Addressing Barriers to Accessing Trade Finance by Women-owned Businesses in the Pacific Islands

Women-owned micro-, small and medium-sized enterprises (MSMEs) and women entrepreneurs play an important role in eliminating gender disparities by promoting women’s employment, and in driving economic growth and development. However, the geographical remoteness, small size and often narrow economic bases of Pacific island countries present unique challenges that prevent women-owned MSME from achieving their potential to reach wider global markets and engage in cross-border international trade.

The barriers that women face include:

• insufficient access to market information and business skills
• lack of representation
• limited access to finance
• socio-cultural norms.

Despite these barriers, women proprietors with low-revenue businesses and few employees are reported to be most prominent among Pacific MSMEs that have recently begun engaging in international trade. Raising the level of participation by women in the labour force across the Pacific could provide a major boost to the region’s economic growth – but only if governments, policy-makers and the private sector implement policies that promote women’s entrepreneurship and employment.

This briefing paper reviews the evidence on the non-tariff barriers to participating in global trade that are faced by women entrepreneurs in Commonwealth countries in the Pacific. If focuses on the financial and regulatory environments in which women-owned MSMEs operate, and on two countries in particular.

• Fiji, which may be losing almost 20 per cent of its GDP because of a persistent gender imbalance in economic activities. While the country's legal frameworks aim to support gender equality, socio-cultural norms hinder women’s decision-making power. Women account for a small percentage of registered MSMEs, and access to finance remains a critical issue, with an unmet credit demand among women-owned MSMEs of approximately $111 million.
• Samoa, where women face challenges with obtaining business licenses and navigating the regulatory landscape. Despite women-owned businesses accounting for between 40 and 46 per cent of all businesses in Samoa, the fact that most operate informally limits their access to finance and support.

The authors recommend the following actions to support women-led MSMEs and increase their financial inclusion in the Pacific.

• Increase women’s representation in decision-making bodies to ensure their voices are heard in policy reforms.
• Incentivise financial institutions to develop products tailored to women-owned businesses, and broaden the scope of acceptable collateral.
• Simplify business registration processes and improve access to digital financial services to facilitate formalisation.
• Strengthen financial literacy programs, and provide digital and business development training, for women.
• Create web-based platforms on which women entrepreneurs can access information and connect with peers.