitude of loans the situation appears to be similar with that of the banks. According to the information from the ADCSI, as at 10th October 2008, the number of women borrowers account for 58% of the total clients. On the other hand the share of women borrowers in the total loan portfolio is about 43.7%.

Even at the national level the coverage of MFIs show similar trends. According to information from the AEMFI, at the end of 2007, twenty six microfinance institutions between them had a total of 1,780,363 active clients, out of which women clients were 603,363, (or 34% of the total). Similarly information at the DBE indicates that the gender coverage rate of the 14 microfinance institutions participating in its RUFIP show the same trends. In 2006, women borrowers accounted for 34.8% of the total loan disbursement made by the 14 participating MFIs and 34.4% of their total borrowers. Meklet Microfinance Institution, one of the institutions contacted for the purpose of this study, claimed that it has reached more women than men in both cases, although it could not provide quantitative data.

While the need for detailed and objective research can not be over emphasized, the above information allows one to make bold generalization that the few Ethiopian WEs who managed to access the services of financial institutions borrow smaller amount of money relative to their male counterparts. The study identified two explanatory factors for such state of affairs. First when compared to men, women are generally considered rational borrowers as most tend to borrow what their businesses require while men tend to exaggerate their requirements, which is sighted as one of the probable reasons for the relative weak repayment performances of men borrowers.

The second explanatory factor for the small magnitude of borrowing made to WEs would be the areas of activities women businesses tend to concentrate. In general terms women businesses are concentrated in activities that are relatively less capital intensive like food processing, textile, etc. For example, the 2006 CSA survey report on small scale manufacturing activities indicates that the share of women ownership in food processing and textiles was 47.1% and 42,82% respectively, while their share in the relatively capital intensive business activities like metal works and furniture making was no more than 7.06% and 4.905 in that order. What ever the reasons could be, the information outlined in this section demonstrates that WE’s access to finance is highly constrained even when compared to the constraints facing the SME sector of the country. To this effect the most important challenges identified by the study are discussed in the next section.

3. Major Challenges in Accessing Finance WEs face dual challenges in accessing financial resources. As part of the overall entrepreneurial

class they face common constraints the private sector faces, particularly small scale operators, to access financial resources. In addition, as women, they face specific challenges associated with their gender. WEs with disabilities face even more challenges. The major challenges identified during this assessment are categorized under three headings.

3.1 Common Challenges

One set of problem is associated with structural problems that are common to all entrepreneurs, especially MSE operators. To start with, constraints arising from the low level of economic development restrict availability of infrastructural facilities that are essential ingredients for business growth and expansion. Constraints to access vital facilities, such as communication facilities, work premises, raw materials and inputs, choice of appropriate technology, etc... impede the efforts of Ethiopian entrepreneurs, especially MSE operators that account for the bulk of the country’s private sector, to create viable business activities that can grow and move into the ranks of medium and large scale enterprises. In short, macro economic conditions impede the ability of a large number of entrepreneurs to develop their capital bases which intern imply that they can rarely meet the conditions set by the financial institutions.

In this regards low capability to meet conditions of the banks, particularly loan guarantee or collateral were sighted as the main barrier to borrow from banks by both women and men entrepreneurs interviewed, for the purpose of this study. Out of the 13 business people, (10 women and 3 men), interviewed only three women were able to supply the required collateral to borrow from the banks, while for the rest of the respondents low ability to provide loan guarantee or collateral was the major factor that inhibited them from seeking bank finance to expand their business or to start new businesses. One can also add low capacity to develop sound business plan documents as the other barrier to loan finance.

The second set of challenges is associated with the underdevelopment of the financial industry.

The reach of the banking sector is restricted to the major urban centers, and even then the coverage is restricted to a few segment of the urban society. As a result Ethiopia is said to be one of the few under banked countries of Africa as bank per capita is about 6 million per bank. (Habtamu Dimtsu and Abraham Tesfaye, 2008). What is more, “financial access measured on the basis of population to bank branch ratio is about 159,000”, (Ibid).

The low development stage of financial institutions, have two implications. One implication is that due to their limited reach to the society, the ability of the sector to mobilize financial resources is not that robust. A recent paper presented at a workshop by an expert from the National Bank of Ethiopia indicated that only 19% of the Ethiopian adult population has accounts in financial institutions, (Getahun Nana, 2008).

The other implication is associated with the risk aversion attitudes of financial institutions. The situation reduces the responsiveness of banks to loan requests from smaller enterprises. “CBs, including the CBE, are believed to target mainly big and medium urban borrowers with relatively bigger investment activities and hence are not considerate when it comes to small borrowers, due to risk aversion attitude.”, (Habtamu & Abraham; IBID). In addition, banks do not lend to certain sectors, like for example non irrigated farming activities. One prominent business woman, interviewed for this study, said that she could not access short term loan for working capital, although she had long standing business relationship with many of the institutions. From experience it could also be observed that the third set of the structural problems is associated with negative internal factors of MSEs themselves, such as low management capacity, weak marketing skill and low technological absorptive capacities, limit the capability for business growth and expansion. Even if financial resources are readily available, many MSEs may need interventions through training and advisory services to benefit from the favorable situation.

3.2 Gender-specific Challenges

A number of factors impeding WEs access to finance were identified during the interviews and discussions made with selected business women and other stakeholders. The first problem is associated with high informal entry barrier to the services of financial institutions. Socialization is one of the mechanisms employed to facilitate business transactions in Ethiopia, which appear to be more so in the financial sector. In a male dominated society like ours, women find it difficult to easily socialize. As a way out they would tend to depend on male kin to facilitate issuance of loan through socialization. This was raised as one of the major entry barriers women face by most respondents, including the male business owners. Also, entry barriers were said to be high for new business starters to access loan finance.

According to the respondents two reasons can be sighted as the causes for this state of affairs. The first was said to be the fact that new business starters, especially women, lack information and the experiences as to how to approach banks, while the second was that banks trust entrepreneurs with whom they have long business relationships much more than the soundness of the business ideas. One respondent, for example, said that the first time she approached a bank for loan the response was rather cool. But when her husband intervened on her be-half the responses were warm and fast. Once she started business dealings and established good track records, she had no problem to get additional loans. Relationship lending was said to be common by the experts of banks interviewed for this study. In fact such loan products are called “clean loans”, loans given without any collateral, and “partially clean loans”, loans given with partial collateral. In both cases the loans are term loans and the important criteria are long business relationships and outstanding track records in repayment of loans.

The second challenge identified, is associated with the nature of the businesses most women are engaged in. In most cases women businesses are not only found in the informal micro enterprise sector, but the types of business activities they are engaged in are also relatively less capital intensive. For example, according to a CSA survey of 2003 more than 65% of all females in cottage/handicraft manufacturing industries were engaged in the processing of food products and beverages, As a result WEs often shy from seeking bank finance. This should not however imply that women are weak to accumulate capital. Women are proved to be more entrepreneurial when they are exposed to opportunities and have access to resources. In fact their capacity for capital accumulation is affected by their tendency, as mothers and wives, to spend what ever income they earn on the welfare of their families and to avert risks so as to make provisions for the future.

The third problem identified is associated with socio cultural problems. To start with, business women are encumbered with high household demand, which, together with the business demand, impacts their ability to solely focus on their businesses and by implication their ability to seek loan finance. Also, culturally women shy from pushing their causes too far, which again impacts their negotiation capability. The other socio cultural issue is the fact that women are careful to take, as well as to timely pay, loans. They take what they require and pay promptly when compared to their male counterparts. All the experts in the banks and MFIs indicated that women are more responsible in the

utilization of borrowed money and in paying back loans than men. The fourth problem, which is also partly associated with socio cultural factors, is the fact that

women have little access to education. Low level of education of women perpetuates their limited capacity for growing their business beyond the informal micro enterprise sector. As a result the businesses of most WEs are constrained by week managerial and marketing skills, finance and technology absorptive capabilities.

3.3 Challenges Facing Women Entrepreneurs with Disabilities

WEs with disabilities face additional challenges over and above the common problems faced by female entrepreneurs in general. The most important problem is associated with lack of readiness of the financial institutions to cater their services to entrepreneurs with disabilities. The following issues can be sighted as good explanatory factors.

Most banks are not accessible to persons with physical disabilities using wheel chairs.

Those entrepreneurs with hearing impairments can not effectively communicate with banks as banks do not have interpreters among their staff. While such clients can come with personal interpreters, it can not substitute the implicit trust that could have otherwise been the case if the communication is done with the assistance of staff interpreters.

With regards to those entrepreneurs whose visual sights are impaired, they have to sign with their fingers in front of a cosignatory witness whose sight is not impaired to even withdraw money from their saving accounts let alone other forms of business transactions. As a result they have to go to banks with a witness every time they go to banks for business transaction. Also, bank brochures are not user friendly for those who are visually impaired; as a result, even the educated once have to rely upon other people if they need information on available opportunities or the procedures of financial institutions.

In general, the findings of the study indicates that financial institution are not ready to practically address the needs of people with disabilities, which according to some estimates constitute 5% to 10% of the total population, a huge potential market to tap into.

4. Concluding Remarks

The challenges Ethiopian WEs face to access financial resources is a reflection of their marginalization in accessing critical resources as much as it is a reflection of the low level of development of the country. The study has demonstrated that under the existing financial market few women are able to secure financing from the financial institutions, and even then the magnitude of loan finance disbursed to WEs constitute a small proportion of the total disbursements. WEs’ access to credit and capital is limited, not only due to resource scarcity, but for a number of other reasons as well. The challenges facing the private sector are also the challenges facing WEs. In this regard the major challenges are associated with the underdevelopment of the financial sector that creates structural impediments to the development of the private sector in general and WEs in particular. The banking industry is weak in terms of its capacity to mobilize resources and to supply diversified and innovative business friendly financial products that meet the needs of the private sector, particularly MSEs. Due to their risk aversion attitudes banks create entry barriers to small firms through high collateral requirements.

The country is yet to acknowledge the importance of capital market for creating a viable entrepreneurial class through easing capital constraints. The MFIs have limited capacity to address the financial needs of MSEs. While these structural problems pose challenges that are common to the private sector as a whole, WEs face additional impediments associated with socio-cultural barriers and gender biased practices to access financial resources. Lack of resources to meet the conditions set by financial institutions like 100% loan guarantee or collateral and lack of information on the working of financial institutions discourage women from seeking loan finance. Cultural barriers inhibit women to expand networking and to persistently push their cases. Dual responsibilities, as mothers and wives on the one hand and as business owners on the other, encumber women with high household and business demands, which impact their ability for capital accumulation.

The situation of WEs with disabilities is even worse as they are affected by practical challenges to access financial services let alone loan finance. Most institutions do not have access for wheel chair users, nor have proper communication system to understand and address the needs of clients with hearing and visual impairment.

A number of things need to be done to improve women’s access to financial resources. Some of the major issues that may need to be considered are outlined as follows.

Financial institutions may need to be encouraged to initiate affirmative actions targeting WEs. Presently, except the CBE that is organizing women’s desk, none of the other banks have special desks for women. The establishment of women’s desk in banks is important to reduce the current entry barriers associated with relationship lending. The desks would also support women through providing information and advice on how to proceed with loan request, or they my even serve as business mentors for women clients.

Financial institutions may need to design and provide more innovative financial products that would enhance the gender inclusiveness of their services. For example this could be setting up of revolving funds to provide soft loans, or to ease collateral requirements,- like for example micro leasing facilities being initiated by ADCSI, etc.. Government intervention through tax incentives and other fiscal and monetary incentives would be necessary to encourage banks to address the specific needs of WEs.

Establishment of women’s bank may be the other measure that would solve the challenges facing WEs in accessing loan finance. At this stage it would, however, be prudent to emphasize the need for a priori identifying and answering practical questions like how it would differently address the needs of women, who its clienteles would be, what would be its geographical coverage, its costs and benefits in relation to other schemes like introducing special windows or funds for women in existing banks, etc, so as to ensure its feasibility in addressing the needs of Ethiopian business women.

Donors can also help in setting up loan guarantee funds with partner banks to ease the collateral problems WEs face in accessing loan finance. In this regards the current pioneering initiative of USAID, in the provision of loan guarantee fund through Bank of Abyssinia, would provide good example for replication.

Policy and regulatory measures may need to be initiated so as to encourage financial institutions to change their current mentality and start addressing the practical needs of persons with disabilities who could be their potential customers.

Promotion of business linkages between women and big companies and provision of training and advisory services like business mentoring, so as to develop the managerial and marketing skills of WEs, would be the other non finance related measures that would contribute to alleviate internal impediments for the growth of enterprises.

References

CSA, the 2007 Population and Housing Census Result Of Ethiopia; 2008. CSA, Report on Urban Informal Sector Survey; 2003 CSA, Report on Small Scale Manufacturing Industry Survey; 2006. CSA, Report on Large and Medium Scale Manufacturing and Electricity Industries Survey;

2006. Getahun Nana, “Policy Initiatives for Improved Financial Service Provision: The Case of

Ethiopia”; Paper to be presented at the AFRACA workshop in Addis Ababa; 2008. Habtu Dimtsu & Abraham Tesfaye, “Expanding Outreach through Linkage Banking: The Case

of the Commercial Bank of Ethiopia”; Paper to be presented at the AFRACA workshop in Addis Ababa; 2008.

ILO, Support to Growth-oriented Enterprises in Ethiopia, 2005

3.3. Recommendations

Financial institutions need to be encouraged to initiate affirmative actions targeting WEs like establishment of women’s desk.

Establishment of women’s desk is important to: Reduce the current entry barriers; Support women through providing information and advise on how to proceed with loan requests

and serve as business mentors for women clients.

Financial institutions need to design and provide more innovative financial products that would enhance the gender inclusiveness of their services.

Setting up of revolving funds to provide soft loans.

Easing collateral requirements, i.e. introducing leasing facilities.

Government interventions, through establishment of capital market and introduction of fiscal monetary incentives, would also encourage banks to address the specific needs of WEs and other disadvantaged groups of society.

Policy measures that would encourage financial institutions to change their current framework and start addressing the practical needs of people with disabilities, who could be good potential customers.

Donors can also help in setting up loan guarantee funds with partner banks to ease the collateral problems WEs face in accessing loan finance.

Establishment of women’s bank may be the other measure that would solve the challenges facing WEs in accessing loan finance. It would be prudent to emphasise the need for a priori identifying practical issues like how it would differently address the needs of women, its clienteles, geographical coverage, etc.

Promotion of business linkages between women and big companies, provision of training and advisory services like business mentoring so as to develop the managerial and marketing skills of WEs would be other non finance related measures that would contribute to solving internal impediments of enterprises.

It is also important to mention that loan finance is not the only source of capital accumulation other business financing mechanisms have to be identified and developed in the form of financial packages.

Encourage and capacitate WEs to engage in growth oriented business activities through business development services.

Women are careful to take loan, as well as to timely pay loans. They take what they require and pay promptly when compared to their male counterparts. Financial institutions have to exploit this opportunity and develop loan products customized to WEs.

Empowering women to run their business professionally and enable them to build their capability to manage efficiently their households.

Supports by various actors have to be coordinated to bring maximum impact on WEs’ enterprises to make them competitive both in the local and international markets.

Banks have to address the needs of persons with disabilities and develop and render services which are disability friendly.

4. Barriers Faced by Women Entrepreneurs in Developing Products and Establishing Services for Export Market

4.1. Forum Proceedings

The Fourth Consultative Forum on “Barriers Faced by Women Entrepreneurs in Developing

Products and Establishing Services for Export Marketing” was organized by the CAWEE on March 12, 2009 at the Hilton Addis in Addis Ababa. The Consultative Forum had the participation of 300 participants (210 women and 90 men) representing stakeholders from policy makers, implementers, business associations, Chambers of Commerce, NGOs, academic institutions, consultants, researchers, WEs, donors and other concerned development partners that promote the causes of women in business.

The Consultative Forum was inaugurated by the opening speech of His Excellency Kebede Abera, MP, Chairperson, Trade & Industry Affairs Standing Committee in the Parliament. The keynote address was delivered by Her Excellency Ms. Sile Maguire Ambassador of the Ireland Embassy, Addis Ababa. The welcoming Speech was made by Mrs. Nigest Haile, Executive Director of CAWEE. The proceedings of the conference and the Consultative Forum received a wide coverage by the local press including TV, radio, newspapers and website.

Participants registering Participants attending the forum

Inaugural Session 12th March 2009 14:00- 15:00 hrs

Start of the consultative forum

• Mr. Andualem Tegegn — Consultant, who is the moderator of the Consultative Forum welcomed the

distinguished guests and participants. • Mrs. Nigest Haile, Executive Director of CAWEE in her welcoming speech highlighted the main activity

areas of CAWEE since its establishment in June 2004. CAWEE mainly targets the promotion of Ethiopian WEs, with a special focus to women exporters. She further indicated that the mission of CAWEE is to promote Ethiopian WEs, with a special focus to women exporters, both existing and potential or emerging exporters. She further stated that CAWEE believes that “Empowering Women Economically is Key to Development”. CAWEE aims at creating a core group of businesswomen engaged in export activities. Accordingly, the vision of CAWEE will be to create globally competitive core WEs class in Ethiopia. In this respect, CAWEE works in the diverse sub-sectors of trade and industry where women are involved in. Beyond the provision of export focused business development services that are trainings in international trade, mentoring services, provision of web-based trade information, facilitating product development, market promotion and participation in international trade shows and facilitating business contacts. CAWEE is also involved in advocacy work with the aim of targeting on issue areas and challenges those women in business face.

Mrs. Nigest explained that in this respect, CAWEE closely works with the concerned ones that are operating within and outside the country. Through the contact created with “Connect Ethiopia” Dublin, Ireland, CAWEE was able to send to Dublin profiles of thirty three (33) companies, where 13 of them were identified, to start with. The efforts of CAWEE, in the promotion of Ethiopian women in business, are complemented by different initiatives. One of the major initiatives, facilitated & supported by the US Embassy is the WEG which was established in July 2006, to address the constraints faced by growth-oriented WEs in Ethiopia. CAWEE is an active member of the WEG. WEG is in the process of getting registered as the OWIT, Addis Ababa Chapter. She said that in further supporting the Ethiopian business community, the US Embassy has been working on the establishment of the AmCham in Ethiopia. The AmCham in Ethiopia, the third one in Sub-Saharan Africa, was officially launched here in Addis Ababa at the Sheraton Addis, January 12, 2009. It is expected that CAWEE will work closely with the AmCham in the future.

Mrs. Nigest, Executive Director CAWEE

Mrs. Nigest further highlighted on the access to finance scheme supported by the USAID guarantee fund, which started to be operational few months ago, through Abyssinia Bank, the fund is allocated for both the local and the Diaspora WEs.

WEs operating in manufacturing and services sub-sectors are confronted with diverse challenges that directly affect their growth and expansion, mainly when focusing the international market. Amongst those problems and challenges, the issue of product development, is one of the barriers that women owned and managed businesses face. Product development is key to the success of any business. CAWEE had a recent experience to share in this respect. With the support secured from CIDA and the Government of Ethiopia, 6 handloom companies, all owned and managed by women, went through a process of product development for 10 months, which resulted in specialization of products for each of the companies, the production of professionally made marketing materials and market linkages.

In concluding her speech, Mrs. Nigest said that following the presentation of the research findings, discussants representing private companies engaged in manufacturing and service sectors as well as buyers and consumers will be contributing their views on issues related to product development. Based on the research findings presented and the contributions from the discussants, this forum is expected to further discuss and propose opinions, workable recommendations and policy ideas for further actions and interventions.

Her Excellency Sile Maguire, Ambassador of the Ireland Embassy

Her Excellency Ms. Sile Maguire, Ambassador of the Ireland Embassy in Ethiopia in her remark

highlighted on WEs based on the Irish experience. She indicated what has been done to narrow the gender gap in enterprise development by using concrete facts and figures. Her Excellency further highlighted that the global market competitiveness is getting tougher and there is need that high-growth companies produce and sustain, create enabling environment for innovative start-ups and to support entrepreneurs to grow their businesses. She indicated that there was wider gender gap and untapped & underdeveloped source of enterprise in Ireland in previous times. Taking this into account, interventions were made to increase the number of WEs and the rate of entrepreneurship.

Her Excellency explained using findings of researches conducted in Ireland that women who know other entrepreneurs are almost five times more likely to be an entrepreneur. But on the other hand, fewer women have confidence in their ability to start and run a business than men and fewer WEs have high growth expectations or aspirations. She said that there is need to have good stories to inspire others. Her Excellency’s contribution was highly important to the consultative forum.

H.E. Excellency Kebede Abera, Chair Person, Trade & Industry Affairs Standing Committee in his opening remark said that he is pleased to take part in this very important event that will be discussing one of the issue areas of concern, “Barriers that Women Entrepreneurs Face in Developing Their Products and Establishing Services for Export Marketing”.

His Excellency Kebede Abera, Chair Person, Trade & Industry Affairs Standing Committee

H.E. indicated that the House of People’s Representatives of the FDRE, giving special focus to the promotion of Trade & Industry, has established the Trade and Industry Affairs Standing Committee,

which he is chairing. The Trade and Industry Affairs Standing Committee, is one of the Standing Committees among the 13 different Standing Committees operating in the Parliament.

The Trade and Industry Affairs Standing Committee works very closely with the rest of the Standing Committees that are operational in the Parliament. With a special focus to empowering women, the Trade and Industry Affairs Standing Committee works closely with the Women’s Affairs Standing Committee and the Parliament’s Women’s Caucus.

H.E. further emphasized that the role of entrepreneurs in general and WEs in particular, in the economic development of Ethiopia, is of paramount importance. WEs have multiple roles to play – they are sisters, wives, mothers, professionals, community care takers and entrepreneurs. Since women play these diverse roles, that demand more time, resource and energy, WEs need to be supported and encouraged in this field.

H.E. in concluding his opening remark thanked the Spanish-NEPAD Fund for the sponsorship and congratulated CAWEE for the initiative that it took to promote WEs, mainly exporters, and in particular in organizing series of consultative forums. H.E. finally said that he would like to assure the participants that, the efforts of the Trade and Industry Affairs Standing Committee, to empower women economically will be further strengthened and the Committee will continue closely working with non state actors, like CAWEE, to further promote Ethiopian Women in Business.

Technical Session Topic: Barriers Faced by Women Entrepreneurs in Developing Products and Establishing Services for Export Marketing

12 March 2009 15:00: -15:45 hrs

Moderator: Mr. Andualem Tegegn

Presenter: Mrs. Assegedech Woldeleul Rapporteur: Mr. Yared Fekade

Objective of the Study: Identify barriers in product development; Promote and share some knowledge about product development and service establishment for

export market; Suggest/outline activities needed for further improvements.

