Ms. Trang Nguyen Manager, Business Enabling Environment Program Mekong Private Sector Development Facility International Finance Corporation Women constitute a large group in Vietnam in terms of business start-up and ownership. Encouraging more women to become involved in enterprise and grow existing businesses will impact positively on Vietnam's economic performance. We invite to listen to women entrepreneurs from different parts of Vietnam as they share their experiences in doing business. As in other developing countries, women face a number of challenges, not only due to the strong influence of historical and cultural values but also because of discriminatory barriers in the business environment. However, despite these obstacles, they have been struggling to develop their companies, in many cases with creativity and effectiveness. They have different definitions of success, varying goals, and unique life experiences that influence their work and their business. Their frank and insightful confidences may help inspire other women across the country to put their cherished business ideas into practice, provide all those involved in supporting, financing and developing businesses, including the government, with more information about the specific needs of women entrepreneurs, and serve as suggestions for concrete actions that can boost women's enterprise. TABLE OF CONTENTS ACKNOWLEDGEMENTS 3 INTRODUCTION 5 LAWS AND REGULATIONS - THE BUSINESS ENVIRONMENT 9 MONEY MATTERS - ACCESS TO FINANCE 15 SETTING UP SHOP - PROPERTY AND INFRASTRUCTURE 23 MAKING CONNECTIONS - BUSINESS CULTURE AND NETWORKING 29 DAY-TO-DAY MANAGEMENT - RUNNING A BUSINESS 37 BUSINESS AND FAMILY - WORK-LIFE BALANCE 47 FINAL THOUGHTS 51 NOTES 52 VOICES OF Vietnamese women ENTREPRENEURS 2 ACKNOWLEDGEMENTS ACKNOWLEDGEMENTS This publication is a joint product of the International Finance Corporation's (IFC) Mekong Private Sector Development Facility (MPDF) and Gender Entrepreneurship Markets (GEM) initiative. We are grateful to the Australian Agency for International Development (AusAID) for its financial support. We wish to thank the Vietnam Women's Union, the Hanoi Young Entrepreneurs' Association, the Ho Chi Minh City Women Entrepreneurs' Club, the Young Business Association of Ho Chi Minh City, the Can Tho Business Association, and the Da Nang Women Entrepreneurs Club. Without their logistical support in arranging interviews and focus group discussions among their members, this publication would not have been possible. The team responsible for developing this publication includes the following individuals: Huong Thien Nguyen (MPDF) was responsible for the overall management of the project, under the guidance and technical oversight of Trang Nguyen (MPDF) and Amanda Ellis (GEM). Rashmi Pendse (MPDF), Froniga Greig (consultant) and Thi Trinh Nguyen (consultant) drafted the document; Froniga; Thi and Huong coordinated the data gathering and field research. Photographs were taken by James Maxtone-Graham. Julie Weeks (consultant and CEO of Womenable, Inc.) and Jozefina Cutura (GEM) provided feedback on both research tools and drafts of the report. Dung Tuan Hoang (MPDF) also provided feedback on the content, layout and design. My Thi Nguyen (MPDF) provided logistical support. Most importantly, we wish to express our sincere thanks to the women entrepreneurs across the country who gave their time to share their views and thoughts for this publication. 3 VOICES OF Vietnamese women ENTREPRENEURS 4 INTRODUCTION INTRODUCTION Women play a crucial part in reducing poverty many ways.1 They not only increase the and advancing human development. Through production of goods and services but also a variety of roles - family caregivers, create jobs, in many cases for other women. agricultural producers and wage earners - The extra income of women business owners women have a positive impact that not only and workers boosts family incomes, instills sustains their households but also benefits personal confidence and fosters a sense of their overall societies. In recent years, there empowerment. Over time, this leads to has been greater awareness of yet another greater recognition and respect for women's way through which women power economic abilities and contributions, which, in turn, can growth - entrepreneurship. change broader attitudes and perceptions in their societies and ultimately shape a more Throughout the world, the number and equal environment for women and men alike. influence of women-owned and women- managed enterprises is increasing. This is In Vietnam, there are several reasons to be due to a number of factors, including better optimistic about women's entrepreneurship. recognition and protection of women's The country's impressive track record on political and economic rights (such as gender equality, its strong commitment to both equality, education, and access to economic growth and poverty environment for resources), the growing role of the private women's business activity.2 Current estimates sector in many economies, and the of the percentage of female-owned businesses globalization of trade, which has increased range from 22 percent to 35 percent.3 As long market opportunities for businesses. as these positive trends continue, there is no Businesses run by women - ranging from reason to doubt that women in Vietnam will large companies to small, family-sized increasingly have greater opportunities not only enterprises - contribute to their communities in to share in but also to create prosperity. 