Forum for South East European Women Entrepreneurs
Istanbul 21-22 September 2010
Financing Women Entrepreneurship: Lessons Learnt and
Innovative Practices
by
Siv Hellén, Advisor to the President, Nordic Investment Bank (NIB)
Outline of the presentation:
• Brief presentation of the Nordic Investment
Bank (NIB) and the Council of Europe
Development Bank (CEB)
• Description of the loan programmes for women
entrepreneurs
• Lessons learnt
• Conclusions and remarks
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NORDIC INVESTMENT BANK
enhancing competitiveness
& the environment
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Northern Europe’s multilateral bank
•
Nordic and Baltic countries
as shareholders
• Established in 1976 by the
Nordic countries
• Baltic countries joined in
2005
• Headquarters in Helsinki
Key figures 2009
• Balance sheet € 22.4 billion
• Loan portfolio € 13.8 billion
• Loans disbursed
€ 2.0 billion
• AAA credit rating
• Lending in member
countries and emerging
markets
Iceland
Norway
Finland
Sweden
Estonia
Latvia
Denmark
Lithuania
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Mission
NIB promotes sustainable growth
of its Member countries by providing
long-term complementary financing,
based on sound banking principles,
to projects that strengthen
competitiveness and enhance the
environment.
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NIB’s global reach
Framework agreements with 39 non - member countries
Current focus countries
Asia
China, India, Vietnam
South Africa, Turkey
Africa &
Middle East
Poland, Russia, Belarus, Ukraine
Europe
& Eurasia
Latin America
Brazil
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CEB -
COUNCIL OF EUROPE
DEVELOPMENT BANK
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CEB Overview
Institution
• Oldest pan-European supranational financial
institution
• Set up in 1956 to strengthen social cohesion
• 40 Member States - members of the Council of
Europe
Key figures 2009
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•
•
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Total assets: € 22.7 billion
Own funds: € 4.9 billion
Rating: AAA (Moody’s, S&P, Fitch Ratings)
Over € 30 billion in projects financed since inception
Outstanding loan portfolio: € 12.2 billion
Loans disbursed: € 1.8 billion
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CEB Overview
Borrowers
• Member States
• Local or regional authorities
• Financial Institutions
Activities
• Loans
• Guarantees
• Trust Accounts
Sectorial lines of action
• Strengthening social integration
• Managing the environment
• Supporting public infrastructure with a social
vocation
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Loan Programmes For Women Entrepreneurs
 The idea was born in 1999 at a conference in
Iceland
 Purpose: to support and increase women's
involvement in business and decision-making
processes in order to promote gender equality
 Projects carried out by SMEs or individuals in the
private sector
 Involve local financial intermediaries
 Priority given to projects creating new jobs and
projects located in rural areas and in regions with
high unemployment
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The programme objectives
Provide credits to SMEs (women entrepreneurs), for investment
and working capital
Total loan amount (CEB & NIB) € 10 million, extended by each
institution in 6 loans to 5 banks in Estonia, Latvia and Lithuania
Facilitate access to medium/long term commercial credits with
attractive interest rates for women entrepreneurs
Create and maintain jobs
Contribute to the promotion of welfare and equality in EstoniaLatvia-Lithuania through the development of women’s
entrepreneurship
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Loan Programmes For Women Entrepreneurs –
Amounts and targets
 The 1st loan programme was only € 1 million to
be divided equally by the three Baltic countries
 Followed by another loan programme, this time
together with CEB, in the total of € 10 million
 NIB later launched one loan programme in
Russia of 2 million euro, which was less
successful
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Loan Programmes for Women Entrepreneurs:
Structure of the Programmes
NIB and CEB
Loan Programme for Women Entrepreneurs
Loan Facilities to Intermediary Banks
Divided among Banks in Target Countries
Borrowers
Women (SMEs and Individuals in the Private Sector)
Siv Hellén
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Loan Programmes For Women Entrepreneurs:
Guidelines
 Requests for loans considered on a commercial
basis
 Emphasis put on the strategy of the borrower, the
competitiveness of the project idea and
environmental aspects
 Flexibility in expenditure to be financed
 Maximum tenor: five to seven years
 Interest rate charged by the financial intermediary
based on market terms for each borrower
individually
 Loans must be adequately secured
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Loan Programmes for Women Entrepreneurs :
SME Eligibility Criteria
maximum 100 employees
maximum 75 m€ net fixed assets and
maximum 33% held by a large corporation
Plus
owned or managed by women
or
clearly improving women’s opportunities in the
employment market
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Loan Programmes for Women Entrepreneurs: Total
Figures
Number of projects
ESTONIA
LATVIA
LITHUANIA
TOTAL
66
191
131
388
RUSSIA
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Jobs maintained*
New jobs*
562
1,346
1,614
3,522
88
363
383
834
* Estimated figures
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Baltic States
Loan Programmes for Women
Entrepreneurs:
Lessons learnt
NB: The CEB findings presented hereafter are adapted from the results of an ex post
evaluation carried out in 2007 on these programmes.