Mrs. Assegedech Woldeleul, presenting the study

1. The Study Coverage:

Restricted to Addis Ababa Focused on SMEs engaged in manufacturing and service sectors

WEs with disability

2. Methodology Interviewed more than 21 entrepreneurs, individuals, organizations: Export promotion Department of

MoTI, ECA, ECDD, EWDNA, ILO, Intellectual Property Right Office, Addis Ababa; etc. Review of secondary data Participative observation Previous surveys Purpose designed evaluations

3. Introduction

Barriers Faced by WEs Advantages of Product Development and Service Establishment:

Enables to take advantage of being first in the market;

Doing business with only one type of product/service for a long time may not be sustainable (product life cycle & technology dynamism in product/services in international markets);

Variety of products and services generate more jobs;

Source for bringing foreign currencies;

Role model to others; productive people i.e. productive society;

Organizational growth;

Attracting investors through export business e.g. tourism can be the potential promoter of Ethiopian brand thus improving country image;

Profit earning by selling different & new products/services mix which lead to profit maximization.

Some obstacles happen at the initial stage and some at the implementation period. Some challenges are obvious and some are less obvious.

Marketing Related Impediments

Lack of target group need study (fashion, design color specification) Consequently, market & financial risks come across because the entrepreneur & the customer did not meet in the market;

Lack of analyzing Tariff and non-tariff issues;

Lack of appropriate sampling;

Limited pricing approaches and not forwarding price timely;

Lack of market testing (not knowing accepted, rejected products/services, modification requirements maximizes market failure);

Inappropriate decisions on the overall marketing mix (distribution, agents, promotion, non tariff barriers,) i.e. uncompetitive in export market;

Competition (similar product sellers, production cost, selling price);

Lack of domestic marketing experience;

Short of networking both among women entrepreneurs and with other men colleagues;

Lack of track record & International references;

Inadequate focus to some business areas;

Short of current and forecasted information on business environment, global regulations, quality requirements, as a result entrepreneurs are doubtful to enter export markets.

Marketing Research

Lack of awareness on the importance of market research;

Budget constraints to conduct market research;

Inadequate focus of research institutions for product development;

Planning finance only for the development of the new product/service but failing to plan for further market introduction & general growth of the business;

No effective promotional programs (quality brochure, trade fair, foreign visits, agents, preferred offices, display/show rooms, etc.).

Fear of Taking Risks

Entrepreneurs are doubtful on whether there will be international market (uncertain demand);

Lack of experience in international market;

Business environment of foreign countries differ from each other, thus the potential risk is more sever;

Doubt whether it is economical to transform the idea to product/service;

Unwillingness to take risk using their scarce capital.

Limitations Related to Working on Customized Products

Entrepreneurs find difficulty to process customized/on order product (high cost of raw material & accessories which results in development costs at the initial stage);

High risk ground in terms of design, color, size as compared to standard ones;

Customers willing to pay only after trying the product/service;

Some customers change their minds after ordering;

Small quantity & not repeat purchase.

Obstacles Related to Knowledge/Skill

Lack of focused trainings such as basics of product/service development, focused marketing topics, handling international vis a vis domestic business, potential risks that arise during new product/service development, international business environment, etc;

Limited facilities of training institutions.

Pitfalls Associated with Raw Materials Supply

Supply problems (not getting the right specification, quantity and timely);

Most manufacturers of raw material allow purchase only in big quantity;

WEs’ capital is scarce and can not purchase huge amount;

Retailers’ asking for higher prices & this is the cause for not finishing a batch with the same accessories.

Lack of Technical Resource

Not getting the required facilities (equipment, organizing production process, timely maintenance) because of the unavailability of technology & finance (technology has big role in product development);

Absence of the required technology (in some operations), it impacts scaled operation & waste in raw material input;

Obstacle in shifting from old technology to modern when need arises.

Hindrances Related to Gender & Disability

Misconception that men can do the job better than women;

Limited networking with WEs & others;

Doing activities outside the country is more difficult (family commitment & physical limitations);

Consumers expect to buy products/services of women and the disabled at lesser price.

Constraints Related to Reward/Motivation and Protection Reward/Motivation

No clear incentive policy for idea creators;

Limited financial reward (sales price to enter international markets is lower, difficult to cover development cost).

Protection

Entrepreneurs Ideas not much protected;

International Patent Rights Protection costly and process not as easy (versus to financial capacity).

5. Key Recommendations to Overcome Some of the Barriers

Lowering Stumbling Blocks Related to Marketing

Developing marketing capability by studying: consumers’ behavior, pattern of consumption indication of price, etc;

Market size, transaction systems; in distribution/agents practice/effectiveness;

Packaging, and labeling legislations;

Involving Ethiopian Embassies abroad

Market testing (domestically & Internationally);

Strengthening service businesses domestically;

Trade fair (appropriate planning, desk research, correct participation, follow up).

Apathy is the Deadliest Enemy in Marketing

5 Ps (Price, Product, Place, Promotion, Person) are strategic and relevant to marketing;

Joining professional associations (data & information, experience sharing);

Referring web sites, trade journals;

Conduct market researches;

Refer various research findings.

Improvement Schemes on Shortage of Capital

Using own fund appropriately in cost efficient manner;

Sourcing financial institutions;

Showing financiers women entrepreneurial capability;

Planning finance not only for product/service development but also for entering markets and for continuous growth;

Plan repayment schedule;

Work out cost minimization programs;

Separate business fund from personal finance.

Lessening Risks (Marketing and Financial)

Conducting survey/research on marketing, technology, finance, organization, staffing, management, production, competition, etc;

Know which markets to enter and which ones to avoid (for cost & effort reasons);

Set clear vision & work out a business plan;

Conduct market testing to avoid risks at initial stage.

Potential Solution to the Issue of Customization of Products/Services

Minimization of production cost (will benefit the entrepreneur to diminish its expenses & customers

to get an opportunity to buy at a reduced price;

Make product/service very unique (adding value will give better offer/usage to customers and justifies entrepreneurs to put value added pricing approach).

Probable Solutions to Constraints on:

Training Participating in targeted training programs;

Self learning (trade journals, web sites, foreign countries business practices, etc);

Participating in experience sharing forums.

Raw Material Supply Lobbing through associations or other relevant organizations for bulk purchase;

Preferential treatment for women entrepreneurs to buy in small quantity.

Technology Adapting current technology from other countries;

Refer & learn how others do it;

Consideration by the relevant authorities on technology transfer facilitation.

Probable Answer to the Stumbling Blocks Related to Gender and Disability:

Educating the society to improve attitude towards gender and disability;

Empowering women and particularly the disabled socially and economically;

Giving emphasis to gender and disability issues in policies and making focused implementation;

Exposing WEs, in particular the disabled to different market situations (to participate in national

and international trade fairs);

Encouraging the disabled to come up & work hard within their capacity.

Prospective Answer to Minimizing the Pitfalls Related to:

Motivation/Reward

Develop promotional support program by the relevant organizations;

Develop reward schemes for WEs who come up with innovative ideas. Protection

Simplify the IPRs procedure further;

Participating in relevant IPRs forums.

Conclusion

The researcher concluded her presentation by stating that barriers exist in every arena of business but the success of an entrepreneur is defined by innovation, perseverance and commitment.

Discussants Interventions:

Mr. Jacques Dubois, Partner at Muya Ethiopia Plc Mr. Dubois appreciated the presence of WEs who are engaged in various fields of activities in the

forum. He started describing the recent experience that Muya Ethiopia Plc is working in the hand woven textile and crafts sector mainly for ladies fashion and fashion accessories. The Amharic word “Muya” means Talent. Mr. Dubois explained his role within the organization as promoter and developer of very traditional crafts. He said that usually the potential of traditional crafts development is not highly known by large share of the population. He said that in the organization, they are trying to use the value of the tradition to be embodied in the end product.

He explained the richness and diversity of Ethiopian culture. Mr. Dubois said the culture of the country is something fabulous and is a potential which is more than oil because one day oil will be finished but culture will never be finished. Even though the culture in Ethiopia is very rich, it’s not always accessible as needed by the crafts women or men. These people have certain knowledge by tradition, they have been educated by their parents or relatives but the access to references and events which upgrade their product knowledge is very much limited. In his view the first thing to do is to facilitate accessibility to traditional designs in order to develop valuable craft products.

Mr. Dubois further said, although there is a big potential in traditional crafts designs, there is lack of research and studies in this field. Even if there is a research on the subject, the publication comes with very limited copies and disappears. He said that he wants to recognize and give credit, to a lady that has been working in the Tourism Commission in the 70’s, who had produced fantastic work about costumes, about housing internal decoration using traditional design patterns. But unfortunately only few copies are left and it is difficult to access it.

When we try to design something modern with cultural background, we need to have access and acquaintance to this culture. The personal identity associated to the cultural environment can produce innovation or creation. With this respect in “Muya”, they are using Ethiopian traditional costumes which are rich in design; because like many other things the country is at the centre of cultural crossing high way with the Middle East, the Mediterranean Basin, Arab and African influence. At “Muya” they started looking and studying various cultures, there are different costumes from the South, from the North, from the East and West. Based on the traditional costumes designs and patterns, they try to develop modern products. The costumes are made by using traditional and

imported materials, the color is the trend. The products have been very well welcomed, and already they have some orders from Japanese, French and from other European customers.

How can we go from the traditional to the modern? Mr. Dubois said, it’s not an easy job. If someone wants to produce T-shirt, digital camera, it’s relatively easy; once the skill, the material, the data, is available it will be produced. Internet and other media can be used to promote the final product. For traditional collections which have artistic feeling then it will be necessary to talk about context, belief, tradition, conservatism, and many other things, which makes the product at the end something really exceptional.

Once these designs are interpreted into fashion accessories, to clothes, to think that people especially can buy and integrate it in to their life, a producer faces a lot of challenges and constraints. One of these challenges is the color concentrate. In order to avoid this problem at Muya, the owner is a member of color group in America. The group gives the company about the color preferences next year, next summer, next fall or next winter. Therefore there is a necessity to get ready to meet this kind of color requirements. How do the small producers, women artisans get this kind of connection? This is one of the problems they face. Unless the color and design knowledge and information is available, it will really be difficult to involve into the export business.

The other important thing when you involve in fashion is to know the client type (local, Diaspora or other export market segment). Not all of them would buy the same things, tourists will look for something that is to put in their luggage and take it home, residents will likely take it home and eventually take it to his/her country. Same products might not be suitable for the Americans and Japanese, the market plan in terms of the product has to be distinct for each export destination country. There is need to know the gender, group, class, age of customers, what can they afford and especially the trend in fashion. This is a very subjective sector where things change from one day to another. One has to produce things according to the seasons abroad and has to know what type of material to use for the different products and seasons. The products mostly have to be organic or pure. Every one is concerned about the authenticity of the material and there must be a readily available explanation.

After talking about all the constraints that have been enumerated in relation to the development of product design, the next issues to address are quality and consistency. It’s not enough to do something good at one time, the product quality and standard has to remain consistent. That’s why the problem of copying comes into the picture. In Ethiopia, most of the craft people who produce something new just hide their work because they don’t want to be copied. Copying of course can also be a challenge in this sector but it might also push/force to innovate.

The traditional weavers and potters are people who are really despised in Ethiopia because of many cultural reasons they face problem of intermarriage, problem of class. As a result people engaged in weaving, crafts and pottery activities sometimes loose confidence in their knowledge and skills and abandon it to look for other kind of jobs. Mr. Dubois said knowing this reality in Muya, they always try to make the weavers and potters working there to feel good about what they do. By making them feel good about what they do, a lot has changed in their attitude. They try to make the company look like not a factory but a small restaurant they get invited for lunch, they get uniform and suddenly they start feeling part of the society. This is where lots of efforts have to be done. Mr. Dubois thinks that the status of the crafts in Ethiopia needs really strong reform. Issues related with training, spacing and condition of work has to be addressed in addition to the other pertinent factors for the sector. After production the next step is commercialization of the products. Good product goes hand in hand with good packing. Abroad people are very much concerned about the packing of a product. People most of the time, if they consume different products, they keep the package as souvenir. This packaging has to be genuine; it has to be for every culture. The timing of production is also relevant. every object has to have a tag, has to have reference so you can communicate with the potential buyer. Packing and costing are very difficult jobs, people don’t want to know the cost calculations, they want to know how much it costs them when it comes, then they can say I can really buy it or not.

The product needs a story. A product without a story can not sell well. But the buyer is informed that the product is made by weaver with such and such condition, with such and such culture, with such and such values, it becomes a story and becomes a different product.

The other point which needs to be addressed as explained in the research study document is customers’ expectation. Most of the time the people who want to export don’t have the exposure, they don’t know really what people are looking for. If they don’t know what they are looking for, they don’t know that this need may change from one to another. Building on exposure is one of the major tasks of an exporter.

As concluding remark, Mr. Dubois emphasized that conducive environment has to be further created to enhance the competitiveness of exporting enterprises in the sector. He finally said that although the global economic crisis in the world is high on the agenda of nations, there is always a way

out and it is possible and with this note he thanked the audience.

Mrs. Samrawit Mogues, Owner and Manager, Travel Ethiopia

Mrs. Samrawit started her points by asking the participants if they consider tourism as an export sector. Tourism products/services are location specific, it’s not like as manufacturing or horticulture where products are packed and exported. However, she argued that the tourism sector generates foreign currency and has to be considered as an export sector. Tourism is one of the fast growing industries in the world. In underdeveloped countries, it’s a catalyst for growth and work against poverty.

In tourism, women and young people are highly employed. In a country like Ethiopia where the population is growing and where there is low standard of living, she indicated that tourism could have brought significant difference. Mrs. Samrawit said that improvement is seen in the development of the sector but not to the extent of the country’s tourism potential. Ethiopia has great and diversified attractions. The question to be asked is whether these resources are used effectively? The image the country has is one of the major barriers for tourism product development. It is not only a barrier for tourism but for the entire economic sector. How many investors are coming for textile, horticulture with this image? There is need to work on the country’s image even if it is challenging and expensive task. She further emphasized that Ethiopian Embassies abroad have to be tourism oriented not only tourism but also investment oriented. Ethiopia has got 8 heritage sights registered, Egypt has got 6 but there is a big gap in terms of the level of the tourism development.

The other barrier is the underdeveloped community based tourism. She said her company has success story on community based tourism. They have a lodge in Afar region, where the communities are pastoralists. She explained that they put up that lodge in the middle of nowhere, and were able to higher 30 local people. The women tend to be very active, work oriented and one of the woman who was working as assistant cook became a chef. She gets comparatively a very good salary and she built her house in corrugated iron sheet roof even though it is the hottest area, this is a sign to show she is one of the richest ladies in that area. On the other hand, her company gives micro loan for the women so that they supply for the lodge goats and chicken. Unfortunately, this model was not successful with the men, who were given seedling assistance and a system in providing them water so that they produce and supply vegetable to the lodge, but it didn’t work out. This shows how women are very productive in service industry.

Local people around cultural heritages and tourists sites have to benefit from the tourist attractions. They need school, clinic and other social services. If they are provided with such kinds of assistance, they will be number one to protect their resources. So community based development tourism is very important in the product development.

The other thing is capacity building. There is strong belief that there is need for further developing tourism curriculum in various colleges and universities. The FM radios have been very successful in social interaction; the main problem is the culture problem. Mrs. Samrawit said if we are using the media to educate the public at large and at the same time students at school, it will avoid the main problems.

Lack of proper accommodation at tourist destinations affects negatively the tourism industry. She further explained that tourists like the country, they like the people and every thing but when it comes to accommodation, especially if they come from Kenya or Tanzania, we are at a very low level if we want to put a lodge at any place we have to be very echo friendly, we can not put a 3 story building in the middle of no where out of bricks. We need to build using the local materials; this is how it is done in the other part of the world namely Kenya, Tanzania, Botswana and the others. But the banks are comfortable to give loan when 3 stories or 4 stories buildings are built but not for eco-friendly lodges. Educational trips have to be organized in neighboring countries to see how they are using lodges in an eco-friendly way.

The other main issue is security. Ethiopia, compared to other countries, is one of the most secured places. This is what makes Ethiopian people very different and conducive for tourism development. Unfortunately it is not efficiently used as a promoting factor.

Mrs. Samrawit explained further the feed back she is getting from tourists visiting Ethiopia. Her company has a feedback mechanism through questionnaire for every visitor. Most of them say that this is a country where they are not spending their money, because of the problem related with the mode of payment. There is need to use modern payment facility like credit cards. She further indicated that there must be focus in the formation and operation of tour operators to ensure good and efficient service delivery to tourists because this will complement the image building effort of the country. As a concluding remark, Mrs. Samrawit emphasized the need to efficiently use the tourism potential of the country to bring in developmental changes and with those remarks she thanked the audience for its attention.

Mr. Philip J O’ Dwyer, Director of Connect Ethiopia

Mr. Philip J O’ Dwyer started by thanking the participants and then asked how many consumers exist in the audience which was answered positively by all. He then asked the participants to think about the global trade around the world from oil to gas, to textile, to agricultural product, food, horticulture, flowers, leather, jewelry, etc. and all the products are traded all over the world. The products are exported from one country across the border to another country, all that is international trade.

He then continued asking the participants how many of them run businesses? Out of that number how many have exported? In the international trade that has been going on all over the world, 98% of all that trade is traded by small to medium sized enterprises. He further said that those participants, who said that they run business and export, are in small and medium size enterprise category. It means that they are part of that 98% that trades globally. For the rest of the participants who are thinking of starting a business or about to exporting a product will also be under this category until they become big company with lots of staffs, lots of offices, lots of branches and a brand. He asserted his argument that this subject affects every single person either as a buyer or a seller, either a consumer or producer. If a person is not a producer, he/she is perhaps providing a service some where in the supply chain between the products that are produced and consumed. Mr. Philip further explained on consumer prospective and the collaboration between Connect Ethiopia and CAWEE, the momentum and objective. He said that in one way or the other everybody is a consumer and spend money every single day and makes the choices each day about the product that he/she buys and make decision on the service that he/she will have. The question to be asked is what makes the choice of one product over another or one service provider over another. They are competing with each other, they are providing a range of products in the hope of attracting the buyer into their shop, into their services, but they have competitors. In the competition the choices that consumers make, some of them are emotional, some of them are related with the price, the packing, the color, the type of service, etc. In the global trade that is done by small to medium size enterprises, consumers are making similar choices, it is no different the kind of the choice that a person makes in Ethiopia. They are putting the same kind of value judgments on the goods they are buying in their country. And the vast majority of goods these days, not every thing is imported so there is an opportunity. If a person is trying to export that's his/her opportunity. It’s trying to get inside the mind set of the consumer in the other country. It is important to think about countries in that context.

Connect Ethiopia is an organization from Ireland working with business people and trying to develop business between Ireland and Ethiopia through capacity building, knowledge transfer, stimulation of trade and despite the current economic crisis trying to find investors as well. Last November, there was a trade mission in Ethiopia and selected 13 companies which are connected to CAWEE. It is expected that the number of companies will increase. Two professionals, one is professional retailer the other is professional buyer, made a value choice on how much support can be given and start with fewer numbers of companies.

The current economic crisis is not necessarily a problem, there are always other opportunities, there is always some thing on the flip side that needs to be considered, for example an enterprise may

be more competitive in an area now, that it was not competitive before because cost has gone down in certain areas while still the costs are gone up, there is need to examine the business. It is advantageous just to examine what potential can come out of the current economic crisis. This is what is done in Ireland for the 13 companies- price values, choices and other factors are evaluated.

Connect Ethiopia is doing research on promotion and is working with 300 retailers in Ireland though the organization called Retail Excellence Ireland. Samples are already collected from all of these companies and those samples are making a way to in the hope of generating orders. A kind of logistical organization is set up here where one purchase order comes and it will be distributed and then collected by the program to put it into one consignment and send it back to Ireland. It just makes it user friendly where by a certain buyer in Ireland instead of doing let’s say 13 purchase order they just do one. There is a trade facilitating project which is working on digitalization of trade and mapping the different products that come out from Ethiopia, so they can be put up digitally. That will considerably reduce transaction cost and time to make, from the time the purchase order to go through.

After having a number of discussions with CAWEE and the WEs, Connect Ethiopia is looking at a possibility of setting up a warehouse in Ireland, with a view in providing logistics. If companies are trying to sell products from here it can be simpler and cheaper to certain supply of common products to use a warehouse in Ireland and distribute from Ireland not Ethiopia, to fulfill purchase orders from Irish retailers. So there are a number of things around that Connect Ethiopia is also developing. Internet sales strategies are also looked at and do certain amount or consultancy works with some of the companies. Depending on the economy of Ireland, Mr. Philip J O’ Dwyer informed that they are also trying to organize probably in November this year or April of next year visit by a group of buyers from the retailers and professional buyers to come to Ethiopia. Finally, Mr. Philip J O’ Dwyer said that if participants want to look at the website of a successful female entrepreneur as an example they can log on to endless.com. And At the end he reaffirmed that success equals innovation, commitment and perseverance.

Mrs. Maud Druesne, Buyer Consultant

Mrs. Maud Druesne started her intervention by emphasizing on the need to focus on buyer’s goals. She

said the buyer is looking for the cheapest price, the cheapest supplier, with the cheapest price and also looking for quality, the best quality in order to meet the consumer’s expectation. Then the third point would be to guarantee his/ her supply chain, i.e. he/she is looking for longtime relationship so he/she needs to rely on the supplier to trust them. The last point is competitiveness. A company needs to be the better, the best one. It needs to have a unique product or service. After looking at the buyer’s mindset, the next challenge in an international business is the big problem of miscommunication. For example a French buyer, who does not speak English very well, and an Ethiopian entrepreneur he/she will have to speak English with him/her, Mrs. Druesne advised to have a written agreement, a written confirmation of what is said like for example an email or a contract.

For example if the buyer could think it will have a global good level of service but with huge changing level of quality from time to time, so in that case an entrepreneur might be afraid to face the continuous reliability requirements. The best way to do is to make the quality stable with reliable simple product. But if an entrepreneur does some thing complicated with high quality product to meet all the demand from the buyer, he/she might not achieve the promise and will lose the buyer, then will lose the contract.

The other issue is lack of reliability of own supply chain. The enterprise needs to guarantee the raw material quantity, quality, and the skills of its employees. If deadlines are not respected the enterprise will lose its buyer, so it needs to make sure what is going on in supply chain to identify and to anticipate potential buyers and optimize the business. Then this will create trust for the buyer. The golden rule will be written agreement all the time to guarantee the standardization of the quality. To make sure that every time the product will be exactly the same and the buyer will know what he/she will

receive. And there is need to try to meet the buyer country’s standard. Because for every country there are different standards, different expectation, so there is need to know what they are. Therefore it is essential to guarantee the supply chain.