5 However, much remains to be done to Voices of Women Entrepreneurs in Vietnam ensure that women-owned businesses highlights some of these conversations with continue to thrive. Recently, the IFC successful businesswomen. As they reveal surveyed 473 women entrepreneurs in in the following pages, women entrepreneurs Vietnam and conducted in-depth interviews still face many obstacles on a variety of with over 80 of them to learn more about levels. In "Laws and Regulations - the the challenges they confront and seek their Business Environment," they begin by recommendations on possible policy discussing the problems posed by an remedies.4 The results yielded several evolving and inconsistent legal context. useful inputs for reform; in particular, Next, in "Money Matters - Access to businesswomen expressed a clear need for Finance" are their thoughts on the entrepreneurial and women-only training, overwhelmingly common concerns of finding improved access to finance, and an official capital and managing finances. Following channel or "home" through which they this, in "Setting up Shop - Property and could relay their particular business Infrastructure," the women explain how a concerns to policymakers. lack of access to land and to adequate 6 facilities and services limits their businesses. Despite the difficulties confronting them, In "Making Connections - Business Culture Vietnamese women entrepreneurs and Networking," they describe how the way demonstrate an extraordinary ability to that business is done in Vietnam can impede survive, adapt and prosper. Their their efforts. They also highlight a clear discussions go beyond describing need for networking and associations. Next, problems to reveal a number of creative in "Day-to-Day Management - Running a and effective coping strategies and tactics. Business," the conversations turn to the It is our hope that by amplifying their problems women business owners voices, this publication will not only help encounter in expanding their markets and expand opportunities for existing finding and retaining qualified staff. Finally, businesswomen in Vietnam but also inspire in "Business and Family - Work-Life future generations to follow their own Balance," the women candidly reflect on their visions for economic development. conflicting responsibilities at work and at home. 7 VOICES OF Vietnamese women ENTREPRENEURS 8 LAWS AND REGULATIONS THE BUSINESS ENVIRONMENT In recent years there has been increasing private firms in general and for women-owned recognition that a country's legal and policy enterprises in particular. In the World Bank's environment is a key factor in its achieving annual Doing Business report, which sustainable business and job growth. In compares the business enabling environment Vietnam, the government has demonstrated a across countries, Vietnam ranked 99 out of strong commitment to transforming the 155.6 Most enterprises, whether male- or economy from centrally planned to market- female-owned, report difficulties when it oriented. Since launching the economic comes to understanding and following reforms known as doi moi ("renovation") in complex regulations, dealing with government 1986, the country has experienced officials, and providing insights regarding remarkable growth, driven largely by the potential policy changes. Businesswomen in private sector.5 During the Tenth Communist Vietnam also believe that the absence of a Party Congress this spring, the political policy dialogue mechanism through which leadership reaffirmed its commitment to they can address their chief concerns, such further integrating Vietnam into the global as access to capital and land, imposes economy and to continuing with related additional limitations on their success. reforms, such as the Common Investment Law, which facilitates business investments. The government is also firmly centered on LEGAL ISSUES fulfilling the United Nations' Millennium As is the case for most entrepreneurs in Development Goals, which include poverty Vietnam, whether male or female, legal issues eradication, gender equality and women's empowerment, by the year 2015. pose a significant concern for women business owners. Many female entrepreneurs However, despite its progress and future simply do not have the time or resources to ambitions, Vietnam still has a long way to go understand the full impact of regulations in terms of improving business conditions for relating to their businesses. Different laws 9 specify a variety of complex requirements, growth is important for the country, many inadvertently creating a great administrative regulations and practices still tend to favor burden for businesswomen. In practice, the state-owned companies. implementation of laws varies according to the "Although the government has opened the level of government (national, provincial, or printing industry to private companies, local); to complicate matters further, actual preference is still given to state-owned procedures often diverge from those required enterprises. For example, only state-owned by rules on the books. As one business companies can publish materials about religion." woman comments, Some laws, originally meant to be beneficial, "Enterprises find the implementation of policies actually prevent enterprises from operating and laws frustrating, unclear and too dependent efficiently. For example, although the labor on the discretion of government officials." code in Vietnam recognizes the special circumstances of working mothers, it effectively In a fairly constant legal environment, such raises businesses' cost of hiring them: inconsistencies would be problematic enough, but given Vietnam's ambitious pace of reform, "At present, there are very few special policies they can be downright confusing. to support enterprises that employ a lot of Entrepreneurs often find it difficult to get women. Government policy is that female accurate and timely information on proposed workers have four months of maternity leave, changes affecting businesses: and one extra hour per day off during the child's first year. For enterprises that employ "Laws and policies in Vietnam change so fast...so mainly women, this means having to deal with there's no choice but to work hard and try my a labor shortage throughout the year." best to stay on