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Lessons learnt - Ex post evaluation
Overall a very positive outcome

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The programmes performed well and
efficiently
Served the businesses that were targeted
Good correspondence with CEB’s social
mandate
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Lessons learnt –Ex post evaluation
The programmes performed well and efficiently

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Objectives largely met
Very satisfactory institutional arrangements
Satisfactory sub-loan performance
Banks and women entrepreneurs satisfied with
management and conditions
Efficiency was satisfactory
 Programmes well documented
 Zero defaulting loans (June 2007)
 Schedule well-respected and lead times
acceptable, short even
 Satisfactory cost-efficiency and cost-control
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Lessons learnt - Ex post evaluation
The programmes served the businesses that
were targeted
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Great variety of sectors, often services
Half or more were micro-enterprises
Rural focus well-respected
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Lessons learnt- Ex post evaluation –
Great variety of companies
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Lessons Learnt – Ex post evaluation
Rural focus well respected
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Lessons learnt- Ex post evaluation
In line with CEB’s social mandate
The programme's target represents a specific
niche combining…
A commercial aspect
 Credit to companies at market terms
A social aspect
 Specific disadvantaged group, namely
women entrepreneurs
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Lessons learnt- Ex post evaluation
Relevance was not perfect
 Objectives and eligibility criteria OK
 The label « women entrepreneurs » does lower barrier-to-entry
for women
 Rural area focus gives a chance to entrepreneurs with less
collateral
 Start-up finance responded to need
 But
 Relevance of job creation objective rapidly eroded at the time
 Baltic States: narrow gender gap in entrepreneurship
- Other CEE countries probably more relevant
 Additionality?
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Lessons learnt-Ex post evaluation
Differentiating types of impact
 Internationally operating production companies
 Investments in machines, increasing productivity,
efficiency, competitiveness
- E.g. Siauliai textile manufacturers
 Nationally operating companies
 Investment to allow national expansion
- E.g. opening shop in other town
 Locally operating companies
 Increase local client base by increasing attractiveness or
capacity
- E.g. refurbishment/extension beauty salon; new car lift in repair
shop; fitness apparatus…
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Lessons learnt – Ex post evaluation
Sustainability
 Women entrepreneurs seem to have become
more mainstream clients
 Financed companies are healthy
 But experience lack of skilled labour
 Companies improved their ability to raise
money
 Influence of credit squeeze and overheating?
 Government support, trust funds?
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Lessons learnt - General Assumptions:
Women's Point Of View
Women set up their companies, still with own capital
Women have equal opportunities to access credit
Women need more encouragement and support
Women want role models
Women need more information on credit possibilities
Women are more careful and take less risks than men
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Lessons learnt - Experience Gained
 Women feel that credits for SMEs are in general too
expensive
 Women positively surprised by friendly and helpful
attitude at banks
 Women found it positive that the loans were
exclusively for them
 Choosing the right local bank is essential
 Government support was considered to be
important
 Majority of women entrepreneurs will ask the banks
for additional financing in the future
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Lessons learnt - Experience Gained:
Banks' Point Of View
 Difficult to combine profitability and small credits
 No experience in addressing women’s particular
concerns
 Challenge: Banks should not give advice on how to
prepare business plans
 Business plans prepared by external consultants often
not of good quality
 Women in rural areas with start-up projects difficult to
reach
 Loan applicants did not have sufficient collateral
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Conclusion and remarks - Have Micro Loans
Reached Their Goal?
NIB's and CEB's programmes have raised several
questions:
 Why offer special credits for women
entrepreneurs?
 Are special loans for women entrepreneurs in
line with gender equality?
 What is innovative in NIB's and CEB's
programme?
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Conclusions and remarks - Why offer special
credits for Women entrepreneurs ?
 Women like to be target clients
 Women do not need generally better terms and
conditions
 Women need good advice in preparing business
plans
 Women need information about credit possibilities
 Women as an untapped resource have become a
new target group for the banks
 Loans for women have taught the banks to simplify
their procedures and to understand women's special
needs
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Conclusions and remarks Are loans in line with
gender equality ?
Yes because:
 Loans sparked discussion of women's issues
and gender equality
 Credits were not created to distort competition
and they did not contain any real subsidy
 Women got increased access to credit
 Women as an untapped resource have become
a new target group for the banks
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Conclusions and remarks - What was innovative
with the loans ?
In fact not so much – back to basics
A few observations:
 Banking in transition countries still very male -dominated,
both clientele and loan officers
 Important to choose the right local intermediaries, e.g. banks
with experience in SME-financing
 Collateral support is needed especially in rural areas and for
start-up projects
 Quick and efficient/expedient loan processing essential
 Advisable to enhance programmes with trust funds
 Loans for women have taught the banks to simplify their
procedures and to understand women's special needs
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Conclusions and remarks - Key Points:
Be Smart
• S - Simplify
• M - Market
• A - Adapt
• R - Respond
• T -Train
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