Mrs. Maud Druesne explained how entrepreneurs can optimize their business by avoiding classical traps; she said she knows them because she was a buyer. First of all the price, if the entrepreneur is discussing with the buyer about price, he/she needs to give the final price, the global price, he/she needs to take the Ethiopian price and transform other additional cost then give the global price. The buyer is looking for the global price because he/she is going to compare it with other price offers.

For the raw materials, buyers are looking for fixed price for like 3 years which seems difficult. What she suggests is to negotiate with the buyer. In order not to be harmed by the raw material price fluctuation because if the price is linked to the price of the raw material, there is need to be able to move the price in a year, every year or every time the raw material price is moving. Then in same way it is essential to get rid of the bad effect of exchange rate. Then one should boost his/her brand image and make the buyer comfortable with his/her company. Contacting the buyer before he/she does it will also contribute to trust building. In addition, creating a simple but a good website enables buyers to easily access information on products and services offers. In addition to build more trust and establish long lasting business relations, inviting buyers is one of the mechanisms. Finally Mrs. Maud Druesne said these points perhaps are simple or obvious but next time if a person meet a buyer he/she has to look at these points see if he/she copes with them and then after he/she will be good with the buyer.

Floor Interventions:

Mrs. Mesenbete Shenkute, who is the Vice President, Credit Process of the DBE started by appreciating the organization of the forum. She further said that her appreciation goes also to Mrs. Assegedech Woldeleul who is the researcher and presenter of the study, and she is also impressed by Mrs. Samrawit, who really showed the potential of the tourism industry in contributing to the country’s economy. She asked the presenter to explain, how the WEs handle the challenge they are facing when entering international markets? Mrs. Mesenbete highlighted on the barriers of the marketing aspect and on the need to conduct market research before getting involved into international markets. Her second question focused on the availability of specific programs related to enabling WEs enter international markets taking into account the cultural differences which affect them not to be treated as male entrepreneurs. And further she wanted to know more on the challenges WEs face in the tourism industry.

Ms. Yetnebersh Negussie Advocacy and Training Head in ECDD started her intervention by extending

her thanks to CAWEE for two reasons. The first one is the attention given by CAWEE in promoting trade and investment which is highly required by African economies, it is an excellent intervention. And she further appreciated the inclusion of issues related with people with disability in all the consultative forums which have been organized by CAWEE. In all the forums, issues related with WEs with disability and women with disability have been addressed and were made part of the research studies and it’s really an excellent model of inclusion. Then she asked whether the issue of ethics was addressed in the study? She said that she has seen some studies and books which indicate that women happen to be more ethical and promote ethics within their business. Is there a possibility of efficiently utilizing the benefits of respecting ethics by WEs?

She then further emphasized on the need to address the issue of gender and disability in relation to attitudinal change and access to resources like microfinance. She symbolized her intervention by giving an example, of two ladies selling “Enjera” (local bread) and if one is blind and the other is not. She indicated that most of the time people would like to buy, definitely from the sighted lady but if someone go to the church and see two women begging side by side, if one is sighted and one is blind most of the people want to generously give for the blind one; there is this clear difference. Finally she requested clarification if only minimizing the cost of a product really is a solution to compete in international market? She asked how the discussants who are already in business handle this issue.

Mrs. Martha Getachew, who is owner and manager of Abba Garment, said that she wants to thank the

discussants for their contributions. Her question is in relation to ensuring price and good quality. She personally has been struggling to have competitive price in international market at the same time having good quality and consistent products, making sure that she competes especially in the

international market. Fair trade issues have been raised and are requiring whether employees are paid fair salaries, if their working condition is good, if the place where they are working is well air conditioned, they have other additional facilities which will raise the cost for production. In the international market, price is one of the important factors which affects competitiveness. Mrs. Martha asked how to strike a balance, the right price and right quality being a fair trade producer.

Mr. Ginjo Giya, who is Executive Director of Community Vision Ethiopia after thanking the moderator,

the researcher and the discussants, congratulated CAWEE, for enabling the flow of useful ideas in product and service development. He then said that he wanted to know the sectors and sub-sectors included in the research. He explained that in product development considering issues related with standard is essential. He asked whether the researcher consulted the Ethiopian Quality and Standards Authority. He said that product development requires creation and strengthening of enabling environment whether it is institutional or policy environment, awareness creation on quality and standards support significantly product development when producing for export markets. He then commented the research presentation concerning avoiding risks, he said that it will be difficult to avoid risks but he explained that the best approach is to build capacity to mitigate risks. Any body who is entrepreneur is risk taker in the first place and profit is a reward for the risk that entrepreneurs are taking.

Mrs. Tigist Lemma who is a consultant and trainer said that she appreciates the conclusion, because it

is mentioned that innovation, perseverance and commitment are very important in promoting business. Most of the businesses in Ethiopia particularly those owned by women are based on sole proprietorship and much of the decisions are made and the business is managed and coordinated by the business owners themselves. Mrs. Tigist asked to get clarification on the need for diversification of services. The services depend largely on the desire, motivation and aspiration of the owner to grow and asked whether the researcher has tried to address this issue. The other issue she raised is about fear of taking risk and asked whether the researcher considered the educational background since it matters in terms of thinking and the acquired knowledge and skills through education can encourage entrepreneurs to take calculated risks. For instance, the use of technology is also associated with kind of education the owner has and kind of confidence they have to promote their business. Mrs. Tigist further wanted to know how well the women business owners balance their family with their business activities because it needs much time to manage a business and develop products and services.

Mr. Mekonnen Zaga, who is owner and manager of Tweet Plc., wanted to know more on suitable

strategies for market penetration for new products which have been developed by the business firm? Because he didn’t see in the presentation points with regards to the penetration strategy which would be applied for new products. The other point is the product life cycle syndrome that will face the business firms. The product might be developed and all of a sudden it will diminish in terms of bringing more revenue, so how to avoid such problems with regard to product life cycle of new product. He further said that the promotional aspect of new products is important to its success in the market. Mr. Mekonnen suggested that the financial constraints that business firms may face with regards to venturing out new products and new services can be addressed through clustering services which can be market clustering or input clustering as a solution for the problems faced with regard to the raw material storage for the new product. The other point which needs to be addressed is the competitiveness of new products for long term sustainability.

Mr. Mekonnen finally said that problem of infrastructure has to be addressed in order to upgrade and promote tourist products and services. The infrastructure can facilitate accessibility, reliability and comfort of the services provided for tourists. He further emphasized that corporate social responsibility with regards to business firms who has been engaged in tourism sector is also adding value to the tourist products and services.

Feedback from the Researcher and Discussants:

Mrs. Assegedech, the researcher started explaining further the methodology and said that the companies included in the research were textile industry, garment, leather, especially small scale articles handicrafts, jewelry and some small scale enterprise that are engaged in food products preparation to assess the process of product development. Companies engaged in the service industry i.e. tourism industry, training and consultancy, cleaning and sanitary enterprises, enterprises engaged in event preparation and the legal advisory services were included in the interview. In addition she included some associations like the Ethiopian Women with Disability National Association in her

research. She further explained that there are many kinds of challenges facing both male and women entrepreneurs. There is a need to look for various kinds of interventions to mitigate and minimize the challenges. Although the type of interventions to address the challenges might be known in most cases their implementation is difficult.

Concerning ethical measures, during the interviews made there was no ethical problems that were mentioned as barriers women are facing in handling their export business but obviously if the worry is that ethics is included in the entrepreneurial development obviously it is an issue. She said that entrepreneurship activities can not be successful in the absence of ethical activities. However, during the research problems related with ethical issues were not mentioned as a barrier. The main reason was there was no woman engaged in exporting business who has been in any international court because of lack of ethics, there was no cheating and fraud cases mentioned. When it comes to the issue of gender it is not only an attitudinal change to solve the problem that women with disability are facing. There are other issues that were mentioned like the price level, price is more the determining factor for buyers.

In producing customized products, the barriers that were mentioned by those concerned were some customers, although they order and they want to take the product when they see the price they say it is too high because they didn’t take in to consideration the development cost. So the suggestion was if the entrepreneur is to minimize the price then the solution to identify areas to reduce cost and increase efficiency in raw material, in design, transport, etc. which will contribute to cost reduction.

Concerning the issues raised with the life cycle syndrome all products and entrepreneurship, much could have been said if time allowed since topics have to be addressed in separate trainings to grasp and implement the concept. If an entrepreneur is engaged in product development and service establishment, one of the points which need to be addressed is when to produce, for whom to produce, why to produce and how to produce. Its not when a product is phasing out that a new product has to be substituted. The substitution should be continuous. The question about product life cycle has to be addressed this way in order to keep customers.

Product development has to be accompanied by product promotion and there is need to allocate resources for it. Preparing product catalogues and participating in international trade fairs can be ways to promote new products provided that the financial resource is there. Clustering of services for raw material procurement and other services can be advantageous provided that companies are producing similar products.

Entrepreneurs who start to enter an international market have no option but to stand competition before entering in the market, a market research has to be conducted for both the domestic and international market. Questions like who are my competitors, what are they producing/offering, what are they producing both for the domestic and international market should be asked. Mrs. Asegedech said that issues related with educational level are addressed in the research. The educational level of the enterprise owners or operators was not much problem in conducting their entrepreneurial activities. She further said that it’s not a matter of high education or not it is a matter of getting the right entrepreneurship qualities and talents. But still entrepreneurship requires training, skill and knowledge obviously but it doesn’t mean that they have to be highly skilled, it is like any other business but it needs clear vision, well formulated strategies and business plans.

There are various ways to enter the market using various market entry strategies. Before starting formulating marketing strategies, analysis of the strengths, weaknesses, opportunities and threats which the enterprise can face needs to be analyzed. Then different kind of product strategies could be developed based on specific market. Instead of dispersing efforts into different markets, it will be advantageous to focus on to specific market. Then there is need to study the area where the enterprise plan to enter, and then try to identify what products they want, may be they want special product, completely original products. Some where it might only require modification of the existing product. It all depends on the result of the research and the pricing one can set for market entry strategy, another can set discriminatory price, the price that is set for this country or for this area and set another price for another place. Within the marketing strategy, there can be specific strategies for product, price promotion and distribution strategies.

In most cases enterprises are owned and managed by the same persons and some have staff in their management. Management of the business is a very important aspect of entrepreneurship. With good products and services if efficient management system is not in place, the business is subject to various challenges, even it may collapse. Entrepreneurs are risk takers but they take calculated risk. Mrs. Assegedech mentioned that one of the toughest difficult tasks of any entrepreneur is to take risk. The difference between the worker in an enterprise and the enterprise owner is that the entrepreneur is taking risks and in order to realize its vision is borrowing loans from banks which increase its risks. If

something happens on the business the worker can leave the job and be hired elsewhere but the owner can suffer if his /her business falls apart. If there is marketing problem, products are not being sold the owner takes the risk that’s why entrepreneurs are said to be risk takers but it is calculated risk.

Mrs. Samrawit mentioned that one of the bottlenecks in attracting tourists is the lack of accommodation, which is the main problem that the sector is facing. The ongoing road and other infrastructure constructions are encouraging and is paving the way to the development of the sector. It will be difficult to send tourists to areas where the condition of the road is very bad, the infrastructure problem is also reflected on the cost of the tourist services. The fact that Ethiopia has shortage in accommodation made it an expensive destination compared to other countries. This is one of the main areas where there is need to attract foreign and local investors.

Concerning international marketing problems faced by women entrepreneurs, Mrs. Samrawit said that she did not face such kind of problems and she said in fact when she is signing agreement with different international companies they will be very happy to reach agreement to business owned by women entrepreneurs because they consider them as service oriented. Mrs. Samrawit indicated that women are detail oriented which help them to be responsive to matters which are considered by some people as small but which can have big impact on business relations. On the other hand, due to the loose network that women entrepreneurs have in the local market, sometimes they face challenge in attracting market for their new products.

Mr. Jacques Dubois indicated that in general especially the craft sector is the most popular sector among different women entrepreneurs. What is very difficult is to compete with the external world, to compete especially with the Far East craft and other industrial products. Not only that the Far East products are flooding the market but it made also many women owned micro and small enterprises to be out of business. He mentioned the example of women who were engaged in pottery business and who were making traditional containers “Ensera” in no time they lost their business because it was substituted by imported jerry cans. These are some of the challenges that women entrepreneurs in craft businesses are facing.

As a concluding remark Mr. Dubois suggested adopting development models from India for the craft business, to enable women entrepreneurs penetrate the craft market by developing new products and arranging sales outlets. He mentioned some of the initiatives started in Ethiopia along these lines but he recommended that such kind of ventures could be efficiently run by the private sector.

Mr. Philip emphasized on the need to review the business plan daily, weekly, and monthly and different parts of the plan at different time, days, weeks, months and years. This will ensure the viability of the business and increase the confidence of banks in the enterprise. He further advised the women entrepreneurs to do market research and to even hire consultants for this purpose. He further explained that there are times when there is necessity to improve or change part or the whole of the business depending on the market situation and the business environment.

Concluding Remark

His Excellency Donald Yamamoto, Ambassador of the United Stated of America in Ethiopia

H.E. Ambassador Donald Yamamoto started his remark by stating that he is highly appreciating the efforts done by CAWEE to promote WEs. He further said that we are with difficult economic challenge, which is also an opportunity with the election of new President, to create a new paradigm how to do development change. H.E. indicated that he agrees with one of the panelists who was saying that we need to look in to ourselves our creativities and innovation. But also look at ourselves as

service provider and opportunities we can provide as well. The AmCham is just started and to really bolster the Chamber in Addis Ababa, Ethiopia and look

at other opportunity. H.E told the forum participants that the future really depends on them and he further said he and his team really want to be part of that future because they have the confidence that the participants will create a better tomorrow for their children and for the future of Ethiopia.

H.E the Ambassador further explained some of the progress made in providing funding to the banks of Ethiopia to provide guarantee fund to WEs. The guarantee fund made the banks to be much more accommodating and more risk takers to invest in women owned business enterprises. H.E explained that WEs are efficient in paying back their loans and they create jobs and it really helps to economic dynamism in the local areas.

H.E Ambassador Donald Yamamoto concluded his intervention by saying that there are many activities which have potential to create many jobs in this country and said that this is a dynamism that has been shown in Ethiopia.

The Executive Director of CAWEE, Mrs. Nigest Haile thanked H.E. Ato Kebede, H.E. Sile Maguire and H.E. Ambassador Donald Yamamoto for their presence and their encouraging remarks. She also thanked the participants, the discussants, the moderator and the researcher for their highly valuable contributions to the consultative forum. Finally she informed the participants in particular WEs to benefit from the USAID Loan Guarantee Fund, the AmCham in Ethiopia, “Connect Ethiopia”, “Exchange Belgium” and “Share-People” support programs which can directly contribute to the success of their businesses.

The Executive Director stated that, CAWEE will take all the responsibility in finalizing the proceedings of the forum and come out with a final document, which at the end of the project phase, a brief summary of the consultative forums findings, is expected to be produced in a booklet form. She further stressed that the recommendations by the researcher and the contributions of the forum participants will be further looked into so that practical interventions will be taken by the concerned stakeholders.

4.2 Study Findings

Topic: Barriers Faced by Women Entrepreneurs in Developing Products and Establishing

Services for Export Marketing

Assegedech Woldeleul has BA Degree in Economics and is studying for Masters in International Business. Currently she is working as Vice President for Research and Business Development at Admas University College. She has worked in various state and private owned organizations. Mainly she has worked in the field of marketing, planning, management, research and entrepreneurship development. She has also worked as Business Consultant and is a certified Management Consultant. Assegedech is a Private Trainer and Mentor for PACT (Program for building African Capacity for Trade) and ACCESS! Program.

She is also a certified trainer in Entrepreneurship and in Export Competitiveness at associate level. She is the author of the four books: Successful Packaging; Winning International Markets; Managing Prices and Power Promotion.

Executive summary

With the enhancement of technology, innovation of new products and services has become a necessity. In some instances, the life cycle of products and services can be extended by modifying the product benefits and or features. In all cases, the modification has to match market demand and has to go with the potential opportunities that exist in the environment. Thus, product development and service establishment for export market leads WEs in Ethiopia to succeed in business. Like any other business set up, new product/service development faces various barriers. Some of the challenges are faced at the initial stage and some during the implementation period.

Certain high barriers faced by Ethiopian WEs are mentioned below:

Skeptical about market potential;

Shortage of capital;

Lack of motivation to transform the ideas into actual products/services;

Fear of taking risk;

Not having focused training;

Lack of Technical resources.

However, the potential barriers should not keep WEs away from furthering development of new products and services for international markets. If we look at any successful business, we may discover that it took many years of ups and downs and hard work to position the products to the right international market places. The study that was undertaken to identify the “Barriers Faced by Women Entrepreneurs in Developing Products and Establishing Services for Export Marketing” suggests that:

WEs should do their share to minimize the barriers associated in developing new products and services targeting international markets;

It is also commendable for the relevant stalk holders to contribute to the goal of WEs.

1. Objectives of the Study The objectives of the study is

To identify the barriers associated with product development and service establishment targeting WEs engaged in export marketing.

To promote and share knowledge about product development and service establishment for export market.

To outline activities needed for further improvement and suggest strategies on overcoming the barriers that WEs face.

2. Methodology and Limitation

The methodology used is interview with some women entrepreneurs and few men about), other relevant individuals, enterprises and organizations such as MoTI, ECA, Export Promotion Department of MoTI, ECDD, EWDNA, Intellectual Property Right Authority, participative observation, review of secondary data especially from ILO studies and some of the previous experience and purpose designed evaluations of the researcher.

The composition of the interviewee was mainly from textile and garment, leather goods, home accessories, handcrafts, ornaments/jewellery, small articles made of leather and textile, and service industries like tourism, training and consultancy, sanitation, event organizing, legal service, cleaning/sanitation, BDS, etc. As far as the limitation is concerned, the subject matter of the survey focuses on international business. However, most service enterprises are potential exporters so the discussion has considered this reality.

3. Advantages of Product Development and Service Establishment

Before going into the details of product development and service establishment, defining what an entrepreneur is appropriate. An entrepreneur is a person who plans and starts up a business and accepts full responsibility.

Some of the advantages in developing products/services, which WEs can benefit and Ethiopia as a

nation can gain is stated below:

To take the advantage of being first to create that specific product or service;

To make the business sustainable by producing different product and service mixes. It is evident that doing business with only one type of product or service for a long time may not be sustainable unless it has a high bargaining power;

Creating various products and services to the economy generates jobs for many people;

By entering international markets, the business can be a source for bringing foreign currencies;

If women are engaged in entrepreneurial activities, they can be references to their children, as well to the new generation as productive citizens and as a result they can benefit their family and the society as a whole;

When new products are developed and new services are established the firm will have many different and new product/service mixes leading to profit maximization. But, keeping only the same products, could be risky because the enterprise may be forced to decrease price of the products that are phasing out of market which consequently can minimize the enterprises’ profit;

Entrepreneurship is a means of attracting investors and promoting Ethiopian brands. For instance the development of tourism could lead for the indirect promotion of Ethiopian brands as well as to national image enrichment.

4. Overview to Products and Services

Organizing and entering international business is different from managing a domestic business for various reasons, discussed below:

The business environment of foreign countries is much different than the environment of domestic markets;

Marketing problems are more serious when selling for international markets than for domestic business.

Entrepreneurship is the process of creating something of value by involving the necessary time, effort, finance and bearing risks in exchange to receiving the resulting rewards of

monetary and personal satisfaction.

Besides, when comparing consumer tastes, purchasing habits, buyers preferences, purchasing power, etc of domestic buyers with international buyers, there is tremendous differences;

There are trade policies of foreign markets, (both tariff and non tariff barriers) which may create difficulty for WEs to enter international markets;

International business requires foreign transactions. This situation creates problem both related to the banking process as well as the availability of the currency which does not happen in domestic business.

4.1 What is a Product?

A product is any want–satisfying for a consumer in exchange for money. A product benefits could be physical as well psychological. Nowadays, products are what the consumer wants and not what the enterprise wants. Existing products or product lines can be altered or modified. In this case, it is important to modify products as to fit buyers in foreign markets. This can be possible, if the enterprise makes products that are valued by international consumers in terms of quality, features, benefit, etc. As mentioned above, the firm should consider the price consumers are ready to pay for the product.

4.2 What is Service?

Services are intangible efforts that cannot be physically possessed. They have their own distinctiveness such as intangibility, perishability, inseparability of production and consumption, client-based relationships, and customer contact.

The first step to service establishment is, to make gap analysis in various services marketing industry at least in the vicinity areas. For instance, it can be services like training/education, health, home designs, information technology services in special programs, insurance, banking, transport, legal services, consulting services, etc.

Services to be provided for foreign markets can be classified in various ways. For instance:

For WEs being in Ethiopia and giving service to the service consumer of another country – for example tourism.

WEs exporting their services by putting their firm in another country. For instance, law firm, training and consultancy partnership, agent-ship, education and health services. Some organizations interviewed stated that, service business is more difficult to sell for international markets as compared to product marketing.

4.3 Product/Service Development New product and service development can not be done in a vacuum. The entrepreneur has to consider few issues that need to be clarified before or during the development process. Some of the areas of concern are:

What gap exists in the market;

Where the target market will be;

How to design the product;

What financial resources are needed;

Where to get the resources;

The availability of technology;

How to organize the work;

What promotional programs to apply, etc.

4.4 Design

This study focuses on design issue because many of the WEs interviewed and discussed with are striving to work on developing designs for international markets and also for domestic markets where they can exercise their skills. Designs have a big role in the overall development of new products. Some people underestimate the importance of designs in product development. This could be because they do not have the understanding about formation of designs and can not vividly see the role of designs.

Though selling for international markets is more challenging, nevertheless ones women

entrepreneurs enter foreign markets, it is rewarding.

The issue on design is important because if the product is not fit for reasons of poor design, buyers will automatically refuse to enter into agreement with the organization. Therefore, technical and market testing should be done continuously until the design of the product is accepted and the buyer is fully satisfied with the sample.

Framework for Formation of Designs up to Production Stage

In designing, the firm has to apply the technology that satisfies consumer needs, and it must design the product in a way as to manufacture it in a cost-effective manner.

Some WEs have natural talents for designing new products and some develop it through relevant and rigorous training.

Design Concept Development

Accessibility of Technology

(human capital, tools, machineries)

Market Potential

Availability of Raw Material Supply

Cost Effectiveness

User-friendliness

Transformation of Design to Production

5. Marketing Aspect of Product Development and Service Establishment for International Markets

For WEs engaged in international business, it is important that they consider the marketing issues seriously. It is through marketing intelligence and strategic plans that they can decide which foreign markets to enter, how to enter, how to compete effectively etc.