top of them." Many women entrepreneurs are eager to Even when such details are available, official employ other women, but existing government "commitments" tend to differ from what is incentives in this area, such as tax benefits, ultimately decided. For example, while the require measures that lie beyond the capacity government officially insists that private sector of small companies: 10 "There is a policy that says enterprises employing many female workers are eligible for a tax reduction, but such businesses have to meet ten specific conditions, including one that requires the enterprise to have childcare facilities." As a result, both the actual and perceived costs associated with hiring females make it more profitable to hire men. TAXES High regulatory costs on and constraints to doing business are other common problems for entrepreneurs. Several women complained about illogical tax laws and collection practices: "Our [income] taxes increase every year. The tax authorities don't care whether we've actually had profits, or what our expenditures were throughout the year. They also don't care that even though we may have high that reduce document processing times revenues, our profits may not be very high. rather than as an element of corruption. One They just fix an amount each year and make woman put it matter-of-factly: us pay that in taxes." "We had a difficult time trying to get our tax Businesswomen involved in international trade refund because we didn't pay enough of a also face other charges besides income tax: bribe. We gave them some money, but they "We are required to pay the VAT [value added wanted more. And if we don't pay that, they tax] immediately when importing goods; but it is will just make our lives difficult." only after we sell the products that we can get the VAT refund. This is difficult for enterprises that lack capital because even if they haven't INTELLECTUAL sold the goods yet, they have to pay the VAT PROPERTY RIGHTS in advance. This can have a huge impact on the cash flow of small enterprises." Beyond taxes, another problem that limits the growth and innovation of many women-owned Another common concern is that officials enterprises, particularly design, craft or other apply tax regulations in an inconsistent creative businesses, is Vietnam's inadequate manner, thereby creating a breeding ground enforcement of intellectual property rights: for "unofficial payments." Bribes are practically a standard for doing business in "My company has registered for intellectual Vietnam, so much so, in fact, that property rights protection, but frankly, even if businesswomen view them as facilitation fees there are violations, there is nothing we can 11 do. For example, in 1995, I won the third RECOMMENDATIONS prize in a national contest for my design of a wooden toy. But when I went to an Businesswomen suggested several ways in which the government can improve the legal environment exhibition, I found that a state-owned for enterprises. Harmonizing laws and procedures company also in the education industry is crucial: had exactly the same design as mine. I couldn't do anything because my "We have to do business according to the law. So it is company was small and private, important to have a clear, reliable legal system that can competing against a large SOE." be followed." Also, women entrepreneurs suggested that information related to laws, policies and potential changes should be more readily available, through CONTRACT channels such as business associations, ENFORCEMENT newspapers, the internet and other public media. As Tran Thi Lan Huong states: Contract enforcement in Vietnam is still rather weak, especially since laws and "I just want to do business in an environment where the competition is fair and healthy. Entrepreneurs policies are applied inconsistently need to have better access to information. We throughout different levels of generally don't have easy access to information government and/or regions. When about laws and policies, and the relevant authorities disputes arise, women business owners usually aren't forthcoming when enterprises want to tend to find that resolution through find out this type of information." courts or arbitration is quite prohibitive Women business owners regard government efforts in terms of time and costs: that specifically encourage private sector "Going to a commercial arbitrator is no development as crucial. The draft SME different than going to court. Court fees Development Plan for 2006-2010 tasks the Ministry of Planning and Investment (MPI), Ministry of and arbitration fees are both very high. Justice (MOJ), and Ministry of Finance (MOF) with And because the processes are so time- reducing costs, streamlining regulations and consuming and have an impact on the reforming tax policies for small and medium-sized business, enterprises don't have time to enterprises. Such measures may particularly pursue them." encourage women entrepreneurs, many of whom have informal businesses, to register their Consequently, many women operations formally and thus have easier access to entrepreneurs often just prefer to cut capital. their losses and proceed with business as usual. Ultimately, businesswomen in Vietnam would like to have a more permanent "home" that allows them to advocate their regulatory and policy concerns to government officials. Governments in other countries have implemented high-level advisory boards, special task forces and public-private dialogue mechanisms for women's business issues. In Vietnam, where the government already consults the private sector when forming strategic and economic development plans and where the machinery for gender equity is rather well- established, such approaches may prove effective in boosting women's enterprise development. 