Grace Khoury Wojdan Farraj Suhail Sultan To identify

Grace Khoury Wojdan Farraj Suhail Sultan

� To identify factors that �hold back performance �hinder formalization of Palestinian HBBs of women entrepreneurs � We argue that these women do not experience underperformance but rather constrained performance as a result of institutional factors � To fill the research gap concerning Informal entrepreneurship & Female HBBs in Palestine 2

� Typical entrepreneurship obstacles: �political �lack of financial support �lack of governmental policies �inadequate infrastructure � Women entrepreneurs in developing countries: �Institutional context: weak institutions �Social context: Gender-specific discrimination restrictions on: � mobility and interaction � working outside their homes 3

� HBBs are driven by necessity � Overlooked in business-oriented policies � Claims of underperformance by femaleowned firms are more representative of unfair gender biases rather than wellobserved facts (joy and control over life, social and economic contribution ) 4

Institutional Theory Regulatory institutions & socio-cultural norms constrain women’s entrepreneurial performance Challenges encompass institutional and social context: �lack of gender-sensitive policies to support women entrepreneurship in legal, financial or other aspects 5

� Dualists: few linkages, governments should provide credit, business development services, basic infrastructure and social services to operators in the informal sector � Structuralists: both sectors are fundamentally linked, government should regulate the commercial and employment relationship between the two sectors 6

� Legalists: operate in the informal economy to avoid rules and regulations Governments should simplify bureaucratic procedures to promote informal enterprises to register and become formal � Voluntarists: to avoid fees and other costs such as taxes, and should therefore be brought under the formal regulatory environment 7

� Qualitative � and exploratory design 38 Semi-structured interviews: 28 female entrepreneurs from 3 districts - 10 respondents: policy-makers, representatives, and officials in ministries and related NGOs - - 2 Focus groups: 8 Recently formalized female entrepreneurs - 3 Women cooperatives that provide support - � Non-probability convenience or opportunity sample was selected 8

� Interviewees’ intent to expand formalize: 86% experienced growth, 53% no sufficient space “The capacity building I received through the women forum has developed my design and marketing skills” “Without the loan, I could not have expanded my business nor provide employment opportunities, for which I am satisfied” 9

� Satisfied with their business performance “As long as my children have completed their higher education there will be no need for me to continue supporting the family” � Challenging factors are of an institutional nature (both informal and formal) 10

� (39 per cent) � Cooperative commented: �‘Culture and harsh judgment of society strongly discourage women from doing what they need to do to register their business’ � One official: �“Formalization is a confirmation that womanowned businesses are profitable; in a culture where women are held accountable to be transparent to husbands or other family members” 11

� Fear of taxation (36 per cent) “Why should I move to a commercial premises and leave the convenience of working from my home and pay taxes? ” � Lack of support services (29 per cent) “I would love someone to help me exhibit my products or provide training in design and export. Would registration provide such benefits? ” � Work/Life balance � Unaware of benefits of formalizing � Marketing bidding opportunities, recognition, exhibitions, 12

(18 per cent) � Access to finance �bank collateral needed for business loans � Complexity and regulations �of registration processes, rent contract or proof of ownership, inheritance laws � Political instability � Ease of movement �roadblocks, checkpoints, separation wall, etc. 13

- “Competition among various stakeholders on receiving donor funds allocated to women economic empowerment” NGO The diversion of focus of existing NGOs - This situation reinforces redundancy of programs and limits the impact on the economy and society at large - - “There are no policies to protect women HBBs, enabling owners of large businesses to take advantage of them” Ministry Gender unit - “Forcing these women to formalize could lead to fatal outcomes” Official 14

� - � � � Donor-funded initiative aimed at establishing ten gender units in the Chambers of Commerce Six classification schemes for business registration in cooperation with the Ministry of National Economy and an economic empowerment NGO Example: Grade Four registration allows businesses with investment capital of $5000 or less to formalize their business in exchange for a small annual registration fee of 20 JD Registered for at least three years can nominate themselves to join the Federation membership board and become involved in setting the policies of the Chamber in their district Although 1500 registered their informal business, women tend to renew their registration only before receiving a specific service they need from the Federation such as participating in an exhibition out of the country 15

� Partnership agreement between a women’s forum, a major national bank and a donor �Select active female-owned HBBs to: participate in a mini MBA program for six months prepare a viable business plan open a bank account obtain zero-interest business loans without a need for a guarantor �Eight female-owned HBBs were encouraged to register 16

� MOU with a national bank and Ministry of Labour to provide: �Zero-interest loans to 15 projects with a total capital investment of $150, 000 �A quota of one-third of these projects is dedicated to women enterprises with capital investment of less than $10, 000 17

� Donor-funded initiative implemented by a local NGO: �The ‘One Stop Shop’: To provide women with all the services and information they need formalizing their business in one place 18

� Combination of dualist and legalist perspectives on formalization � Cooperative framework & joint efforts from all relevant stakeholders is necessary describing the role of each stakeholder � Complementary roles in addressing female entrepreneurship � Participatory efforts should be coordinated among public, relevant ministries, municipalities, chambers of commerce (instating gendersensitive policies, incentives and quotas to ensure that women entrepreneurs are provided ample opportunities) � Private sectors (mentoring, access to financial resources, networking opportunities, sponsor exhibitions, marketing support) � NGOs and INGOs or donors (focus on original mandate, organized and integrated, rather than competitive and imitated) 19