5.1 Products and Services versus Customers’ Needs

Marketing is a systematic way of structuring and coordination of market related activities. Regarding new product development for export market, be it in a vicinity or in a very far area, the product and the service have to consider the target group. The organization needs to aim at maintaining the relationship between suppliers, producers, customers and other stakeholders. With out close and good relationship with the concerned players in the business, success may be difficult. It is also the customers’ interest that the price of the product and service has to be fair and competitive. Besides, the deliver time is an important factor to customer satisfaction.

A new product and service will be meaningful if it satisfies customers’ needs. The product and service should also comply with customers’ interest in terms of their expectation in quality. To satisfy the needs of the seller and the customer, both of them have to meet somewhere to learn from each other and to negotiate proper compensation (money or service in return). The place where they meet is the market. As in product marketing, customers expect to get good and standard services. Since service is intangible customers can not test it before its delivery. In some cases, service is delivered face to face and in some cases the purchaser of the service may not need to appear. Since service is perishable, it is important that the service receiver gets it on time. WEs have to be competitive in their service quality because in most cases customers’ decision is based on the quality of service. As in product marketing, one of the means of upgrading service is by consulting the service consumers.

5.2 Product and Market Testing

Market testing is taking the product sample to market to know consumers’ view about the product. Consumers’ opinion of a newly developed product or service is crucial. A discussion with different and relevant consumers is a way of getting information and evaluating the new ideas in terms of its usage and benefit. Before going further to transforming the new idea to product, performing technical analysis would be important.

It is necessary to keep in mind that market testing is mostly done through sellers of similar products and potential buyers and wholesalers which imply that some people could see the product sample before it is displayed in the market place in large quantity. A product has to be tested for its technicality and send to market place for confirmation by potential consumers. In situations where the potential user has some comments, it requires more work to develop further or modify the products and services.

Market testing is the initial introduction of a product/service and its marketing program to conclude how consumers like or dislike the product/service and also to find out if it will generate the expected sales volume and profit objectives. A product/service concept when found suitable is developed into a prototype product/service where consumers can use them. However, test marketing ranges from a few months to several years. Depending on the type of product and service, the one that takes shorter period could be more efficient. The initial concept of market testing is to identify if the product/service has acceptance by the potential target group. Some studies indicate that, out of the many ideas considered, about 50 -60 % may pass market testing and common experiences mentions that again, out of the ones that pass the testing only 30-20 % of these may reach actual product and service development stage. For WEs to take the best advantage, it is recommendable that initially they base their new product/service development concept on market survey.

WEs who seek international markets have no option but scanning all aspects of marketing if they have to succeed in exporting their products and services.

Passing through the process of market testing, is a means of minimizing potential failure in marketing.

6. Barriers Faced by Women Entrepreneurs in Entering Export Markets

The challenges that WEs in Ethiopia encounter in product development and service establishment for export marketing are many. Some of the challenges are faced at the initial stage and some during the implementation period. Based on the findings, some challenges are obvious (e.g. those barriers that come as a result of not having enough capital and technology) and some are less obvious (e.g. those barriers that come as a result of sever competition.)

Schematic Presentation of the Barriers in Product Development and Service Establishment

a) Lack of Training The research result indicated that there is lack of appropriate training and skill. Product innovation requires relevant education and several years of experience in the field. Of the many training programs conducted for WEs, the survey indicated that there is short of training programs that focused on:

The basics of product development and service establishment;

Product and service development for international markets;

Marketing topics related to product and service development;

Handling international business versus domestic marketing;

The potential risks that would arise as a result of new product or service development;

The international business environment. Some training institutions that are engaged in providing trainings, capacity building to entrepreneurs; have limited facilities. Most of all, the content of the training lacks a wide range of subjects, such as product development concepts, marketing and financial aspects of entrepreneurship, etc.

Not Having Enough

Technical Resources

Lack of Protection

Lack of Focused

Training

Obstacles Related to

Customizing Products

Short of Data and

Information

Short of Conducting

Market Research

Shortage of

Capital/Finance

Hindrances Related to

Gender and Disability

Marketing the

Products/Services

Insufficient Raw

Material Supply

Fear of Bearing

Risk

Not Getting

Reward/Motivation

b) Lack of Conducting Market Research In general, developing new products and services require some form of marketing research. WEs lack conducting market research. Trying to create new products and services with out sufficient market research, may be a cause to some risks. Marketing research has a direct relationship with product development and service establishment, because the products and services are planned for the consumption of buyers or a certain target group. The survey also indicated that both manufacturing and service industries have constraints in conducting market research. In both product and service business, some of the main reasons for not conducting appropriate market research are:

Limited skill of potential researchers;

Obstacles in getting financial and other resources;

Lack of awareness of prospective entrepreneurs on the need of conducting market research;

Lack of having organized institutions to support entrepreneurs in research endeavors.

c) Fear of Taking Risk

Entrepreneurs get scared of taking marketing risks. They are doubtful on whether there will be international and domestic market for the new product/service or not. In general, they face uncertain demand conditions for their products/services in international markets. They know that serving international business differs from domestic business and that managing international business is more complex. The fact that the business environment of foreign countries differ from each other makes the potential risk of entrepreneurs to entering markets more difficult. As is obvious, developing new products require capital. Entrepreneurs have doubt whether it is economical to transform the idea to products and services. With this in mind, entrepreneurs do not want to take risk of using the scarce capital they have.

d) Lack of Information and Data

Some entrepreneurs do not collect the required data and check current and forecasted information related to both product and service development. As a consequence, they are doubtful about entering export markets especially those entrepreneurs who are not experienced in the business. Entrepreneurs understand that to enter export markets, they have to comply with regulations related to quality and standard, packaging, measurement, etc. Nevertheless, they lack to have the specific and correct data and information. Consequently, they doubt whether they can safely enter the market or not. The end result is that, they with hold from entering export business.

e) Raw Material Supply Problem

Some respondent expressed their view that they face supply problems in terms of getting the right specification, the right quantity and having it timely. WEs engaged in export business are not given any priority to get basic material supply that they require for new product development. Raw material suppliers sell in big quantity to agents and whole sellers. Enterprises operated by women find it to be difficult to purchase from retailers and agents because the price is higher. Besides, since some of their capacities are small, they do not have the required capital to purchase in big quantity. In most cases, they buy it from retailers at a higher price. If they have to buy in big quantity, they have space problem too. The respondents also mentioned that, if the accessories which they bought earlier from the suppliers is no more in their enterprise and go for purchase, the suppliers/retailers ask them for higher price because of the shortage of supply or any other reason. This becomes a cause for not finishing the same batch of products with the same accessories.

f) Problems Related to Marketing the Products and Services One of the main challenges that WEs face is that they lack markets for their products/services for various reasons. As understood, from some respondents/organizations who at the same time work with WEs expressed their view that some WEs do not comply with the required marketing concerns. Some of the constraints/shortcomings mentioned, related to marketing are:

Not appropriate brand naming of the product/service;

Wrong costing and pricing equation;

Not forwarding price timely;

Wrong decisions on the over all marketing-mixes such as the market entry approaches;

Unattractive packaging;

High production costs that make products uncompetitive in foreign markets.

The above problems result, in women enterprises not succeeding in marketing. In this relation, the survey result confirmed that WEs do not have the opportunity to learn/see how successful entrepreneurs manage their business and also that they are not much exposed to see how other markets operate.

As an example, the constraints related to providing service in consultancy and training can be mentioned:

Lack of domestic marketing experience;

Short of networking both among themselves and with other men colleagues;

Lack of track record and international references;

Lack of tailored consultancy jobs (some projects show stereo type outcomes);

Some institutions believe that only projects that are gender based should be done by women;

Lack of access to data and information about potential consultancy and other service activities at international level;

Lack of language proficiency of the target market to do international service related activities.

Referring to tourism industry, WEs come across problems such as:

Limited focus in promoting the industry as compared to other industrial/agro-industrial areas;

Lack of support from Ethiopian Embassies abroad;

g) Gender Issue and Disability as a Barrier

The constraints so far discussed are also relevant to the target group with disability. In addition, some specific draw backs that women and those with disability face is discussed below. In some instances, the issue of gender and disability is an obstacle especially in service areas. In general, there is a mis-conception that men can do the job more successfully than women. As a result the market prefers men than women. For a woman in general, to do some activities or work outside the country is a barrier by it self because of family commitment. The issue is more exaggerated when it comes to WEs with disabilities. Some of the common limitations are:

Limited net working with others;

Lack of aggressiveness as compared to men;

Some organizations in particular and the society in general, underestimate the capacities of the women with disability. As a consequence, consumers expect to buy the products prepared by the disabled women at a lower price;

In some instances, even the payment for the service is assumed to be less.

h) Lack of Capital/Finance

Lack of finance is a traditional issue for not developing products and services. Some entrepreneurs plan finance only for the development of the new product but fail to plan for further market introduction and for the general growth of the business. Because of shortage of capital, most of the premises and offices owned by WEs are made to be not of export standard. As is obvious, for business to be engaged in export market, it requires presentable office which in turn requires some budget.

i) Lack of Having Technical Resource Technical resource here is related in its total capability to convert ideas into tangible products. It refers to equipments, organizing production processes, maintenance, skill, etc. WEs face constraints in getting the required facilities mainly because of unavailability of technology and shortage of finance. Some products require the application of latest technologies which many enterprises can not afford. Technology is one of the prime factors in creating comparative advantage in the development of products for international markets.

Developing new products may require special tools, appropriate production processes, e-competence, timely maintenance program, etc. Technology has influence on the scale of operation and other factors of production and it also has impact on the raw material input. Particularly in the case of new product development, technology has a big role to play. For instance, it might even require shifting from old technology to modern one.

j) Lack of Appropriate Protection

One of the main challenges is that, some works of WEs are copied by competitors. It is important to get security in the creativity of ideas. During the interview, the issue of not being protected was much heard by WEs. In this connection it is worth to mention the existence of a Proclamation Number 123/1995. It was first legislated in 2005 by the Ethiopian Intellectual Property Office. In Ethiopia, there are some protection requests on shoes, soles, furniture, handbags, electric appliance designs, etc as noted in the Ethiopian Intellectual Property booklet. However, the research identified that the process is not as simple and less costly when compared to the potential income of the WEs engaged in export markets.

k) Constraints in Producing Customized Products

Developing customized products requires specialized tools and skills since it is different than the standard ones. It also requires raw material which is different than what the firm is using for the standard products. Consequently, the purchasing cost of the raw materials and accessories become high. WEs who mostly have financial constraints find it difficult to process such orders because it requires development costs at the initial stage. In some instances buyers are willing to pay the price of the customized product only after trying the product. Some buyers even change their mind of buying, after having ordered the product. This is a very critical problem encountered by WEs.

Entrepreneurs engaged in the manufacture of ‘customized products’ confront some limitations such as:

High risk ground in terms of design, color and size as compared to standard ones;

Price may be high because it is personalized item (willing to pay only after trial);

Customer may not be willing to pay before hand;

Some visitors who come from abroad buy ones and no repeat purchase comes latter on. Since the quantity they buy is also small, the benefit that the firm gets is not much.

l) Lack of Getting Reward.

There is no clear incentive policy as such for entrepreneurs who develop new ideas and transform them to products and services. This fact discourages the potential growth of products and services development. Other than that, some entrepreneurs may be ready to create new products and services with the hope and expectation that they may readily sell the products and as a result get good financial reward which is a motivational tool by it self. But most of them doubt whether it will result in financial reward or not because they are not sure of the value of the products and services. This issue is a serious stumbling block to many WEs.

7. Key Recommendations to Over Come the Barriers

Having identified the challenges, it is important to discuss the issues that could improve or minimize the difficulties. The lowering of barriers to making international business can enable WEs to view various international markets as potential locations for their products and services rather than a single country, as their market. From the survey, there is plenty of evidence that reducing of the constraints can facilitate product development and service establishment.

a) On the Issue of Trainings

The issue of lack of training has to be properly addressed. It is important for WEs to constantly learn new skills related to product development and service establishment. Besides, they need to up-date their organizational and marketing understanding and know-how. The employees of the enterprises also require trainings in order to build their capacity in doing better quality jobs and bringing higher productivity. Therefore, targeting training programs to WEs working in product or service development for international market is one key solution to the challenge. The trainings do not necessarily have to be formal and provided by lecturers but, it could be for WEs to educate them elves in various ways such as:

Reducing barriers to operating in international business enables women entrepreneurs to view the world markets and to facilitate globalization

Strengthening their knowledge in all aspects, for instance in the case of providing legal service the legal system of one country may differ from Ethiopia, thus, it becomes very difficult to do the job effectively unless the respective entrepreneur is well prepared and gets familiarized with the law of the respective country;

Updating oneself by referring to some knowledge based web sites in order to deal with product/service development in a more organized way;

Conducting experience sharing programs in various ways so that entrepreneurs can get experience from their colleagues.

b) On the Issue of Conducting Market Research Some points will be discussed on the way to handling the barrier related to conducting market research. In Ethiopia, where there is limited collaborative research agenda, it is important for Women Entrepreneurs Associations to set strategies on how to conduct researches through their association.

Besides, entrepreneurs engaged in product/service development can benefit from the researches conducted by various government research institutions, universities and public centers.

c) On the Issue of Taking Risks

One of the tough qualities of an entrepreneur is to bear calculated risks. Women entrepreneurs have to anticipate the potential risks that the industry can encounter. Failing to predict some risks and planning on how to handle them will put the business and their careers at risk. As far as the risk in marketing products and services is concerned, the issue can be lessened by surveying demand gap for the newly developed product or service for international market. In this aspect demand forecast should be made for at least for 3-4 years. To minimize both marketing and finance risks, the entrepreneur needs to see that the business is being organized and handled properly. A smart entrepreneur is one who also understands which markets to avoid for strategic and cost reasons. An entrepreneur who plans to decide to serve foreign markets must decide which markets to enter and work out the justifications. It must also prepare marketing strategy in terms of all the marketing mixes, costs, incentives, etc.

One very important measure to be taken to reduce some of the marketing and financial risks is to conduct ‘Market Testing’. The objectives of the market testing are to:

Survey the demand of the product;

Examine the contribution of the products and services to consumers need and society;

See the situation of competition in putting similar products or services;

Understand if the product has never been in the market and is new;

Learn customers problems, although sometimes it is more difficult to learn their problems by listening;

Perceive if customers appreciate the intended added benefit and usage;

Recognize what part of the product or service consumers would have liked a change or modification to be made;

Comprehend which features of the product potential consumers like in the product;

Understand what marketing mixes would be effective to apply; it may suggest various methods of pricing, promotion and distribution;

Be Familiar with the effectiveness of the products versus market.

If WEs fail to conduct market testing, then they will fail to understand whether the product/service has market or not and the decision to produce or not to produce is a way of avoiding much risk at the initial stage.

d) On the Issue of Data and Information

The issue related to lack of getting the required data and information can be adjusted by assigning one person who can collect appropriate data and information. After that, the data has to be analyzed in order to know global situation related to products and services marketing, quality requirements, current import

Seeking opportunities for profitable exporting requires conducting research systematically.

regulations, etc. With out having the required data and information, the enterprise may not be successful in export business.

In addition, entrepreneurs need to join professional associations, since one of the functions of the WEAs need to be to gather data and information. They also need to look into the various domestic and as well international trade information providing relevant web sites. Looking and analyzing certain trade journals and foreign business/trade laws could also minimize the barrier/restriction of not getting enough data and information.

e) On the Issue of Raw Materials Supply

WEs have shortage of capital and this impacts their purchasing power and thus can not buy in bulk. In minimizing the problem of raw material supply, there must be a way where they would be allowed to buy in a relatively smaller quantity. This may be possible through associations by way of getting preferential advantage to get the material supply as required. In regard to purchase of accessories, if the entrepreneurs would be allowed, to import accessories with a given preferential import taxes, that may be one solution to the problem.

f) On the Issue of Marketing

To satisfy the needs of the seller and the customer, both of them have to meet somewhere to learn from each other and to negotiate proper compensation (money or service in return). The place where they meet is the market. The target group could use different market entry strategies. The most preferable way could be direct selling which does not require much capital. Selling through representatives is also an option. Which market entry strategy to use should be based on study? WEs need to participate in trade fairs effectively. They have to prepare long before the trade fair opening date and must do their participation appropriately. Working towards getting current data and information about the business in general and the products and services in particular is an important aspect of marketing.

Entrepreneurs can develop their marketing capability by getting the required information timely and by being familiar with business issues like:

Demographic (gender, age vs. branding);

Socio cultural (class, belief, trend in fashion);

Market forecasts (trends) decline, phase out, increasing;

Consumers’ behavior and pattern of consumption;

Market size in every country;

Transaction systems;

Distribution practices;

Packaging, marking and labeling legislations (care labeling);

Indication of price;

Etc.

The last but not least recommendation related to marketing is to involve the commercial attaches of the respective Ethiopian Embassies abroad to assist WEs in various marketing activities, for instance, conducting marketing research on their behalf. It could also be by creating contact forum for WEs during their visit to foreign markets.

g) On the Issue of Gender and Disability

In addition to all the ones mentioned earlier, improvement to problems related to gender and disability may take time because the issue is connected with the society’s perception. Educating the society as a whole could be a means of improving the ‘bias issues.’ The other solution would be for women to build their capacity by educating themselves and networking with others.

It is important for the government as well as other concerned partners, to take the task of empowering women seriously in aspects such as:

Many of the pitfalls associated with marketing can be avoided if women entrepreneurs

focus on the fact that they can meet with the customer in the market if only their products and services can satisfy the potential buyer.

Educating the society to change their attitude;

Empowering women and particularly the disabled socially and economically;

Giving emphasis to gender and disability issues in policies and making focus to practical implementation;

Giving trainings to the society and other concerned ones to improve their attitude towards women as well as the disabled;

Exposing women in general and the disabled women in particular to different market situations in order to create new products and services, for instance, to let them participate and see the different products that are exposed in various trade fairs both national and international;

Encouraging and support the disabled to come up and work hard within their given capacity;

Etc

h) On the Issue of Capital/Finance

Reducing the constraint related to capital shortage may not be easy. One option is to get own fund moving.

In addition the following recommendations may help:

Sourcing from financial institutions;

Credit and saving associations;

Discovering source of support from donors;

Building confidence that the entrepreneur will return the money and hold her promise for further trust development;

Etc.

Getting the financial resource should not be the end. The entrepreneur has to put the money in good use and plan its appropriation carefully. In this aspect the responsibilities of the entrepreneur will be:

Plan the financial need appropriately;

Record costs separately;

Allocate capital for business separately from that of family;

Work out ‘cost minimization programs’;

In the event the money is a loan from bank or other sources, plan the repayment schedule.

i) On the Issue of Technology

Before recommending improvement schemes related to technology, it is important to state what is meant by technology in the context of this study. Technology implies a way of manufacturing products and/or establishing services. Current understanding of technology includes manufacturing process, organizational and information areas.

In situations where, entrepreneurs engaged in converting their ideas to products they lack technology. The following suggestions could overcome the constraint:

Bringing current technology from other countries;

Learning how the industrial countries modify or innovate products. This can be done by just referring to the imported goods which are introduced to the market, although this recommendation assumes that the improved technology has cost advantage.

When the technology is appropriate, productivity could be much improved boosting overall

output.

Planning financial resource should include not only for the development of the new products and

services but also for further entering international market as well for the growth and sustainability of the business

Nevertheless, in some instances the cost could be high in terms of technology fee, management fee, raw material fee (when one prefers to use imported one for trial purpose), and expenses for visits and stay of expatriates.

j) On the Issue of Protection

The study has examined few issues related to patent and copy right. To this end, the study will discuss few relevant issues that WEs can benefit from. Since patent and copyright are the means of securing particular ideas and facts, it is important to get patent rights. It is commendable that the right of WEs to construct, apply or sell new products be protected. Having protection is a means of encouraging WEs to deal with new industrial processes, new product development as well as service establishment. The study believes that discussing few concerns on Intellectual Property Rights (IPRs) could support women entrepreneurs who may ask for protection right. Since patent and copyright protection is the means of securing particular ideas and facts, it is important to get patent rights.

To this end, WEs need to have good knowledge on both domestic and international rules and regulations associated with the IPRs. To mention some of them:

Protection right can stay for about 20 years period of time;

In connection to international markets which is the concern of this study, international disputes are settled through the “Common Dispute Settlement Mechanism ‘of the WTO;

Property right is an exclusive privilege granted to enterprises to produce and sell goods and services and Ethiopian entrepreneurs can utilize it;

The Ethiopian guideline on IPRs states that the request for protection can not be made one year after the product’s deployment to market.

The suggestions will be for the IPRs authority to simplify the procedures for application and ensure the

protection of the requested products and services. Including reward systems as part of the protection structure and as part of the rule of the law of the matter would be important too. If an enabling environment is created, innovation could be much encouraged.

k) On the Issue of Product Customization The solution to the pitfall related to product customization can be discussed in various ways. The probability of improving the situation of producing customized products can be best done by setting few strategies, such as:

Proving to customers, that the customized products are differentiated from that offered by competitors;

Focusing on markets that prefer unique products. There are few segments of market who value purchasing made to fit products, and not every customer wants customized items;

Applying value added pricing approach in order to encourage buyers to be willing to pay more for it; producing customized products have effect in adding value and better usage to the customer.

To minimize the high risk of producing customized products as compared to standardized products, the entrepreneur has to look for more markets that can buy in big quantities because this will give the enterprise the opportunity to produce at large scaled economies. This scaled economy will allow the entrepreneur to minimize the operating costs and the promotional expenses.

Minimization of production cost will benefit the entrepreneur to diminish its expenses and the

buyer to take the opportunity to buy at a reduced price.

It is important that the products and services of women entrepreneurs get protection against any

unfair competition, both before and after going to market.

In the event that customers change their mind and are not willing to buy all the products ordered, the entrepreneur should look for other potential markets rather than just stop production because the staffs are already skilled on that product. Nevertheless, this is with the assumption there was agreement that the customized product is only for sale to the one who ordered it.

l) On the Issue of Reward

As far as getting reward is concerned, putting an incentive scheme program for entrepreneurs who create great ideas is commendable. One of the incentive schemes could be to give preferential treatment in paying income tax. Reduction of certain percentage of import taxes for technology importation to be applied to produce the goods and service is also another option. Another encouraging tool could be, subsidizing promotion for export marketing so that they can promote their products and services efficiently and get financial reward as a result.

8. Conclusion

With the enhancement of technology, innovation of new products and services has become a necessity. In some instances, the life cycle of products and services can be extended by modifying the products benefits and/or features. In all cases, the modification has to match market demand, and has to go with the potential opportunities that exist in the environment. WEs have to have vision. At the start their vision may not be clear, but as they focus on the idea, it becomes clearer from time to time. Like wise, it is also important to have goals and to define the goals in detail in terms of:

What is wanted to be accomplished;

What are the activities needed to accomplish the goal;

What product/service to develop;

Where the target market will be;

Who will be responsible for the various tasks;

What are the resources required;

How will the resources be obtained;

Etc.