12 NAVIGATING THROUGH UNCERTAINTY STAY INFORMED ABOUT GOVERNMENT POLICIES VU THI TU HANG, 54, is the director of Binh Dan Hospital in Da Nang. In 1996, Hang opened the first private hospital in Vietnam. Despite the initial lack of a clear legal framework for business, Hang has managed to establish a successful venture. Today, the hospital has annual revenues of VND7 billion (US$450,000). Early this year, Hang opened a second hospital, also in Da Nang, that was expected to earn a revenue of VND30 billion (almost US$2 million) in its first year of operation. During my 20 years as an employee of the Da Because the legal framework was undefined, Nang General Hospital, I encountered patients other people were afraid of investing in the who had to wait for months before they could health care sector. At the beginning, only a have operations. In 1989, an idea popped up few people supported my idea. People said a into my head - I would open a private practice private hospital wouldn't be as respected as a that could serve patients faster. Initially, we public one. They advised me not to leave my had more patients than we could serve. In important position at the state hospital. order to increase our capacity, we had to turn During the initial years, I ran my business our health care center into a major hospital without any clear idea of government policy. where operations could be carried out legally. The government did not consult businesses At that time, government policies relating to about potential changes in laws and the health care sector were ambiguous, regulations. However, during the last few especially the regulations that defined what years, I have gone to Hanoi many times to the private sector could do. The Ministry discuss regulations affecting private hospitals officials were nervous because nobody had with the government. Now I feel that the opened a private hospital before. It took me government respects the private sector more one and a half years to get permission from than before; it takes the effort to clarify the the Ministry of Health for my hospital. policy environment and make it more favorable for business. Now businesspeople are actually invited to official meetings. 13 VOICES OF Vietnamese women ENTREPRENEURS 14 MONEY MATTERS ACCESS TO FINANCE Throughout the developing world, access to loan amounts at higher rates of interest.8 finance, which refers not only to the Because businesswomen have relatively less availability of funds but also to knowing how to skills, time, resources, and credit, their manage money, is probably the biggest enterprises tend to be undercapitalized, challenge facing enterprises.7 In many employ fewer people, and less profitable than countries, entrepreneurs find it difficult to those run by men.9 obtain financing for any number of reasons, including poverty, a lack of acceptable collateral, a poor understanding of bank BANK LOANS requirements, improper financial In Vietnam, women business owners access management, and banks' rigid perceptions of capital from both formal and informal sources. risk. Without adequate funds, businesses The most common formal source of capital is cannot operate effectively, invest in innovation bank loans, but this is generally only possible and capacity improvements, nor, ultimately, for established enterprises with significant expand. Even if they can obtain capital, assets: owners of small and medium-sized enterprises (SMEs), in particular, may lack the "When you are just starting business, nobody financial management and accounting skills to trusts you. You can't do anything without capital. make the best use of available funds. If you don't have assets or a credit history, then nobody will lend to you." For women entrepreneurs in Vietnam, as compared to their male counterparts, access Some women indicated that they have to finance is a particular challenge. Men tend borrowed from state-owned financial to borrow more from government banks, institutions. However, even if entrepreneurs whereas women are more likely to tap into can demonstrate sufficient collateral, formal informal sources that offer relatively smaller lenders are extremely conservative: 15 "It is very difficult to borrow money from banks. "It is very difficult for me to get a loan from a You need to have assets like land or real estate bank because I don't know the procedures as collateral. And in many cases, the bank's very well. Often having collateral doesn't valuation of your assets is much lower than guarantee that you can get a loan from a their market value. As a result, the amount you bank. The banks will also want to evaluate are actually able to borrow from a bank is much your business plan and assess the investment lower than what you need." project's feasibility and potential for success." Often female entrepreneurs find providing Women also perceive Vietnamese state- evidence of collateral problematic, and many owned banks as inflexible and lacking in have been refused bank loans for this customer orientation, especially when it reason. The most obvious form of collateral - comes to SMEs and their needs: land - is difficult to leverage without a Land Use Certificate that proves one's title to a "A customer once transferred a payment of piece of land: hundreds of billions of Vietnamese dong to me through the bank. But because there was "Although I have both land and houses, I don't a minor difference between the name cited on have all of the paperwork that proves the transaction and the name on the ownership. So I can't mortgage any of my customer's money order, the bank held the assets for a bank loan." money... what's worse, the bank didn't even inform me of the situation! I found out about it Even those businesswomen who can tap into from my client. Not being able to access that bank funding say that getting a loan is a complex large sum of money for such a long time process that involves confusing paperwork: caused major problems for my company. Banks just don't have very good customer service attitudes." 