My surprising discovery about women’s opportunities in Armenia
Underserved businesses run by women in Armenia need help to create a reliable client base and convince skeptical banks that their enterprises are a good investment.
Recently, I visited Armenia to assist in the production of a documentary film about the business experiences of women in rural and urban areas of the country. I went with an unwitting preconception on the role of women there. As part of the Soviet Union, women in Armenia were numerous and prominent in movements for social and political change, as they were in other parts of the bloc. And that image of greater emancipation has stuck in my mind when I think of the role of women today in post-Communist countries. But I was surprised to discover that today’s Armenia is very different.
Despite the prominence of women in political life in the Soviet Union, the Communist system, using its political and social power, managed to largely cover up the depth of inequalities for women’s opportunities. So, when Armenia became independent in 1991, the illusion remained that equal opportunities for women were already well established.
In fact, gender equality took quite a knock during Armenia’s transformation to a market-based economy, when women fell out of the labor market in large numbers. The result was that many women wage earners returned to nonpaying household work. Another facet of Armenia post-independence has been a dramatic drop in the representation of women in politics from the “statist feminist” era, when their representation was regulated by quotas.
Promoting women entrepreneurs in Armenia can go a long way to remedying this situation. Micro, small and medium-sized enterprises play an important role in the empowerment and economic freedom of women in Armenia. As in other countries across the world women are increasingly becoming agents of growth for the economy. The participation of women in the ownership of firms rose from 11.5% in 2005 to 15.3% in 2013, with the country topping the ranking of a 2016 survey of Eastern European countries in its support to women entrepreneurs.
While filming the documentary, I met with several businesswomen, some of whom were just starting up and some who had well established businesses. The interviews for the documentary shed useful light on the opportunities and challenges to promoting women entrepreneurs in Armenia (and beyond), and how development institutions working in the country can advance the participation of women in business. One interviewee—Margarita, who runs a factory making a flatbread called lavash—was a particularly valuable resource. With small businesses vulnerable to failure everywhere, Margarita spoke of the necessity of equipping women entrepreneurs starting a business with the right training. ADB has assisted this by supporting a program that helps them prepare business plans and loan applications, manage cash flow, understand financial products; handle mentorship; and provide business development support.
That support enabled her to get her business started and, crucially, is helping sustain it—and start a family: Margarita’s mother-in-law has taken on the role of homemaker and looks after her two-year-old daughter.
The micro, small and medium-sized enterprise sector across developing countries in Asia faces high barriers in access to affordable credit, and these firms need to be able to operate in more conducive business environments. ADB and other development financers are devoting significant resources to making progress both through their loan operations and policy dialogue. In Armenia, ADB’s access-to-finance operations helped increase the share of women-led small and medium-sized businesses, and it helped the government formulate a business strategy for SMEs that has an action plan for promoting the entrepreneurship of women.
Despite the progress, finance needs to be delivered more directly to underserved businesses run by women and should be complemented with business training to create reliable clients and convince often skeptical banks that a small or medium-sized business is a good investment.
These businesses come under a well-deserved spotlight each year on June 27, which the United Nation’s General Assembly has declared Micro, Small and Medium-sized Enterprises Day. The potential for these firms to empower women and advance other social agendas in developing economies is huge, but significant barriers still need to be overcome.