When an entrepreneur plans to develop products and services, she should realize that it requires hard job and commitment to making the business successful. If we look at any successful business, we may discover that it took many years of training and hard work to position the products and services to the right international market places.

Women entrepreneurs should do their share to minimize the barriers in product/service development.

Other stalk holders should also follow up the recommendations with the objective of assisting WEs.

The success of WEs engaged in product and service development for export markets depends on factors such as having vision, goal setting, planning, conducting marketing research and risk

taking.

References

Ethiopian Women Entrepreneur going for Growth, ILO 2003.

Entrepreneurship and Small Business Management, Dr. C.B. Gupta and Dr. S.S. Khanks, N.D, 2000

More and Better Jobs for Women, Lin Lean, International Labor Organization

Support for Growth Oriented Women Entrepreneurs in Ethiopia, Lois Stevenson and Annette St-Onge, 2005.

Youth Employment Opportunities in Africa, ECA and ILO, 2009.

Women in Sustainable Industrial Development, UNIDO, 1997.

4.3 Recommendations

Developing marketing capability by studying- Consumers’ behavior, pattern of consumption, indication of price, etc; market size, transaction systems; in distribution/agents practice/effectiveness;

Develop a mechanism that will enable WEs become knowledgeable about international trade issues;

Upgrade the capability of mainly exporting companies to develop counter samples and products according to international buyers’ requirements;

Involving Ethiopian Embassies abroad and other international institutions to facilitate market matchmaking with international buyers;

Facilitate international Trade fair participation (appropriate planning, desk research, correct participation, follow up);

Strengthening professional and sector associations for data & information and experience sharing;

Support web sites and trade journals development and conducting market researches;

Develop and implement mechanism which will support WEs to get access to market research;

Develop capability for product development and marketing;

Planning finance not only for product/service development but also for entering markets and for continuous growth;

Develop websites, magazines and other promotional tools professionally and in an efficient manner;

Conducting survey/research on marketing, technology, finance, organization, staffing, management, production, competition, etc;

Facilitate market penetration by using twinning arrangement with development and business international organizations engaged in arranging business linkages;

Use international expertise and benchmarks to reduce production cost to become competitive in international markets.

Training

Develop training packages for product development and enable WEs participate in targeted training programs and encourage self learning (trade journals, web sites, foreign countries business practices, etc);

Organize continuous experience sharing forums.

Raw Material Supply

Lobbing through associations or other relevant organizations to buy/order raw materials in bulk to become cost efficient and ensure timely delivery.

Technology

Formulate frameworks and strategies to facilitate adaptation and transfer of technology from other countries;

Ensure strengthening university-industry linkage in product development and technology transfer;

Develop technology business incubators which will serve entrepreneurs engage in export business;

Facilitate access to technology database in an institutionalized manner;

Avail knowledge and financial facilities to acquire or adapt new technologies which will contribute to international competitiveness of companies.

Addressing Gender and Disability issues

Educating the society to improve attitude towards gender and disability;

Empowering women and particularly the disabled socially and economically;

Giving emphasis to gender and disability issues in policies and making focused implementations;

Exposing WEs, in particular the disabled to different market situations (to participate in national and international trade fairs);

Encouraging the disabled to come up & work hard within their capacity;

Develop promotional support programs by the relevant organizations

5. The Perspectives of Women Business Owners in Trade in Services

5.1. Forum Proceedings

The Fifth Consultative Forum on “The Perspectives of Women Business Owners in Trade in Services” was organized by CAWEE on May 26, 2009 at the Hilton Addis in Addis Ababa. The Consultative Forum had the participation of 375 participants (280 women and 95 men) representing stakeholders from policy makers, implementers, business associations, Chambers of Commerce, NGOs, academic institutions, consultants, researchers, women entrepreneurs, donors and other concerned development partners that promote the causes of women in business.

The Consultative Forum was inaugurated by the opening speech of Ambassador Halima Mohamed Director, Women’s Affairs & Affirmative Action Directorate General, Ministry of Foreign Affairs, represented by Mr. Temesgen Oumer. The keynote address was delivered by Ms. Maria Cruz, Head, Spanish Development Cooperation, Addis Ababa. The welcoming Speech was made by Mrs. Nigest Haile, Executive Director of CAWEE. The Consultative Forum received a wide coverage by the local press including TV, radio, newspapers and website.

Participants registering Participants attending the forum

Inaugural Session 26th May 2009 14:00- 15:00 hrs

Start of the consultative forum

• Mrs. Nahusenay Girma — Consultant, who is the moderator of the Consultative Forum welcomed the

distinguished guests and participants. • Mrs. Nigest Haile, Executive Director of CAWEE in her welcoming speech highlighted the main activity

areas of CAWEE since its establishment in June 2004. CAWEE mainly targets the promotion of Ethiopian WEs, with a special focus to women exporters. She further indicated that the mission of CAWEE is to promote Ethiopian WEs, with a special focus to women exporters, both existing and potential or emerging exporters. She further stated that CAWEE believes that “Empowering Women Economically is Key to Development”. CAWEE aims at creating a core group of businesswomen engaged in export activities. Accordingly, the vision of CAWEE will be to create globally competitive core WEs class in Ethiopia. In this respect, CAWEE works in the diverse sub-sectors of trade and industry where women are involved in. Beyond the provision of export focused business development services, that is – trainings in international trade, mentoring services, provision of web-based trade information, facilitating product development, market promotion and participation in international trade shows; CAWEE is highly involved in facilitating business contacts. In this respect, CAWEE closely works with the concerned ones that are operating within and outside the country.

The efforts of CAWEE, in the promotion of Ethiopian women in business, are complemented by different initiatives. One of the major initiatives, facilitated & supported by the US Embassy is the WEG which was established in July 2006, to address the constraints faced by growth-oriented WEs in Ethiopia. CAWEE is an active member of the WEG. WEG is in the process of getting registered as the OWIT, Addis Ababa Chapter. She said in further supporting the Ethiopian business community, the US Embassy has been working on the establishment of the AmCham in Ethiopia. The AmCham in Ethiopia, the third one in Sub-Saharan Africa, was officially launched here in Addis Ababa at the Sheraton Addis, January 12, 2009. It is expected that CAWEE will work closely with the AmCham in the future.

Mrs. Nigest, Executive Director CAWEE

Mrs. Nigest further highlighted on the access to finance scheme supported by the USAID guarantee fund, which started to be operational few months ago, through Abyssinia Bank, where the fund is allocated for both the local and the Diaspora WEs. So far, from the information that received from the coordinating office, as of May 05, 2009, for both the fund allocated for the local women and the Diaspora women, 17 women owned & managed Small & Medium Enterprises applied, 9 were processed and 2 were approved.

Continuing its efforts, CAWEE has organized this 5th consultative forum that focuses on the

thematic issue area – “The Perspectives of Women Business Owners in Trade in Services”. As the previous conducted forums, this forum also has come out with survey findings, which will be presented by the researcher. It is expected that this forum will propose opinions, workable recommendations and policy ideas for the way forward, for further actions and interventions.

Although often invisible to policy makers, services play a vital role in facilitating all aspects of economic activity. Professional services provide specialized expertise to increase firm’s competitiveness. Educational, health and recreational services influence the quality of labor available to firms. Infrastructural services, like transportation, communications, and financial services give the support necessary for any type of business.

In concluding her speech, Mrs. Nigest said based on the research findings that will be presented and the contributions from the discussants, the forum is expected to further discuss and propose opinions, workable recommendations and policy ideas for further actions and interventions.

Ms Maria Cruz, Head, Spanish Development Cooperation in Ethiopia

When starting her speech Ms Maria Cruz, Head, Spanish Development Cooperation in Ethiopia expressed here gladness. She continued her speech by addressing some of the issues from the last consultative forums. The forums for WEs were organized by the CAWEE supported by Spanish government thought Spanish-NEPAD fund. The 5 forums have gathered important expertise, personalities, entrepreneurs and have given concrete ideas and recommendations to address the challenges of women in business. As for the women business owners in service sector, all these forums have opened new prospects, minimize difficulties and increase professionalism, share and acknowledge different perspective and component of these challenges.

Further she said that she believes that this kind of forum contributes to the consultation and understanding of WEAs as a group putting their perspective on the development agenda. The path way will work and increase the active participation of the private sector in the economy working as a group and is creating networks and systems between Ethiopian and foreign entrepreneurs benefiting all partners. It is also a safer and moderate way to consolidate women empowerment as Ethiopian for Ethiopian development. The Spanish government is committed to gender equality and empowerment of women and is very proud to contribute to this industry. Ms. Maria Cruz congratulated CAWEE on its effort to fully support the development of women and for the success achieved in these forums as well as all participants that have contributed for the success of these forums. Finally she concluded her speech by wishing a very productive and successful meeting and thanked the participants for their efforts and participation.

Ambassador Halima Mohamed Director, Women’s Affairs & Affirmative Action Directorate General, Ministry of Foreign Affairs delivered her official opening speech through her representative. H.E. highlighted that the Government of Ethiopia has given great importance and special focus to promote women in different spheres of development, where the economic empowerment of Ethiopian women is given greater emphasis. Cognizant of the role of women in economic and social development of the country, the Government has crafted a policy that is focused on gender equality and women’s empowerment, a package on women development & change, along with micro and small scale enterprises development & urban development package, all of which envisioned providing financial credit. The Government of Ethiopia has also taken various measures to incorporate the economic empowerment of women in its PASDEP document as well as in the National Action Plan for Gender Equality.

Mr. Temesgen Oumer delivering the opening speech, representing H.E. Ambassador Halima

Finally Ambassador Halima indicated in her speech that it is expected from the participants of

this consultative forum to examine thoroughly the issues that are to be raised, and contribute their level best to the achievement of its objective, i.e., to contribute to policy ideas and opinions that bring out changes in the promotion of women owned businesses.

Technical Session -Topic: The Perspectives of Women Business Owners in Trade in Services

26 May 2009 15:00: -15:45 hrs

Moderator: Mrs. Nahusenay Girma

Presenter: Mrs. Tigist Lemma Rapporteur: Mr. Yared Fekade

Objective of the Study:

• Create a common understanding & provide a comprehensive map of the value based dynamics of trade in services operated by female businesses owners

Mrs. Tigist Lemma, presenting the study

1. The Study Coverage: Restricted to Addis Ababa Focused on Service Enterprises engaged in consultancy, health care, schools, training centres,

hotel and tourism. WEs with disability

2. Methodology • Primary data from purposefully sampled 93 (59 female and 34 male) individual business owners in

Addis Ababa • Data related to the individual business owner’s perspective and experience

– on own role in the business with their employees, customers, society & other similar businesses

– Through focus group discussion, the perspective of a group of business owners on the above (6 female and 4 male) was collected

3. Introduction

Trade in Services is Different from Trade in Products.

Intangible and transitory - Classical economists

Challenged by the inconsistency of definition - Neo classical economists

“Goods and services belong to different logical categories.” - Mill (1977) – Explained that producers can not accumulate a stock or inventory of services. – Services are consumed as they are produced – Necessitate the interaction of user and provider of the service.

Services have two categories – as outlined by Bhagwati (1984) – Some require the physical proximity of the user and the provider

Mobile provider and immobile user, e.g., shifting labor to the construction site in other country.

Mobile user and immobile provider, e.g., hospital services

Mobile user and mobile provider, e.g., lectures, haircuts, etc. – Others do not necessarily require this proximity.

Services that can be produced at a certain location but consumed elsewhere and at different time - Melvin (1987)

4. Role of Trade in Services

The service sector offers great opportunity of economic growth for developing countries. – Constitutes about 50% - 80% of the GDPs (ITC), – At least 20% of recorded world trade, – Is the majority of domestic activities in most economies, – Some analysts predict that by 2020, services will account for 50% of world trade,”

(Peter Walters, ITC).

Exports of commercial services went up by – 21.5% in Africa, – 19.3% in transition economies, – 16.3% in developed economies, – 14% in Asian developing economies between 2002 and 2003(IMF reports).

Few countries are taking advantage due to lack of awareness and readiness to use it as an export item by itself and increase its contribution to quality of products export.

Service Sector in Ethiopia

Estimated 1.2 million micro and 65,000 small enterprises

– out of which 42% were in service trade in 2003 CSA

Service sector is one of the major contributors to the GDP – share of the sector has been very stable, – It has generated stable growth, – Is promising for sustained growth if appropriate investments are made.

The Integral Model

Helps us to observe ourselves and the world around us in comprehensive and effective ways and is used in the research to:

– Map out the issues considering everything around us. – Give us a guided tour of our experiences. – Index activities and understand how they fit into the different consciousness

development levels/lines.

The appropriate application requires working with about 8 to 10 stages or levels of consciousness development

– This research does not include all but; • Stage 1 is derived by survival, • Stage 2 expands to shared relationship, values, interests, common ideals

and visions, • Stage 3 expands to all of us and goes beyond the borders of our

conventional thinking.

Limitations of the study

It is not comprehensive and representative of trade in services and provides preliminary information for further research,

Time for the interview was limited by business owners & insufficient to fill out the questionnaire,

Respondents collect the questionnaire and fill out

– 29 questionnaires could not be collected, – Few obtained contained insufficient information due to missed opportunity to

enquire and/or discuss with data collectors.

Research Results

Four quadrants in the integral model give the four “environments” or dimensions in which a product must survive, and the levels give the types of values of both producing and buying the product,

The four major theories of business management: – Individual behavior, – Psychological understanding, – Organizational culture, – Systems.

An integral model would necessarily include all four approaches,

This model is aligned with emotional intelligence with specific reference to self awareness, self management, social awareness and social management.

Preliminary Findings

No major and distinct perspectives along gender lines revealed - might indicate existence of strong shared values and norms in trade in services,

Female business owners can use their feminine character as a comparative advantage,

Mainstreaming gender in trade policies & agreements,

Generalizing the trade in services may not give the appropriate picture,

Improved emotional intelligence & leadership,

Some of the specific areas:

– Develop a management system – Trainings & technical support – Make services friendly to people with disabilities – Increase the use of available loan schemes – Network and/or association – Complement the current word of mouth by modern advertisement – Review labor law

Further research focused on the specific trade in services – Consider house keepers as one of those exporting services

Increased access to information

Discussants Interventions:

Ambassador Peter G. Robleh; Senior Regional Advisor, Africa Trade Policy Center (ATPC)

Ambassador Peter G. Robleh started his intervention by thanking CAWEE and the participants for the

opportunity he got to share his views. He said that they have such kinds of seminars in the United Nations and issues like mainstreaming gender in trade are addressed. In the ATPC they check policies by taking different scenarios and they conduct policy analysis, when a country is going to liberalize the trade with WTO or becomes a member country of WTO. Issues like what will be the impact of trade

liberalization on the society, particularly, on the poor, women in the rural area are addressed. Also on the continental stage when Africa is negotiating with EU, United States, it gives support for African trade policy negotiators by developing different scenarios. This is what the ATPC does. Recently they had a workshop on gender inception or mainstreaming training in gender policy and CAWEE was represent by Mrs. Nigest and he said that he is just reciprocating the good will gesture.

Coming to the research paper he said he likes the architecture of the paper, it is modest, in it’s scope and in its finding, has methodology as part of data collection and also on short comings and he gave a comment briefly by saying that his intention is not to restructure the paper in any way or to reinterpret the paper. In fact when we talk of trade and services it is a huge subject in the international trade. Some countries do not have the natural resource like agriculture but are making a windfall opportunity from international trade in services, Singapore is one of them. Hong Kong, Taiwan, and Japan are others, although Japan focuses on manufacturing goods. When you take trade in services even in Ethiopia, the researcher has found that it makes a significant contribution to the GDP comparable to the agriculture which is the main sector of the Ethiopian economy.

Ambassador Peter G. Robleh said that what he found interesting in the paper is the use of motivational analysis. Each society particularly when it comes to women has certain cultural context; even there are variations from country to country. In the Ethiopian context, there is a culture of leaning back, and most of the times men take the entire step forward and women tend to be submissive and humble. In other countries all these characteristics are there but in West Africa in some countries one can observe WEs are more vibrant in some instances they even call them the “Mama Benz” those who probably fill the seats of the Ethiopian Airlines when they travel from West Africa to Dubai, to Shangai. The dynamism that they have is highly amazing and their capacity in negotiating skill is remarkable. He said that he hopes the paper will bring up a little bit comparative study of Ethiopia versus its neighboring countries or some parts of Africa. He suggested that if the discussion on the cultural issues could have been conducted in Amharic/local language, he hoped that more ideas could have been suggested. He thinks that the most important element would be the way forward. Most of the time we find the trade and service fragmented, repetitive, redundant and also not very competitive therefore, he suggested that CAWEE organize in the future other researches which could bring out the volume of trade that could be harnessed through trade and service by bring us some determining steps. Most of those who are engaged in trade and services go in simply because they heard it from a friend, there is no feasibility study which guides the businesses. The other most important thing is one knowing her/his right. There are certain rights in the society, in the loyalty of the laws both in the internal and external markets. The external has to do with international labor laws, international credit facility and other regulatory issues.

Many institutions both in the north and in the south have tremendous confidence in the efficiency and strength of women investors and entrepreneurs. The legal and regulatory requirements for both international and internal/local market have to be clearly understood and also incorporated in the research document. The other point which needs focus is the right to access credit and only 21% of the interviewees know that they have the right to go to bank particularly Commercial Bank and request for loan against certain collateral.

The other import issue which needs to be considered is networking, it is very important for WEs to network among themselves and also with both international and local networks so that they can learn and create certain synergy. The other point which needs elaboration is participation in trade negotiations. In most of the time when trade is being negotiated, it might also have national dimension and decisions might need to be made through the legislation process and WEs have to be aware about national and international trade laws and policies. It is very delicate and very important.

Finally, Ambassador Peter G. Robleh concluded his intervention by emphasizing that WEs have to be part and parcel of the modern and growing sectors and not only focus on micro enterprise development. He hoped that the research work will be further enriched with the input from the panelists and the participants and he appreciated the work done by the consultant.

Ms. Yetnebersh Negussie, Program Manager for Economic Empowerment Ethiopian Center for Disability and Development.

Ms. Yetnebersh started her intervention by appreciating the research work, and said that she would like to extend her special gratitude to CAWEE and also to the Spanish NEPAD-fund through CAWEE for bringing up disability as trade issue other than charity issue. She further indicated that disability has been one of the forefront charity agendas to ask aid but not to develop trade which benefit disabled people. Ms. Yetnebersh apart from her current post as program manager, she is running her own school as a business. She reflected her views on some of the research findings. She appreciated the approach followed by the seven different levels in the research because most of the research tools were formulated to be disability friendly.

There are two major facts concerning disability. One is person with disability being business persons/women. The other is person with disability being a customer to business women with out disability. She further explained that trade is among one of the eight millennium development goals that are said to be achieved in 2015 but many women with disability are not involved in trade especially in the service trade. It is relatively better in trading goods because when a person buys for example a spoon from disabled women she/he is not buying what she produced, so nobody gives attention because she is only transferring the product through the transaction. But when one buys a service from person with disability, the customer gives much attention because, she is the one who makes the service available. But in the first case she didn't produce the product; it is made in China or elsewhere by a certain company. But in the case of service it is the women with disability who is involved in delivering the service, so it depends up on the gender and disability identity.

Ms. Yetnebersh explained further the challenge facing WEs with disability taking her own experience. When she started her school business some persons were amazed and they were asking her if it is for the "normal" ones, even her family they were really pessimistic and they say it is better if she establish boarding school for the blind in Addis. Her main aim is to be profitable and successful in running her school despite the numerous challenges she faces. After practically seeing the results, people will believe women with disability can be successful in conducting service business. To be involved in trade in service really is a process and it needs much effort because there is need to demonstrate capabilities and efficiency.

The other issue has to do with customers with disability. Most of the time people doing business don't think that customers with disability do have a power to purchase. For example when café, restaurants and some hotel businesses are established they do not give attention to accessibly to customers with disabilities. She emphasized that some think that disability is a reality for those who are already disabled but it is a possibly for every one. Businesses especially trade and service business has to be disability friendly because there are many customers with disability.

Ms. Yetnebersh concluded her intervention by pointing that in order to achieve the millennium development goals in relation to trade in services, disability issues have to be considered in a holistic manner.

Ms. Brouke Tefera; Researcher, Ethiopian Development Research Institute

Ms. Brouke Tefera started her intervention by appreciating Mrs. Tigist Lemma for her excellent research

work. Especially she appreciated her focus on WEs in the service trade. There is a tendency to describe Ethiopian economy as highly dependent on agriculture and most of the time the dynamism in the economic structure is not considered. Starting from 2004 the pattern is changing, the contribution of the service sector is growing according to the Ministry of Finance and Economic Development. Starting from the year 2004 the agriculture sector is growing by 11.6% the industry sector is growing by 10.3% while the service sector is growing by 12.5%. This shows that how the service sector is growing rapidly. In terms of employment according to National Labor survey which was conducted in 2004/2005 next to agriculture the major employer for the labor force is the service sector. When considering the structure of the country export, the agricultural sector is leading but some sectors like transport sector contribute a lot around 26.6% to the country’s export earnings.

In recent years there is development of MSE; this will require building the entrepreneurial

capacity of the business owners both female and male. The contribution of the MSEs can be in terms of GDP growth, export earning, employment generation and other economic benefits. This will be ensured through entrepreneurial capacity development. Ms. Brouke said when she explores the whole issues addressed in the research paper directly or indirectly, entrepreneurial capacity of the WEs is assessed and recommendations are forwarded.

The model used with the four quadrants clearly depicts the issue of entrepreneurial talents. For example the issue of individual behavior related with motivation and values is directly related with entrepreneurship. If a person had some motivation he exactly knows what she/he is doing in that business. In the research most women/men answered that they don't know about what their motivation is to start their business, this is related with their entrepreneurial talent. It means they lack entrepreneurial competency qualities. The psychological understanding quadrant raised questions like professional back ground, education and relationship with others. When it comes to relation with others every business has two customers one is internal, the other is external. Internal staff or employees are the internal customers of the business. If they are satisfied then the business will be successful. If they are not satisfied then the business might face problems even in the worst case failure. The external customers are buyers of business products and services and if they are satisfied then definitely success of the business is guaranteed. In the organizational quadrant social values are addressed. In most of the cases in previous years, the perception of the society concerning business creation was lower. Young people were encouraged to become only employees either in government offices or NGOs. Especially women were not encouraged to become entrepreneurs.

In the last quadrant different issues like legal frame work, information networkings are addressed. If a person needs to be a good entrepreneur, she/he should be equipped with information. There are many MFIs in Ethiopia but many entrepreneurs don’t have information on how to get financial services. To get benefit from this institution there should be information.

As a concluding remark, Ms. Brouke said that the whole issue of the research is about investigating whether WEs engaged in service businesses have entrepreneurial qualities and competencies. She emphasized that entrepreneurial capacity upgrading initiatives should be expanded to address the challenges that WEs in trade in services are facing.

Floor Interventions:

Mrs. Nahusenay. Girma, Owner and Manager of Optimal Consultancy and Marketing. Forum Moderator

Mrs. Nahusenay summarized the presentation and the interventions of the panelists by quoting one famous economist who said China’s, India’s and the Internet’s growth is driven by women. What are the challenges for business owners? When someone receives the service, why doesn’t she/he respond by giving feedback for the service provider? That’s another way of exercising our right as customers; she further underlined what Ambassador Peter G. Robleh said about the need to take control of our destination. Networking is one of the challenges facing WEs in business. Shortcomings in goal setting, lack of business plan, inefficient trainings for employees are the challenges which need to be addressed.

The moderator further highlighted on discussion point’s concerning the contribution of the Labor law, taxes and other policies. Only 21% of those included in the research are aware on how to address their capital requirement for their business, the issue has to be analyzed further. Is it because there is lack of networking or information? Or are WEs too busy with their day to day routine of their business? The reason might be of course in most cases businesses are owned and managed by the same person and this might lead to be fully engaged in the day to day operation of the business and there won’t be much time for strategic issues like networking, business planning and forecasting the future of the business by analyzing market trends. Mrs. Nahusenay encouraged the participants to raise further issues and also forward comments which will further enrich the research findings and pave the way for concrete interventions by relevant stakeholders.

A participant of the forum started his intervention by thanking and appreciating the researcher and the

work done. Then he raised issues related with the existing labor law requesting for some explanation on what has been said concerning the labor proclamation. What is the shortcoming Vis a Vis women entrepreneurship development? Does the labor law encourage WEs? Since the research needs to highlight on policy issues recommendations have to be included to propose improvement areas in the existing legal frameworks. He further emphasized that the challenges for Ethiopian WEs is not restricted to Ethiopian legal conditions or legal environment but it has also international dimension in terms of the forthcoming WTO accession of Ethiopia. What would be the perspective of Ethiopian WEs when joining WTO? Definitely the challenge will be a lot for Ethiopian entrepreneurs engaged in trade in services and manufacturing.

Ms. Saskia from Exchange Belgium thanked the researcher for the wonderful job which created a clear picture on the different fields and perspective of women engaged in trade in services. On the other hand there is need to give further detailed analysis on the problems women are facing. If the problems are well analyzed then it will pave the way towards solutions. From these solutions activities can be formulated and problem solving interventions will be realized. She indicated that the identification of the problems and the formulation of the solutions have to do with various stakeholders. Problems have to be identified at grass root level because every single business is different. Based on the model developed for the research purpose, every person has to recognize herself/himself in the various quadrants and start solving the problems occurring within his/her business. Concluding her intervention, Ms. Saskia requested the participants to start working together and sharing good practices.

Mr. Geremew Ayalew; Head of Foreign Trade Relation Department in the MoTI started his intervention

by appreciating the effort of CAWEE in organizing this forum to discuss the issue of trade in services. But he said that there is overlap with the schedule of WTO accession, Trade and service workshop which is taking place the same day although this was not done deliberately. Concerning WTO accession Ethiopia is now negotiating two important negotiations, international and multinational negotiation in parallel. One is accession to WTO and the other is negotiating with EU for Economic Partnership Agreement. Both negotiations took this important sector as a priority and there are challenges. The challenge of negotiating for trade input is less than the challenges for trade and services; this is very complicated, highly sophisticated. Mr. Geremew indicated that to strengthen the negotiation process, a National Development and Trade Policy Forum which we call NDTPF is organized and the EWEA is included in the Forum and CAWEE has already requested to be part of it. He further promised that he is going to forward his comment to enrich the research document.

Mrs. Desta Solomon; Consultant appreciated the extensive work done and the attempt made to link the

model to the actual reality. She asked if the research has addressed the different categories. She indicated that it’s very difficult to categorize the service sector, but which sector in the service are the driving sector for growth and where are the women in this sector?

Mrs. Aster Worku; Gender Program Coordinator, Henrich Boll Foundation, Ethiopia started by congratulating the presenter and said it was very comprehensive; the model adopted in the research facilitated to address the issues from different angles. She also appreciated the panelist, Ms. Yetnebersh for inspiring the forum participants and for comprehensively addressing the issue of disability. Then she asked if really it is right to conclude that the tour operation seems to be gender blind in creating job opportunity for women. She further indicated that especially when it comes to services related to tourism, women are considered as sex objects. She suggested that the first thing which needs to be done is the awareness creation to alleviate the wrong attitude towards women then involving and encouraging women in the tourism industry has to be given emphasis. She further asked explanation from Ambassador Peter G. Robleh on the attitude of Ethiopian WEs compared to other African WEs.

Feedback from the Researcher and Discussants:

Mrs. Tigist in her reply to the questions and comments indicated that she found out during her research that some of the laws including the Labor Law need some revision to serve better the business community. Concerning the identification of the challenges and problems by women in business she indicated that the prime objective in her research was to understand in detail the problems and

challenges and then recommending possible solutions. She further highlighted that there are issues which need further research in order to have clear picture. She emphasized that because of the above reason it will be premature to have concrete solutions and recommendations at this stage.

Regarding the driving sub-sector in the service sector, there is no comprehensive study made so far which can tell which sub-sector is the most important within the service sector. Mrs. Tigist clarified that she did not conclude that tour operation business is gender blind but she particularly explained that a specific position of tour guide is nearly always done by male tour guides. Definitely this is because of the stereo type thinking which considers women only as sex object, as a result women are not encouraged to deliver the service. Therefore there is need to have more awareness creation for women to be engaged in such businesses and also there is need to sensitize their male counterparts engaged the business and the society at large. There are many issues which need to be addressed to avoid the stereo typing in terms of mindset and traditional rules.

In his response Ambassador Peter G. Robleh emphasized that there is need to give the girl equal opportunity with the boys to infuse her with confidence and the comfort that comes with it and help in growing wholesome personality. These are some of the personality things confusing the culture. People in the society consider women, as incapable to learn the tricks of the trade. It’s not only the lectures and discussions that can change this situation; women have to be assertive to tackle the challenges. The shyness, the humbleness, it is there but this can not be alleviated by directly and aggressively attacking the issue through workshops, but through education and through giving the girls all the means to grow and realize to be a wholesome person should be focused.

Ms. Yetnebersh responding to the interventions said that she has never seriously considered the Labor Law from employer perspective with women point of view. It really needs somehow in depth looking for example in the case of sexual harassment the law favors the employee to claim because it is believed that employers have more of bargaining power but on the other hand being women employer there are issues of gender restrictions and there are also issues that may need preferential treatment in the labor law treating the women employer. The other legal aspect to be seen in this regard is the tax law which doesn’t designate such significant kind of incentive for women employers who overcame the cultural barriers of becoming entrepreneurs. There is also the social dimension of it for being women and having a disability; these are kinds of limitations and issues that require the laws to accommodate.

Floor Interventions:

Mr. Haylegnaw Eshete, Consultant said that he wants to complement what others have said. He appreciated the findings of the research and the presentation, it gives background information on the business of women in trade in services in the country. He further recommended that there is a need for a second round of study with a focus on very limited types of important question that will probably highlight in detail some of the problems women in trade are facing. The current study gives a broader picture of the problems and challenges.

The use of the integral model is complicated and instead it is better to do the analysis by cross matching the different recommendations and findings. The other comment forwarded by the participant is about capacity building because some people mentioned that Ethiopia is in the process of accession to WTO and in couple of years we might get the access for membership. The quality of the service will be the first agenda because it is kind of international type of competition if we are member of WTO at the moment we are able to trade our services internationally knowing that we are just way behind. Capacity building interventions have to be formulated to address the issues of WEs because most businesses in our country are performed by trial and error and are not based on research and actual risk assessment. Therefore the research study has to further come up with feasible and tangible recommendations to address the issue.

Mr. Birhanu Ejigu, Consultant said that most of the trade in services in Ethiopia are owned and run by women engaged in micro enterprises and asked if the perspective of these major players in trade in services is considered in the research.

A participant representing YWCA suggested that in future it will be advantageous for women in

business to organize similar kind of events in the local language mainly Amharic to communicate very well the research findings.

Feedback from the Researcher and Discussants: Mrs. Tigist replied that she is going to definitely take the comments into consideration in the finalization

of the research document as well as recommend areas for future research on focused areas of interventions. In regards to the “Gulet” or micro enterprise traders, she replied that they have been included in the survey.

Mrs. Nigest explained that concerning capacity building of WEs in service business targeting the accession to WTO has to be considered by the relevant institutions. She further briefed that CAWEE doesn’t have any tailor made training programs. She thinks that the WAD/MoTI is mainly responsible and she indicated that CAWEE is closely working with the Ministry. She also believes that the Ministry might have designed a training program that is targeting those areas. And as Mr. Geremew who had been contributing also mentioned that they are actively working on the issue of accession to WTO and they are targeting WEs to be part of the support and she expects that they might have training programs designed.

But since CAWEE is mainly targeting export market and the capacity building interventions are mainly focused in conducting trainings in international trade where there are specific modules for women in trade and services but still in English. She further mentioned that CAWEE is mainly targeting the export market and is assuming that women involved in export market can somehow communicate in English. That is why most of the programs are designed that way, but she thinks that the point should be taken and CAWEE has to customize, adopt and translate some of the documents into Amharic. This will facilitate the support to women entrepreneurs engaged in the informal sector. She indicated that this is not only CAWEE’s task but there are many other development partners engaged in the capacity building of women engaged in the informal sector. She mentioned that the MoTI is the core institution in this respect.

Mrs. Nahusenay, the moderator, complementing the interventions said that in order to be competitive in the world scene, we need to equip ourselves with every thing that is necessary, including language so it should not be an excuse. We need to be competitive. She said that we have difficulty maybe some times it could be shyness rather than the skills. She further emphasized in order to be competitive in the world scene, we have to take the responsibility and do some thing about our language ability.

Floor Interventions:

Mrs. Tsehay Assefa from Federal Civil Service Agency thanked the researcher for the real professional

work done. She further appreciated the principles of professional leadership particularly in relation to the quadrants. She suggested using a theoretical frame work to assess the role of leaders and role of managers in any sector in government or private sector in order to transform our country. The participant by referring to the research indicated that most of the business people seem to be content with the capacity that they have and also the education level they have reached and 70% of the business people are at the level of certificate and diploma and first degree level. She further emphasized that with the accession to WTO knowledge and information will play a key role. It is continuously changing environment and there is need for adaptation and updating especially in an agrarian economy like ours. It is disadvantageous when people are just content with whatever capital and knowledge they have, which is really hampering entrepreneurs from becoming competent in the world.

The participant tried to show the decision making process between men and women which in one way or the other an issue which affects success in the business. Decision making in the family affair is decided by women. The housing decision is also made by women. Therefore, women have to make quick decisions and they don’t have time and conducive environment to follow an informed decision making process. On the other hand men are near to information and can make informed decisions. Women don’t have time to balance every thing. Just simply they don’t have the time because they are working starting from morning to evening. Some women are not professionals, they are not assertive, they don’t have the opportunity to meet and network. Unless they understand what is being done in the business world both locally and internationally there is no way that we can look forward for women economic empowerment. If the local market in any other city or towns of the regions is assessed, it can be seen that small trading is done by women but there is gap when it comes to making decision on the money earned through trade, in many cases the husband has the decision

power. Sometimes the money is misused because the women don’t have exposure to concrete information which paves the way for the growth of their business. There is need to consider these group of women engaged in the informal sector businesses.

Ms. Birhane Daba, President EWDNA thanked CAWEE and Mrs. Nigest for being inclusive in the last organized consultative forums. This is a starting point for women with disabilities and very valuable points are raised by participants which will improve the situation of women with disabilities. She also appreciated Ms. Yetnebersh for creating awareness on the issue of disability in a structured manner.

Mrs. Rahel Mekuria, President YWCA said that she would like to get a clarification particularly on

exportable trade and services. What are the potentials for exportable services?

Mrs. Debre Melaku, President, Soroptimist International Addis Ababa Club indicated that access to loan

as mentioned in the research preliminary findings is essential for the success of women entrepreneurs. She asked if there is preferential access to loan to women entrepreneur and would like to know if there is facilitation by CAWEE for access to loan.

Ms. Metasebiya Feleke from USAID Vega Ethiopia program indicated that the Vega Ethiopia program

which Mrs. Nigest mentioned, encourage WEs who are really dedicated and interested to invest/ to work to benefit from the scheme.

Feedback from the Researcher and Discussants:

Mrs. Tigist responding to the issues raised said that she doesn’t think that there are specific criteria set to be good entrepreneur .But there are certain standards that have to be met for trade in services particularly exportable once. The issues at stake is how much effective WEs are in performing their own business and how much effectively are they delivering their services and how they see themselves and the rest of the world. She thinks that, like any other institution female business owners in trade and service particularly can also manage their institution efficiently and competitively.

Regarding her expectation, she said that she has never seen any specific study in this regard which tells about how women really see themselves as business person, as persons who deliver services in Ethiopia. She was open minded and didn’t take specific direction and she said she relied more on the outcome of the data.

Mrs. Tigist indicated that the issue of leadership and management is addressed in the research. But for the sake of presenting in limited period of time, she indicated that she reduced much of the information but she is going to enrich it more by taking more on leadership and management context.

Mrs. Nahusenay indicated that networking is very important and the research showed that various networks exist which can be efficiently utilized. One of these network platforms are the consultative forums, workshops and trainings organized by CAWEE. The forums create opportunity to know more people and get information.

Ms. Yetnebersh said that there is an Amharic saying which reveals the fact that most of the time people are not inclined to work together in businesses there is less cooperation. There is lack of initiative to overcome challenges in businesses by consolidating individual effort. There is lack of trust and confidence among people engaged in business. Most of them don’t stay out of their business by delegating their employees. As reality shows, the business owners want to do all themselves and always be at the centre of the day to day routine of the business. There is no commitment from the side of the business people to their network, to their associations because they are not giving them services which will support their businesses concretely. But there is a great potential of unity and networking among women rather than men which is exemplified by grass root associations. There is need to unleash these potentials to maximize the benefits of networking. Finally she said that her organization ECDD is organizing a guide book for tourists and other users to give information on institutions and services businesses which are accessible for people with disability.

Mrs. Nigest recalled the third forum which was focusing on challenges of WEs face in accessing finance and the issue of collateral was addressed boldly because in most cases women don’t own property mainly in their names and because of that they are not able to access finance. Beyond the access to

information there is need for preferential loan access to women. It might not be preferential lower interest rate but access to the loan so that they can have special windows. She said she can share the initiative of the CBE that has recently established a special window for WEs, helping them to come up with bankable projects. She said that she does not have updated information but she said it is worth mentioning. CAWEE together with US embassy and USAID has facilitated access to loan to WEs. Certain amount of money is set aside as a loan guarantee fund, and this was implemented through Abyssinia Bank. It mainly targets women in growth oriented businesses. This might not be right scheme for women operating in micro-enterprises but still it is an opportunity for women. The good thing about this program is that the USAID has assigned professionals in place to support the WEs produce bankable project documents. This is one of the initiatives CAWEE together with other partners is realizing to overcome the challenges of WEs in accessing finance.

Mrs. Tigist said that she adopted definitions of exportable services by various scholars. Service can be exported while we are here that is a mobile provider its service can be sold out to the mobile users. All foreigners who buy services in Ethiopia that is exporting services and when we are here also and providing services abroad for instance consultancy, e-commerce all these belong to exporting services and service for the local for domestic market implies those services that are particularly consumed by nationals. Another example is the case of house keepers in Ethiopia and we are sending house keepers abroad when they go abroad we are sending them out but they can also be house keepers in Ethiopia who are exporting their services because they work in the house of foreigners.

Mrs. Tigist in her final remarks said that there is need to understand the context in which particularly WEs are really working with emphasis to their own perspective. In the research survey both women engaged in informal business and WEs with higher education are included and in both cases there is lack of setting goals and plans for their businesses. Tigist emphasized that this is time to really see and think about the service that we are engaged in and we should also allocate time to ourselves to broaden the possibility to be an effective mother, good wife and good entrepreneur. She advised that for this purpose there is a need to get together and exchange our experience and knowledge, we should collaborate to bring change for the future to export service and also to change the whole paradigm of our economy. The service sector will mature and definitely become one of the major sectors that can contribute and provide stable growth to our country.

Ambassador Peter G. Robleh in his final remark said that there is much to learn mainly from the upstream which is the policy level but it’s always very good to assess concretely and see the impact of small issues. Soon as Ethiopia access in to WTO, it will be in a framework of 153 countries the environment will be tough, every country will come with its own questions; it is going to be quite a challenge. If entrepreneurs are not prepared for that challenge the little that they have would even be lost. He said that entrepreneurs have to be higher on the curve; they have to be trained constantly and also make use of some institution like the ECA, the ACGD and the ATPC.

The ATPC has numerous programs to mainstream gender in trade. Embassies must be at the forefront in this endeavor. Today Ambassadors are not the diplomats of yesterday who sits some where and talk, they are essential trader and negotiator, and they have the responsibility to give the fuel to the fire. There is only one actor in the world that is trade and if we want to play well then we have to know the tricks of the game and be prepared.

Ms. Yetnebersh in her final remark said that she has three core points to make. She stated that promotion is really important and she requested the business persons especially women business owners to cooperate with data collectors for the accessibility guide development. She said that concerning accessibility the entrepreneurs can get always advice on the accessibility issue because there are 7.5 million people with disability in Ethiopia and lets say each has 1 husband or wife, this can be around 15 million and those husband and wife do have their own family, and she emphasized that they are quite lots of customers in terms of numbers. She encouraged women with disabilities and she said that she does not want always to complain because in this world she knows that her disability is her opportunity. Therefore, she advised women with disability to use their challenges as their opportunities and join the business world rather than always talking about good donors. It is always good to think about who are good customers. She further said that rather than 1 birr given by charity, she appreciates 25 cents which comes from the work or business.

Finally she underlined that the WTO membership is really very important forum that we should think, it is Americans who made America the land of dreams, so it’s in our hands to make Ethiopia the land of dreams.

Ms. Brooke as her concluding remark said that the findings of the study gives good ground for further research. Most of the time the word entrepreneur and entrepreneurship is not well understood. Women in manufacturing and services or other business have to be equipped with entrepreneurial quality otherwise they cannot succeed in export, contribute to GDP and employment creation. Trainings are very important especially to equip women with entrepreneurial quality and competence. To be competitive a business women or men or who have entrepreneurial quality, skills and competence is required therefore attention has to be given to the issue.

Mrs. Nahusenay appreciated the efforts of CAWEE which she said will bring change and empowerment for WEs. Finally she concluded her moderation by stating the core message which came out from the discussion is: develop your self. Self development at any cost has to be at the center of our thinking without it, it is difficult to become very competent and competitive.

Concluding Remark

The Executive Director of CAWEE, Mrs. Nigest Haile thanked the participants, the discussants, the moderator and the researcher for their highly valuable contributions to the consultative forum. Finally, she informed the participants in particular WEs, to benefit from the USAID Loan Guarantee Fund, the AmCham in Ethiopia, “Connect Ethiopia”, “Exchange-Belgium” and “Share-People” schemes which can directly contribute to the success of their businesses.

The Executive Director stated that, CAWEE will take all the responsibility in finalizing the proceedings of the forum and come out with a final document, which at the upcoming wrap up forum, a brief summary of the consultative forums findings, is expected to be produced in a booklet form. She further stressed that the recommendations by the researcher and the contributions of the discussants and the forum participants will be further looked into so that practical interventions will be taken by the concerned stakeholders. Mrs. Nigest indicated that the wrap-up forum is planned to take place in September 2009, at the Hilton Addis, focusing on the book launch, where the opinions and recommendations of all the five consultative forums will be complied in a booklet.

5.2 Study Findings

Topic: The Perspectives of Women Business Owners in Trade in Services

Mrs.Teigist Lemma Dessalegn is a graduate of the Addis Ababa University in human resources economics and has over twenty years of extensive experience during which she progressively held various responsible and key positions in government, non-government, multi lateral and bilateral organizations and a professional association. She had developed valuable expertise in community development, community based institutions, research, mainstreaming gender and environment, trainings on leadership development, gender and project management.

Mrs. Teigist worked as an independent consultant. She currently is largely engaged in monitoring, evaluation, research and training programs of various organizations and is managing her private training research and advisory center.

Introduction

The main purpose of this study is to get a preliminary insight on how female business owners in trade in services perceive themselves in the whole business environment. The study attempts to answer questions such as how do women business owners think about their role in their businesses and in the business sector, how they manage their human resources and how they perceive their relationship with employees, how do they understand their customers and the business environment? It also attempts to identify if there is any valid gender gap in these respects. The implications of the findings are expected to serve as a basis for a more comprehensive study on women in trade in services in future.

This research has benefited from a primary data collected on purposefully sampled WEs, focus group discussion and in-depth interview. The findings are presented in seven major parts. The first and second part provides readers with background information followed by the methodology used for data collection and analysis. The third part presents some relevant literature on the role of trade in services to the national economies and section four presents the analytical part of the research classified based on the integral model adopted for data analysis. Finally the key findings are presented.

Background

Recent studies indicate that the service secotr offers great opportunity for economic growth of developing countries. According to the IMF reports, exports of commercial services went up by 21.5% in Africa, 19.3% in transition economies, 16.3% in develped economies and 14% in Asian developing economies between 2002 and 2003. The increasing contribution of trade in services has become one of the promising sources of economic growth. However, there are only few countries taking advantage of this opportunity due to their readines to use it as an export as well as increase quality of their products exports.

Most of the earlier policies of various governments tend to target on goods and were not able to consider domestic and foreign market oriented services as important economic factors that contribute to growth. Services were by and large considered as not tradable and this notion left out one of the essential components of trade that consitute about 50% - 80% of the GDPs13 of the developing countires. It seems that the current trend requires considering trade in services as one of the major contributing sector for national economies (for domestic and foreign markets) and this realisation is hoped to open new opportunity for policy makers and other relevant practitioners to provide appropriate platfom for the growth of the sector. Researchers and policy makers are getting better understanding of the importance of the trade in service for the whole economy, i.e., even for producing quality products and exporting them. Quality education, finance, logistics and telecommunication, social services (education, health, etc) and others make the commodity production sector competitive. According to ITC reports, services account for at least 20% of recorded world trade as well as the majority of domestic activiteis in most economies. Some analysts predict that by 2020, services will account for 50% of world trade,” (Peter Walters, ITC).

Trade in services has distinct features unlike trade in products. The intangible and invisible natures of services require analysis of factors affecting its efficiency for effective planning of policies, programs and interventions. In addition, most empirical literature suggests that it is important to review all possible elements of trade in services that influence the dynamics and pattern of changes of enterprises providing services. These influencing factors are: character of the entrepreneur (including sex), sector, location and age of the enterprise, as well as variety of meso and macro factors (Carl Liedholm & D.C. Mead, 1999). Moreover, contrary to products marketing, trade in services involve in direct interpersonal relationship among the buyer and seller. Buyers need to have good knowledge about the service, be convinced by its quality at the time of purchase and have confidence in the ability of the provider to meet the desired standard.

The objective of using this level of analysis is to get first hand information on how business owners think about their role in the society and look into what can be done in the future. A comparative analysis is also adopted to get an insight if there are any gender based variations in perspectives. According to Shake shaft (1993, p. 105), “The point of examining these differences is not to say one approach is right and one is wrong, but rather to help us understand that females and males may be coming from very different perspectives, and that unless we understand these differences, we are not likely to work well together”.

Women constitute very important parts of households and societies, as well as cultural and socio-economic environments that influence their actions as entrepreneurs. Earlier thinking emphasized that women who had achieved leadership positions were imitators of male characteristics, but contemporary theories recognize feminine leadership styles (Helgesen, 1990; Stanford et al., 1995) that needs to be well understood and used as valuable asset for enhancing effectiveness of businesses. By assessing the perspective of female in trade in services, therefore, this study is expected to shed light on how much the gender based variations affect leadership in service delivery. At the same time, not all WEs share same perspectives on their role in society and as business persons. Differences in age, levels of education, culture, religion, marital status and others may require further categorizations of WEs. These factors may also have significant bearings on determining the type of services, the process of initiating, developing quality services and potential for growth of enterprises operated by women.

Taking into account the diversity of the services as well as the complexity of characterizing them, this brief study attempts to shed light on the individual entrepreneurs and/or business owners’ perspectives and identify areas for future research. As described above, the study is expected to answer the questions: how do women business owners think about their role in their businesses, how do they perceive their relationship with employees, how do they understand their customers and business environment, is there any valid gender gap and the implications of the findings for a more comprehensive study on women in trade in services.

1 ITC 2002, Creating a Services Coalition: an East African Roadmap

Methodology

This research was conducted by collecting primary data from 93 individual business

owners (57 female and 34 male) in Addis Ababa. These respondents were contacted and information was gathered using structured questionnaire to obtain first hand information on their perspective about their commercial services and varying experiences. The issues considered in this questionnaire relate and are selected to help personal reflections and are categorized based on the Integral Model used as the main analytical tool, namely, self awareness, self management, social awareness and social management.

Accordingly, this study had considered the following levels of data collection: The individual business owner’s perspective and experience on own role in the business, The business owner’s perspective and experience with the employees, The business owner’s perspective and experience on customers and society, The business owner’s perspective on other similar business environment,

The perspective of a group of business owners on the above. The research method adopted purposeful sampling of 93 female and male business

owners in trade in services. In addition to this, a focus group discussion (with 10 business owners in trade in services with 7 female and 3 male participants) was held. The participants of the focus group discussion provided valuable information on selected issues that needed further elaboration. The sharing of the experiences and knowledge of the participants in the discussion had helped to deepen the researcher’s understanding.

As described in the preceding section, the selection of the types of businesses for this study was not made systematic as it was challenging to focus on certain categories of commercial services. The researcher took the liberty to include the most common types of services and consider ease of contact as one major criterion for the sampling. While the survey benefited from the response of all contacted female and male business owners, the interview with women consultants was found to be challenging as they were not able to dedicate a time for the interview; out of six contacted women consultants, only 2 responded. The table below shows the sampled trade in services for this study.

Type of service Sex

Total Percentage

Male Female Male Female

Care industry14 2 5 7 28.6 71.4

Consultancy 4 2 6 66.7 33.3

Health care 3 5 8 37.5 62.5

Hotel and tourism 4 7 11 36.4 63.6

Schools 1 4 5 20.0 80.0

Sale after value adding 5 6 11 45.5 54.5

Training centers 3 4 7 42.9 57.1

Trade 8 22 30 26.7 73.3

Trade (construction material) 4 4 8 50.0 50.0

Total 34 57 93 36.6 61.3

An Integral Model (of Ken Wilber) is also used to analyze and obtain an in-depth insight from the data. This model is selected because of its simplicity for analyzing complex problems that involve behavioral issues and its ability to capture the fundamental aspects for behavioral analysis. The methodologies adopted have helped a lot in analyzing the data further and make it complete. This study, therefore is prepared based on both the data collected through structured questionnaire and focus group discussion.

2 Care industry is category that include male and female hair styling salons, massage, etc

The Integral Model3

The integral model helps to observe ourselves and the world around us in a comprehensive and effective way. The model maps out the issues considering everything around us and as the term integral signifies lacking nothing, and gives us a guided tour of our experiences. It helps us to index activities and understand how they fit into the different development levels/lines referring to subjective realities in us, objective realities out there in the world, and collective or communal realities shared with others. As defined by the integral naked (2003), subjective realities refer to the states of our consciousness which in almost all languages referred to identifying the first person “I”, me or mine” in singular. This term is about self and self-expression, art and aesthetics, and the beauty that is in the eyes (or the “I”) of the beholder. The second person, “we, us, ours” in plural is sometimes referred as you/we,” or “they/we” as found necessary and relates to goodness, or the ways that we (that you and I) treat each other, and whether we do so with decency, honesty, and respect. The third person “he, she, her, they, them, it and its” refers to objective truth, which is best investigated by science. Simplification of these terms will give us “I,” “we,” and “it”. So the “I,” “we,” and “it” dimensions of experience really refer to: art, morals, and science the main point is that every event in the manifest world has all three of those dimensions. You can look at any event from the point of view of the “I” (or how I personally see and feel about the event); from the point of view of the “we” (how not just I but others see the event); and as an “it” (or the objective facts of the event). Thus, an integrally informed path will therefore take all of those dimensions into account.

The appropriate application of the Integral Model requires working with about 8 to 10 stages or levels of consciousness development which this research does not include all the specifics. However, it tries to use the few initial stages, wave, and level of moral development for explaining the existing situations. Therefore, stage 1 is derived by survival; stage 2 expands to shared relationship, values, interests, common ideals and visions. Stage 3 expands to all of us and goes beyond the borders of our conventional thinking.

40

Objective - Exterior

Individ

ual

Collective

Subjective - Interior

I

We

It(him/her)

It(them)

The above figure shows the “I” (the inside of the individual), the “it” (the outside of the

individual), the “we” (the inside of the collective), and the “its” (the outside of the collective). The four quadrants represent the four fundamental perspectives on any occasion (or the four basic ways of looking at anything); they are the inside and the outside of the individual and the collective (Integral Naked, 2003).

3 Summarized from Integral Naked, 2003-2004. http://www.integralnaked.org

The Upper-Left quadrant (the interior of the individual), captures issues of own immediate thoughts, feelings, sensations, and so all described in first-person terms. But if you look at your individual being from the outside, in the terms not of subjective awareness but objective reality, you find neurotransmitters, a limbic system, the neocortex, complex molecular structures, cells, organ systems, DNA, and so on. All described in third-person objective terms as “it” and “its” is about the thinking/mind. The Upper-Right quadrant is therefore what any event looks like from the outside and includes its physical behavior; its material components; its matter and energy; and its concrete body—all those are items that can be referred to in some sort of objective, third-person, or “it” fashion. These provide us two different views of the same occasion, namely you. The problems start when you try to deny or dismiss either of those perspectives. All four quadrants need to be included in any integral view.

The relationship continues as “I” is a member of numerous “we”s that represent not just individual but group (or collective) consciousness, not just subjective but inter subjective awareness—or culture in the broadest sense, the inside awareness of the group—its worldview, its shared values, shared feelings, and so forth. This is indicated in the Lower-Left quadrant. Likewise, every “we” has an exterior, or what it looks like from the outside, and this is the Lower-Right quadrant, the social dimension or the exterior forms and behaviors of the group, which are studied by third-person sciences such as systems theory. The quadrants are simply the inside and the outside of the individual and the collective, and the point is that all four quadrants need to be included if we want to be as integral as possible. The following figure shows the complete picture of Integral Model.

Interior Exterior

Ind

ivid

ual

I Intentions Self awareness Emotions Motivation values

IT Behavior Brain activity Tone of voice Action Observable choice

Co

llecti

ve

WE Culture Norms Group values Shared beliefs

ITS Society Written laws Allocation of resources Rituals

Limitations of the Study

The study is not comprehensive and representative of trade in services and need to be considered as mini research that provides preliminary information for further research.

The allocation of time for the interview by business owners was short to exhaustively fill out the questionnaire. Most respondents were pushing data collectors to cut the interview short and this might have compromised the quality of the data.

The inability of many respondents to allocate time for interview forced them to collect the questionnaire and fill out by themselves. As a result, 29 questionnaires could not be collected and the few that were obtained contained information that lack the appropriate information due to missed opportunity to enquire and/or discuss with data collectors.

Literature Review/Background

Classical economists defined services as products of labor that vanishes once the labor is performed and consider it as intangible and transitory. Neo classical economists, however, were also challenged by the inconsistency of the definition to what is so. After a while, Mill (1977) made distinction between goods and services by saying that “goods and services belong to different logical categories.” He explained that producers cannot accumulate a stock or inventory of services. Unlike goods that can be produced and then stored, services are consumed as they are produced which necessitate the interaction of user and provider of the service.

This conceptualization, however, was challenged by the subsequent researchers and Melvin (1987) explained the existence of services that can be produced at a certain location but consumed elsewhere and at different time. This implies that trade in services can take place either where it is produced or at product level in different location. This argument was also supported by Bhagwati (1984) who suggests that services have two categories where some require the physical proximity of the user and the provider while the other does not necessarily require this proximity. Services that require essential physical proximity have been further categorized into three groups:4

a) Mobile provider and immobile user, e.g., shifting labor to the construction site in other

country b) Mobile user and immobile provider, e.g., hospital services c) Mobile user and mobile provider, e.g., lectures, haircuts, etc.

This conceptualization has helped the adoption of the earlier definitions with a better

clarity of the intangibility and non-storability nature of services. Unlike goods that require physical transportation to be tradable, trade in services involves in a much complex medium of exchange that can be done through services embodiment on goods/objects, information flow or on persons. The intangibility nature and the diversity of its medium of exchange (including across borders) makes trade in services different from that of goods. With regard to the categorization, various institutions adopted their own categorization of services among which United Nations is one. The CPC of the UN had identified more than 600 service products and is used as reference for the identification of services under the GATT.5

Various studies indicate that the share of trade in services is increasing in the past few decades promising the existence of potential for growth, if used appropriately by developing economies.

“Testimony to this is the fact that services trade grew at the same rate as goods trade in the 1990s, i.e., about 6.5 per cent. In 2001, the value of goods trade fell by 4.5 per cent, while that of services trade declined by only half a percentage point. The value of services trade in 2001 was about 24 per cent of the value of merchandise trade.” Rashmi Banga, 2005.

The Service Sector in Ethiopia

According to African Economic Outlook (2005), Ethiopia has an estimated 1.2 million micro enterprises and 65,000 small enterprises out of which 42% are in service trade in 2003. The same report indicates that African countries have private sectors that have heterogeneous characteristics and have common feature of coexistence of very small with big entities. The service sector shares same features.

The increasing trend of the trade in services to contribute to the GDP entails the potential of the sector. As can be observed from the figure below, next to agriculture, the service sector is

4 http://www.bepress.com/gej/vol5/iss2/3; DOI: 10.2202/1524-5861.1068

5 Ibid. one of the major contributors to the GDP. The share of the sector has been very stable unlike the agriculture which is highly dependent on weather conditions. In addition, it is a sector that can generate stable growth if appropriate investments are made to it. The figure shows that the growth rate of the trade in service has been positive and reasonably stable in the last 10 years. This entails the promising nature of the trade in services for economic growth in Ethiopia.

Percentage Share to GDP at Constant Prices

-0.100.200.300.400.500.60

1995

/96

1996

/97

1997

/98

1998

/99

1999

/00

2000

/01

2001

/02

2002

/03

2003

/04

2004

/05

2005

/06

2006

/07

A. Agriculture B. IndustryC. Services - Distributive Services - Other Services

Source: National Bank of Ethiopia

The Service Sector

GDP by Major Industrial Classification

Growth rate in %

(20.0)

(10.0)

-

10.0

20.0

1996

/97

1997

/98

1998

/99

1999

/00

2000

/01

2001

/02

2002

/03

2003

/04

2004

/05

2005

/06

2006

/07

A. Agriculture B. Industry

C. Services - Distributive Services - Other Services

Source: National Bank of Ethiopia

Similar to other countries, however, the service sector faces a number of challenges

among which the societal values and norms are some of them. Various researches indicate that traditional values and norms have great influence on the entrepreneurial culture and this holds true for Ethiopia too. Leading modern business in trade in services, therefore, requires

understanding of these values and norms. In this research, an attempt is made to capture information regarding the perspective of individual female owners in trade in services on the whole business environment as a first step to inform future studies in the area.

Descriptive Analysis Based on the Integral Model

In the context of analyzing for profit organizations, the four quadrants in the integral model give the four “environments” or dimensions in which a product must survive, and the levels give the types of values that will be both producing and buying the product. The four major theories of business management: individual behavior; psychological understanding; organizational culture; and systems management, which emphasizes the social system and its governance can amply be represented in the four quadrants and that an integral model would necessarily include all four approaches. The application of Integral Model, therefore, is expected to increase clarity, care, and comprehensiveness to virtually any situation, making success much more likely in social change and excellence in business. This model can also be aligned with emotional intelligence with specific reference to self awareness, self management, social awareness and social management.

➤ Individual Behavior

The upper left quadrant “I” will be discussed under this topic and the subjective interior is captured from female business owners own immediate thoughts, feelings, motivations and values. Self motivation is considered to be one of the relevant ingredients in making privately owned businesses successful. Assessment of this is also expected to provide information on how they perceive themselves. The study attempts to consider vision/dream, having goals, attitude towards collaboration, desire for linking with others and others as the most common sources of motivation for business owners. Depending on cultural and societal norms, however, the factors that help business owners to start as well as to develop their business could vary.

The participants of the focus group discussion also indicated that they had visions of establishing their business to serve the society as well as to be a business person. Some of the businesses owners are also responding to social responsibility such as supporting people affected by HIV/AIDS, providing access to services to people who had challenges such as school for the disabled (accommodating diversity). Almost all of the focus group participants indicated that they had vision of setting up a trade in services that they are currently running. A lady who has a vision impairment indicated that she initially established a school where the disabled and able children could attend with a vision of providing access to private school to children with disability. Later on she said that she found herself in trade in services and indicated that disability will not limit an individual from being a business person.

The survey results also indicated that half of the contacted business owners had a vision to establish service in trade and had goals. However, most of the respondents were not able to spell out their specific goals in their trade in services; most give very general statements such as ‘my goal is to be successful’. About three quarter of the respondents feel confident that their businesses will be effectively running without any problem in the coming 5 years. This might indicate that they have confidence in the prevailing business environment.

The intentions of business owners in engaging in trade in services was also assessed by asking respondents if they had the desire and/or wish (early on) to establish the type of trade in services they are currently operating and only 36% indicated they were longing for it. This might be related to choices driven by ease of entry in to the market, values, norms, etc. The survey did not capture reasons of respondents in this regard and conducting further study is necessary to get deeper understanding. It will be very helpful to know what the female business owners feel about their businesses and its future in order to design an appropriate intervention for their growth.

From the focus group discussion and the survey results, it is understood that respondents involved in professional services such as school, training, consultancy, health care and care industry have the intention of developing their skills by engaging in trade in services. The focus

group participants indicated that some professions (legal service, health care, etc) are found to be more attractive for establishing businesses as they are helpful to advance their careers and benefit from good financial gains. Females in the consultancy service reflected that they do not feel that they are entrepreneurs and have fear of growth. They considered it as a safe corner which can also help them for survival. Unless personal commitments are elevated and with such high risk aversive behavior, the likelihood of having competitive and effective services for exports will be minimal.

Among the services captured by this study, the ones that people join due to lack alternative are hotel services and trade. Very often, customers are informally sharing their concern about weak/poor customer handling particularly in the catering and trade services. Probably, the owners and workers in this considered their engagement as the last option, and this might have compromised the quality of the service. The quality of these services is highly influenced by individual characteristics as they have direct interface with handling large number of customers. Unless business owners and workers engaged in these particular services had strong reasons and/or commitment, the likelihood of having low self motivation that compromise quality is high.

Listening is a natural phenomenon while the skill of listening is acquired. It is strongly believed that the ability of a person to listen in an appropriate manner will determine the perspective one has about herself and the rest of the outside world. In this study, listening to employees was considered as one of the relevant skills for running effective and efficient businesses. Respondents were asked about their listening skills and their ways of listening to their employees to obtain a preliminary understanding of how much aware business owners are about the skill. About 8.6 out of every 10 respondents believe that their listening skill is very good and only 1.4 out of 10 indicate their listening skill is average. While asked about their reason for good listening, 8.3 out of every 10 respondents indicated that they do it for the sake of delivering efficient services. This indicates that business owners are well aware about the importance of the skill in delivering their services.

The listening of business owners to their customers was also assessed and three fourth indicate they listen well and one fourth of the respondents explicitly indicate that they do not listen well to their customers. Out of 69 respondents who indicated that they often encounter arguments, 43% said that they had arguments with clients while 37%, 17% and 14% indicate they argued with their employees, business owners of similar services and their family members consecutively. One of the general observations regarding listening is that female business owners seem to have more arguments with clients followed by employees (less with business owners of similar service and family members) while male business owners seem to have arguments with

all. Although this research did not attempt to measure against any standard, the challenges in the listening is likely to make the working environment difficult for business owners. Improving the working environments through enhanced listening skill of business owners seem to be a relevant intervention. For a more concrete analysis and deepening our understanding further study will also be helpful.

The participants of the focus group discussion indicated that personality (individual behavior) matters a lot in setting up and managing trade in services. They indicated that a female need to have an outgoing characteristics, have good communication skill, vision and demonstrate efficient leadership to be successful in trade in services.

The survey results of this quadrant seem to provide relevant information on particular individual business owners’ behavior. Women business owners seem to lack clear understanding of their vision and goal, in addition to their low motivation to take risk. Feminine leadership styles are described in general terms as interpersonal-oriented, charismatic and democratic (Eagly and Johnson, 1990; Freeman and Varey, 1997) and related to gender because of stereotypes of women as being sensitive, warm, tactful and expressive (Olsson and Walker, 2003; Van Engen et al., 2001). They also seem to have arguments with lesser groups of people than their male counterparts and this might have to do with their gender. However, the likelihood of engaging in non conducive working environment due to inadequate skill in listening seems to feature in both male and female business owners in trade in services. To make more robust comparison along gender lines on individual behaviors an elaborate research is required.

➤ Psychological Understanding

The Upper Right quadrant “IT” captures the psychological understanding of the female business owners in trade in services. This area of the quadrant covers predominantly brain activity which includes thinking, physical behavior; its material components; its matter and energy; and its concrete body. Therefore, the reflection of the respondents in some aspects of their respective organizations is considered to observe their perspectives on the objective exterior. These include the experiences of respondents in having role models, their education, encouragement by others, relationship with employees and customers, planning, resources allocation, pricing, publicizing their businesses and others.

Education is expected to contribute to efficiency of businesses in addition to skills that can be developed through trainings and experiences. Respondents were asked about their level of education and their opinion about their own educational status to understand how they regard themselves in comparison to the external world. About three quarters of the respondents expressed that they are happy with the level of their education and believe that it is sufficient to run their businesses. The education level of respondents was found to be diverse with the majority (70%) attended certificate, diploma and first degree level education. Gender disparity based on education was observed at the first and second degree level where women account for only 32% while male account 43%.

Professional background was one of the major reasons for some of the female business owners to engage in trade in services. These are mainly in the legal advice, health care and consultancy. Participants of the focus group indicated that these services (in particular the legal advice and consultancy) are services that are managed reactively. These professions are marketable and implicitly might have motivated them to open their trade in services. They also felt that they are expected to perform and make decisions in the same and/or better way than their male counterparts and keeping it small helps ease of management and might be convenient. They also believed that their services are driven by the demand from the potential buyers and buyers determine the volume, price and location of the service provided. In addition, negotiation for contracts (new jobs), working in multi cultural setting and managing strategic conversations (diplomatic ways of managing deals) are also found to be difficult for the participants. Participants of the focus group discussion indicated that females in the sales area are believed to perform well and have more clients than their male counterparts. However, some (in the legal advice services) have also experienced that they are challenged by inadequate socialization (out of office hours) to meet potential clients and relevant people for their work. They agreed that stereotyping of

women as inadequate and/or not strong in negotiations is the major challenge to overcome the demand driven nature of their businesses.

About 61% of the respondents pointed out that they have role models. Among female business owners, only 58% of them were able to express that they have role models while it is 68% for their male counterparts. This might indicate that women have insufficient information and/or exposure to know successful business persons in the sector who can be their role models. When disaggregated by type of business, all business persons in consultancy and health care indicated that they had role models followed by those engaged in the care industry. The likelihood of business owners who have role models to be motivated is high and this is expected to contribute to the growth of their business compared to those who do not have role models.

Looking into the experience of female business owners, the study revealed only 14% of the respondents is engage in business due to their family experiences and the majority in this case is male business owners. The variation along gender lines (23% of male and 8% of female respondents) seems to confirm the traditional view of providing ample exposure to boys and male adults for experiencing in the family businesses compared to their female counterparts.

With regard to skill of running women owned businesses, a set of choices that capture issues of interior subjective were provided such as skills of convincing others, resolving problems/challenges, endurance, persistence, walk the talk, speaking after thinking and enquiry. The research revealed that out of the 89 respondents who expressed their strength in these skills. Out of these, 46%, 38% and 33% indicate that they have the skill of resolving problems/challenges, enquiring and face challenges respectively. Walking the talk, convincing others, endurance and speaking after listening were the skills least identified by the respondents (see table below). The table shows that more female has skill of resolving problems while lesser proportions have the skill in the other aspects and this seems to reflect what the personal perception of business women is in relation to their service provision and the external world. This is an important insight for understanding the factors that might have influenced the growth of businesses in services run by women.

A lady leading a team of experts on field work was initially commented that ‘female professionals in Addis Ababa do not want to travel in the rural areas’. After a while the team experienced blockage of road due to over flooded river and the team leader was expected to make quick decision. After having thought about the consequences of quitting and pursuing the trip, she informed the group that they need to cross and continue their work. No one was taking action unwilling to cross the river. She opted for setting an example and throw her shoes one by one across the river and walked through the over flooded river. Although it was risky she managed to cross and the rest followed. This time the comment was “you females are aggressive”. Her enquiry was as a female,

‘What do others expect from me and how are my achievements understood’

Four fifth of the respondents are engaged in management and supervision of their

respective businesses. Those who are involved in supervision only are about 14%; very small proportion. In another enquiry, about half of those who identified their management style indicate that they use delegation followed by supporting and control/supervision. Small proportion of the respondents also use coaching/training as a tool to manage their employees and services. Only 8% (5.1% belonging to female business owner) considered training of staff as one of their activities in their respective businesses. In another enquiry, 97% believed their employees are committed to their work. Female and male business owners seem to be focused on overall management, supplying stock, sales and customer handling, supervision and financial management. Liaison, training and research are the least regarded as business owners’ activity. Business owners seem to engage in routine and time consuming activities that can possibly be handled by employees. This trend will be non permissive for the growth (the size and quality) of services.

In another enquiry of triangulation, respondents were asked how long they can be away from their businesses with a view to assess how much comfortable are in the delegation. The survey results showed that only about two fifth of the respondents were able to express that their businesses can run effectively in their absence. However, about half of them expressed that they need to be in their businesses at all times in another enquiry. Only 15% of the respondents indicated that they can take leave of absence at all times from their businesses while the remaining can take some time (from 1-6 months leave) off from their respective businesses.

The other concern is that about four fifth of the respondents are satisfied with what they are doing. Respondents might not be yet aware about the need for more training and delegation of employees. In addition, it was learned that about two fifth of the respondents are content with their attachment to their businesses. The remaining three fifth indicated that they cannot do much as they believe the nature of their services require them to be around at all times. Both female and male respondents shared same perspectives in this.

If business owners are comfortable in their close attachment to their institutions, they use a management style that does not help employees to develop skills of managing and delivering the services to the desired standard and believe that their employees are competent; they are very likely to allow little/insufficient room for the competitiveness and/or growth of their respective businesses. Female and male business owners seem to share predominantly self employed rather than business person’s characteristics. The need for a more comprehensive study for obtaining further understanding about the working environments of individual businesses is very essential.

Respondents were asked how they express their care to their employees and the results indicated that female business owners (27% for female against 15% of male) seem to provide

financial support while male business owners (58% of male against 36% of female) focus on providing advice to their employees as an expression of their care. About four fifth of male and a quarter of female business owners indicated that they treat their customers with courtesy and efficiency. On the other hand, the participants of the focus group discussion indicated that their staffs feel much more comfortable to discuss with them apart from guards. A disabled business owner in trade in services also shares the same perspective. Women managing their employees friendly face little challenge of turnover of staff. However, they also noted the challenge of managing male employees and particularly guards who are not happy of being lead by women. They believe that women are engaged in business out of necessity; they take responsibility, take care of their relationships and are determined for success. These traits allow them to gain good respect from their employees, they indicated.

About two third of the respondents indicated that the factors that influence their business decisions are government procedures and market situation. The remaining respondents mentioned various issues among which policy issues, customers flow, opinion of customers, labor supply, family responsibility, agreement of spouse and social values are some that influence their business decisions. Male seem to consider family responsibility, market systems and social values in their business decisions. Because of the inclusion of various types of services, this study did not reveal exhaustive and clear picture of the major factors influencing business decisions in trade in services and this necessitates further study.

In the Upper-Right quadrant, the survey brought out issues that help us to understand how the interior of the business owners has been expressed in the objective world. It is also about their psychology too. As described above, business owners expressed they have limitation of their efficiency/energy/progress due to stereotyping. As their services involve high interpersonal relationship, they need to revisit their ways of handling others and their self regard in order to enhance the competitiveness of their businesses. Both the upper left and right quadrants indicate that women business owners need to work more on their own thinking to adopt improved ways of providing their services and making it competitive both in domestic and international markets.

➤ Organizational Culture

In terms of the integral model, the Lower Left quadrant “WE” is considered to reflect the subjective collective awareness and the shared values and shared feelings. Societal values are essential for creating enabling environment for all types of activities in an economy. The values that promote entrepreneurship are also relevant for individuals to be motivated for success and growth and innovation. This survey has attempted to capture the views of the women business owners in service on how they see others helping them to open and run their businesses.

As discussed above, the majority of the business owners are directly engaged in customer handling and this is expected to provide them the opportunity to know their customers well, although it has significant limitations too. The participants of the focus group indicated that some trade in services is preferred to be provided by female than male. The business owners of school, pharmacy and health care services indicated that most clients prefer to come and talk to the female staff. This might show that the society is respecting, trusting and/or prefer female in certain services due to their feminine qualities. And this may also entail that if more female are engage in such businesses, the potential for getting a large number of clients is very likely.

A disabled female business owner indicates that she was challenged to promote her value of equal access to schooling at the start of her business. Because she is disabled, her potential clients lose confidence thinking that they will not get the appropriate service out of their own fears in spite of their recognition of the availability of able staff in her school. Unlike the parents, however, the children in the school form a very cohesive and supportive environment, children taking care of disabled children. The clients of this school are both able and disabled children. Participants of the focus group discussion also indicated that they did not give adequate consideration for the needs of people with disability in their trade in services. The business owner with disability indicated that most business persons often forget that people with disability are their potential customers. The need for promoting value of equal access to all is very essential.

About 58% of the respondents indicated that they transmit their values of respect for work followed by initiative, taking responsibility, respecting others and empathy and kindness. Valuing/respecting work seems to be the most common value promoted by both men and women business owners while empathy and kindness was the least promoted as presented below. It is also worth to note that both male and female promote and/or transmit their shared values and feelings almost equally through their businesses.

Out of the 69 respondents who identified their means of transmitting their values to customers, about half of them (50% of male and 44% of female business owners) use clients’ visits as opportunity to inform their values and advertising is used by about 23% and 22% of male and female respondents respectively. Trade in service is well positioned to effectively use word of mouth advertisement that is cost effective. Although this study did not capture the frequency, content of the message and its delivery, business owners need to give more emphasis to use this opportunity to their best without compromising the use modern ways of advertisement to promote their services.

With regard to mutual support, respondents (about 40%) indicated that they received encouragements from others to start their businesses. The majority did not receive this and it might reflect that running business is yet not socially well accepted. Almost all contacted through the questionnaire and focus group discussion agree that customers’ opinions has a significant contribution in modifying, updating and changing their trade in services. About 86% of the respondents received valuable feedback from their respective customers. Only half of these

respondents indicate that they have used the feedback from customers to improve their services. Some members of the focus group discussions also indicated that they use questionnaire to collect feedback from their customers.

Collaboration has also been considered as one of the most important aspect in promoting trade in services. Three quarter of the respondents indicated that collaborative work is relevant out of which 36% and 33% indicated that it is important learning from others and improve the quality of services. About three fifth of respondents were able to share their knowledge to other business owners in similar trade in services. An average of 16% of the respondents indicated that they were engaged in providing voluntary services such as coordination/facilitation, providing information, contributing money and conducting income generating activities. Building on the existing collaborative efforts of female business owners in trade in services is relevant to contribute to the effectiveness of the service sector.

Female business owners seem to be contacting people with similar businesses more than their male counterparts. About 85% of female business owners make contacts through appointments while only 31% of their male counterparts use same method. The table below indicates that female respondents use much of the listed ways to contact business persons in trade in services. Although this does not indicate their ability to network, it shows that female business owners seem to have better social interaction.

One of the important aspects of owning a business is creating a social environment where employees and business owners build trust, enhance mutual support and understand each other well. Such environments require deliberate efforts made by the business owners. The survey, in this regard, captured questions about time spent with employees. About one third of the respondents indicated that they have socialization time with their staff out of which 63% expressed that they have their socialization in their respective office and 24% at the residence of the business owner. It is encouraging to observe such practices exist. However, there is a need to for business owners building trusting relationship with their employees the key to enhance the efficiency and growth of their businesses as the large majority does not seem to engage in this.

In this quadrant designated for organizational culture, the survey captured important findings that need further actions by individual business owners and those engaged in promoting the service trade in the country. The need for revisiting and promoting the organizational culture with a view to improving the working environment, efficiency and effectiveness of the business is key for nurturing their growth.

➤ Systems Management

This is represented by the Lower-Right quadrant “ITS” and focuses on social dimension which includes policies, laws and regulations, institutions, system and its governance. It captures the objective collective exterior that includes institutions, legal frameworks, infrastructure, management systems and others. As owners of private institutions, female business owners are expected to set their goals to reflect the objective collective exterior. Accordingly, half of them expressed that they want to be successful in terms of financial success. In addition, the large majority want to operate from where they are operating currently. Only 14% wish to open new branches and meet customers’ demand. The need for expansion for female business owners in trade in services seems to be distant.

Respondents seem to have weak networks with other people and institutions. Only 3 business owners indicated that they have a relationship with other institutions (school, ILO and Kebele) that can support them in improving their businesses. It is also learned that only one fifth of the trade in services (24% of male and 18% of female respondents) are members of institutions that can help them to publicize their businesses. Out of one quarter of respondents, only 7% expressed they are very active to their membership institution while 60% indicated they are somewhat active. The remaining 33% indicated they are not active at all. In addition, about less than one tenth of the respondents indicated that they have taken initiative to work and/or collaborate with others.

In addition, only two fifth of the respondents indicated that they have people to whom they can consult about their business. Once again, the large majority is trying to be by their own and may not adequately benefit from the knowledge, experience and technical backing of other people in the sector and outside the sector. Although more respondents seem to recognize the importance of collaboration and have relationship with other business (previous collective interior quadrant), their participation in networks and linkage for tangible outcome seems to be poor. This is an area that needs a serious consideration if the service sector has to grow competitive in the local and external market and contribute to the economy.

In connection to office set up, about 85% of the female business owners in trade in services used rented premises (about 12% renting from government). Their sources of capital for large majority are (93%) is their own sources; 62% use own capital and 31% from families. For about half of the respondents, the source of additional capital for their business expansion is also expected to be from own source while 14% indicated they can get from relatives. Only about one third of the respondents believed that they can access loan from the banks. In connection to this, participants were asked about their knowledge on access to loan from the banks for trade in services. Only 21% of the business owners have the knowledge that there is a bank loan scheme that is provided with an incentive package for women business owners.

At the organization level, an assessment was made on few aspects of the management system covering issues of planning, strategy designing, pricing and resource allocation. Planning is exercised by about 70% of the respondents and it is very often short term planning ranging between 6 months to 2 years. Long term planning has not been exercised by all respondents. Although many are expected to have strategies for operating their business, almost all indicated that they do not have clear strategy. With regard to pricing, most of the respondents impute their time in the service, the salary of the employees, other operational expense and consider the market prices. The least considered for pricing is the hospitality, advertisement and consumables costs. The need for assisting female business owners in clarifying their business objectives would add valuable skill for their foreseeable growth and development. They need technical support in terms of upgrading their skill of pricing, planning, strategizing, etc for their competitiveness. With respect to using legal framework, only one quarter of the respondents indicated that their employees are hired based on the labor law of Ethiopia. Challenges of the business owners in using the labor law need to be further assessed in order to help them create a safe working environment for effective and efficient service delivery.

As indicated in the previous sections, female business owners prefer to keep business small, not take risk and/or stay in the comfort zone, maintain ways of doing business and this once again assimilates weakly to the whole system, i.e., there is weak networking, poor utilization of

available opportunities (for example in accessing finance), weak organizational set up (goals, plans, strategies) and others. A more rigorous association of the factors included in this research would provide important insight to that reveals the perspectives of female business owners. However, considering the non representative nature of this mini research, it is vital to suggest further exhaustive researches that can help the design programs for encouraging, enhancing and building strong businesses in trade in services in the country.

Integral View

As described in the literature review, the integral view helps us to understand the factors

that influence the perspectives of women in service trade. Although not exhaustive, this study provides us with a bird’s eye view of the integral view on the perspective of the business owners in trade in services by including selected issues discussed in this research. The stages of the consciousness development, that specifically depict stage 1 as derived by survival, stage 2 as expand to shared relationship, values, interests, common ideals and visions and stage 3 extends to all of us and goes beyond the borders of our conventional thinking, can be used as reference to see where the levels might fit. This may provide more specific information about the perspectives in question. The model can also be aligned with emotional intelligence with specific reference to self awareness, self management, social awareness and social management as a different way of looking at what are already mentioned in the figures. A figure with guiding questions is presented after the integral views.

Sources: Wilber, Ken - A Brief History of Everything; Goleman, Daniel, et al - Primal Leadership

Who am I in my business?

Why do I do what I do?

Who do I pay attention to?

How can I get them to act?

Strengths and Empowering Views

Interior Exterior I

Have vision

Feel secure

Have respect for work

Am socially responsible (for some)

Am good listener

Am the boss

IT

Have role model

Have good education, can develop skill, career, get finance.

15% can leave business at all times

94% say employees are competent

97% say employees are committed

Employees listen because it is their job

Provide financial Support to employees

Have many customers

WE

Share values of respect for work, initiative, responsibility

Spouses influence business decision for male

Client visits used for sharing value & advertisement

86% received feedback from customers

Treat customers with courtesy

Collaboration is important: 36% for learning, 33% to improve quality of services

ITS

89% know sources of market

60% share experience to other institution

85% use rental premises

93% use own capital to start business

53% use own capita to expand

Government policy & procedures influences business decisions

Good policy environment.

Good taxation

Own premises, own capital (few)

Some of the Gaps to be Addressed

Interior Exterior I

Success is my vision

Provide service due to lack alternatives

Never thought of this business

Listening problem

o 43% argue with client

o 37% argue with employees

Am comfortable with current business

IT

Be present on business all times

No clear goal on business

Less female at higher education

Have no experience in bus.

62% cannot walk the talk

67% cannot endure challenge

Inadequate skill of resolving problems 54%

Be present in business at all times - 52%

WE

Low use of empathy and kindness

66% do not socialize with staff

63% socialize in offices only

Large majority not engaged in voluntary services

inadequate encouragement of others

ITS

30% Use bank loan to increase capital

21% know about bank incentive on loan

8%Took initiative to collaborate

25% employment based on labor law

20% member to associations

Majority have inadequate skill in planning, strategy, resource allocation

Key Findings

The findings of this research need to be considered preliminary as most of the issues require comprehensive research to come up with very conclusive issues. As indicated earlier in the text, the study did not reveal major distinct perspectives along gender lines on the majority of the issues considered for the analysis. This might indicate that there are strong shared values and norms of running trade in services and gender differences in terms of perspectives on business environments might be minimal. The following are some of the specific issues that can provide some insight for further actions as deemed necessary.

One of the major issues that need to be looked into in the future is mainstreaming gender in trade policies and agreements. In addition, female business owners can use their feminine character as a comparative advantage to promote their trade in services and in particularly for exports.

Generalizing the trade in services may not give the appropriate picture of the perspectives of business owners. Specific studies might give more information that will help understanding the business owner’s perspective on the whole system. More studies on specific types of trade in services will help the design of support programs to enhance the role of trade in the growth the economy. As more women and in the

caring services, the researches need also to consider the house keepers as one of those women exporting their services.

Business owners need to have adequate information about what is needed to be competitive in trade in services and particularly to export services. This will help them organize their status, design strategy for their growth that includes adoption of appropriate and/or modern personal/individual behavior, psychological understanding of their environment, organizational culture and organizational systems. Some of the measures they could consider could be the following:

It is necessary for business owners to start developing a management system that will allow them focus on developing and increasing the quality of their services in their respective institutions. Training of employees and delegation responsibility is very essential.

Business owners need to develop a perspective of providing their service with adequate emphasis on building trust and effective relationship with their employees and customers.

Making services friendly to people with disabilities is very crucial for all business.

Increased use of the available loan schemes. Establishing a network and/or association of trade in services will help to

access information, share experience, discuss on business environments, seek for capacity building support and also increase the standards of the services to higher levels.

The need for understanding the factors that induce minimal use of the labor law by business in trade in services need to be researched and appropriate measures taken to help both business owners and workers in the sector.

Complement the current word of mouth advertisement by modern advertisement to promote export of trade in services.

Find ways of creating appropriate and safe working environment for business owners and employees in trade in services.

Enhancing the leadership skill of business owners in trade in services is very essential to help them effectively develop their businesses. One way of achieving this is helping them to be emotionally intelligent.

References Banga, Rashmi, 2005. Trade in Service: A Review. Global Economy Journal, Vol. 5, Issue 2, Article 3, India Bhagwati, Jagdish, 1984. Splintering and Disembodiment of Services and Developing Nations in World-Economy. June 7(2): 133-43 Eagly, A. and Johnson, B.T., 1990, Gender and leadership style: a meta-analysis, Psychological Bulletin, Vol. 108 No. 2, pp. 233-56. EEA, 1999/2000. Annual Report on the Ethiopian Economy, the Ethiopian Economic Association, Vol. I 1999/2000, ed. by Befekadu Degafe and Berhanu Nega, Addis Ababa. EEA, 2000/2001. Second Annual Report on the Ethiopian Economy, Volume II 2000/2001. Befekadu Degefe, Berhanu Nega and Getahun Tafesse, Addis Ababa. EEA, Nov. 1997. Small-scale Enterprise Development in Ethiopia. Proceedings of the Sixth Annual Conference on the Ethiopian Economy., ed. Wolday Amha, GHR Chipande, Ansualem Tegegne, Addis Ababa. Freeman, S. and Varey, R., 1997. Women communicators in the workplace: natural born marketers?, Marketing Intelligence & Planning, Vol. 15 No. 7, pp. 318-24. Helgesen, S. (1990). The Female Advantage: Women’s Ways of Leadership. New York: Doubleday. Ireland Aid and ILO, 2003. Ethiopian Women Entrepreneurs: Going for Growth. ILO sub regional office, Addis Ababa and Ministry of Trade and Industry, Women’s Affairs Department, Geneva. ILO/STEP, 2001. Learning from Experience: A gendered approach to social protection for workers in informal sector, Frances Lund and Smita Srinivas, Geneva. ITC 2001. Trade in Services: An answer book for small and medium-sized exporters. Trade Secrets Series. ITC/Geneva ITC/CS, 2002 Business Guide to the General Agreement on Trade in Services, Revised edition, Geneva. ITC/UNCTAD/WTO, 2006. International Trade Forum. Why Services Matter. Special Edition: SISE 2006.Geneva. Melving, James R., 1987. Services: Dimensionality and Intermediation in Economic Analysis, Institute for Research in Public Policy Discussion Paper OECD/AfDB, 2005. African Economic Outlook, Paris. Olsson, S. and Walker, R. (2003). Through a gendered lens? Male and female executives’ representations of one another, Leadership & Organization Development Journal, Vol. 24 No. 7, pp. 387-96. Shakeshaft, C. (1993). Gender equity in schools, in Capper, C.A., ed. Educational Administration in a Pluralistic Society, State University of New York Press, Albany, NY, pp. 87-109. Stanford, J.H., Oates, B.R. and Flores, D. (1995). Women’s leadership styles: a heuristic analysis, Women in Management Review, Vol. 10 No. 2, pp. 9-16. Van Engen, M.L., Van der Leeden, R. and Willemsen, T.M. (2001). Gender, context and leadership styles: a field study, Journal of Occupational and Organizational Psychology, Vol. 74 No. 3, pp. 581-98. World Bank, 2001. Engendering Development: Through Gender Equality in Rights, Resources and Voice. The World Bank Policy Research Report, New York http://www.bepress.com/gej/vol5/iss2/3; DOI: 10.2202/1524-5861.1068 Integral Naked, (2003-2004. http://www.integralnaked.org

5.3 Recommendations

Trade capacity building programs have to be formulated and implemented to encourage the development of trade and services.

In order to achieve the Millennium Development Goals in relation to trade and services, gender and disability issues have to be considered in a holistic manner and by mainstreaming gender in trade policies & agreements.

Capacity building of WEs in service business in view of the accession to WTO has to be considered by the relevant institutions.

Improve emotional intelligence & leadership capability of WEs through practical experience sharing and trainings.

Develop mechanisms to regularly provide information on international and national legal frameworks to be engaged in trade in services.

It is very important for WEs to network among themselves and also with both international and local networks so that they can learn and create certain synergy.

Encourage WEs to engage in growth oriented businesses by availing various supports.

Make services friendly to people with disabilities.

Build the capacity of women entrepreneurs with disability to be engaged in trade in services.

Entrepreneurial capacity upgrading initiatives should be expanded to address the challenges that WEs are facing.

Capacity building interventions have to be formulated to address the issues of women entrepreneurs because most businesses in our country are performed by trial and error and are not based on research and actual risk assessment.

Further research and studies to analyze trade in services should be organized.

6. The Way Forward

CAWEE strongly believes that:” Empowering Women Economically is Key to Development”. Economic empowerment of women can not be realized without a synchronized and coordinated effort of various stakeholders.

6.1. Working with Partners

CAWEE provides capacity building services to women exporters engaged in

manufacturing and service sectors by providing trainings, mentoring, matchmaking and provision of web based trade information. The Centre is also involved in supporting companies in product development, market promotion, preparation of marketing materials and participation in international trade fairs. Neither CAWEE alone can address the multi faceted challenges faced by WEs as it was clearly articulated in the various consultative forums nor individual governmental institutions or non governmental institutions can address the challenges individually. There must be joint, organized and networked interventions to ensure the realization of women’s economic empowerment in Ethiopia.

Women have traditionally played an important role in the business sector, as owners, managers and workers. However, women are often unaware of the opportunities, and they typically face

several obstacles to take action. Women often lack the skills required for entrepreneurial ventures, have limited access to working premises, finance and other resources. Many programmes realized by various stakeholders attempt to upgrade the managerial, technical and marketing skills of WEs and try to address their needs in terms of working premises, finance and other resources. These efforts are bringing some results in empowering WEs economically. But the interventions by various stakeholders are not well coordinated and organized.

Consultative forums need to be further organized to bring closer all stakeholders and create strong networks. In addition strategies and mechanisms have to be in place to ensure complementarities between various stakeholders engaged in supporting WEs and avoid duplication of efforts. Although the support to WEs will significantly contribute to economically empower women, WEs themselves must be at the centre of all the interventions.

6.2. Entry Points

The series of consultative forums organized by CAWEE based on action oriented researches, have significantly contributed to the identification and articulation of the various interventions required to address the challenges faced by WEs. The interventions in terms to access to working and market premises, access to finance, upgrading the skills of WEs and creating networks among WEs are clearly identified and formulated as it is shown in the matrix at the beginning of this booklet.

The next step will be to further elaborate the identified interventions and formulate projects and programs which is expected to be implemented by various stakeholders. Following the consultative forums organized, some interventions have started to be realized. Among those, the initiative of establishing Women’s Bank, spear headed by prominent WEs and professional women, can be mentioned as an example. This initiative came to fruition after the consultative forums. CAWEE strongly believes that the initiatives will continue being realized and contribute to the economic empowerment of women.