16 Other common complaints about banks private enterprises. It is easier to borrow include insufficient credit limits, overly high from private banks, especially if you know interest rates, and short loan terms. Some someone at the bank and are willing to women indicated that it is easier for them to accept slightly higher interest rates. They obtain better deals from non-state banks will even help with preparing the necessary (private and foreign commercial banks), documents. Of course, it isn't easy for perhaps because such institutions are more early-stage companies to borrow customer-oriented and have a more flexible large sums of money at one time. In the view of the potential risks and returns case of my company, in addition to associated with the enterprise market. mobilizing capital from my relatives, I have "In the last five years, the market economy an established relationship with five other has allowed for the establishment of many companies that allows me to raise funds more private banks. This has been great for from them." Truong Lan Anh, 52, is the head of Thuan Phat, a food-processing cooperative in Ho Chi Minh City that has been operating since 1982. Thuan Phat has 12 contributing members and 130 employees. Anh's family holds an 85 percent share of the cooperative's capital, which is approximately VND10 billion (US$650,000). When Anh built her factory in an industrial Thuan Phat produces food products for park outside of Ho Chi Minh City five years both the domestic and export markets, and ago, she received a loan from a city-run realizes revenues of about VND18 billion investment fund to cover 80 percent of her (US$1.2 million) a year. Since 1997, Thuan investment. However, the rate was "too Phat has been exporting products to high" and the loan term was "too short," Russia, Hong Kong, Australia, and the with only five years for repayment. USA. However, a lack of capital is currently preventing the cooperative from expanding "For small enterprises like ours, banks are its domestic and international markets. more like pawn shops. We have to give them our things, and they will give us a "The market has accepted my company's very short-term loan. So we can't use the products, but in order to expand nationwide, money to make a long-term investment. we will need to support a network of Because we lack capital, the investments distributors financially. And to be able to we've made in equipment and technology export to Europe, we will need to invest in have been sporadic." technology so that we can meet their food safety standards. We are planning to do all of this, but it will require a lot of capital." 17 INFORMAL FINANCING When the capital borrowed from family and friends has been exhausted, women When formal sources of capital are either sometimes approach “loan sharks” or insufficient or simply unavailable, women pawnbrokers, including jewelry stores. entrepreneurs resort to a variety of Because these moneylenders are willing to alternative financing strategies. Almost all, provide money in cases of emergency, the but particularly owners of newer and smaller interest rates that they charge are quite high. enterprises, obtain financing from informal alternatives, such as family, friends, "I mainly mobilize capital from family and employees and other businesses. Loans friends. It's hard to borrow money from other from family and friends are considered most sources. Even if you borrow from the black reliable. While in some instances family market, the interest rate is ten percent, and it's members take on the additional roles of not easy to get. But sometimes when I need initial investors or business partners, they money urgently, I end up having to borrow from generally limit their involvement to loans: the black market." "My company usually mobilizes capital by borrowing from family or friends. I pay them interest on the loans, generally at a rate FUNDING STRATEGIES slightly higher than the bank's rate." Some women have established their own revolving capital funds with friends or other business colleagues – an interesting arrangement because it also allows for networking opportunities: "We have a network of women entrepreneurs that allows us to help each other out with capital. We get together one Saturday a month, and everyone contributes money into a pot. Then we draw a name, and the person whose name is drawn gets to borrow the money. There is no interest on that loan, and a small amount is used to buy food for the get-together. Actually, the main purpose of these gatherings is for us to share experiences in doing business and to advise each other." Others have raised share capital for their business by inviting staff to invest, a tactic that also reduces the risk of employee attrition in an increasingly competitive market for skilled labor: 18 "I mobilize capital from my employees by or delivery. This payment lag greatly allowing them to buy shares in the company. reduces the amount of available cash and When they have shares, they have a sense of can even threaten an enterprise's operations: ownership and are more conscientious and "It is difficult for construction companies, dedicated. And when they receive dividends especially in the case of dealing with large, on those shares, they are even more willing state-funded projects. In the case of one to contribute more money to buying project, I didn't receive payment until six months shares...by earning more money, the after it was completed. And in the meantime, I employees are more committed to the had to pay cash up-front for the materials." company and are less likely to consider leaving." Financial management is difficult because female entrepreneurs often lack adequate knowledge and skills and/or competent and MANAGING MONEY trustworthy staff to carry out essential functions: In addition to the challenges of finding sufficient capital, another common problem "In small businesses, the owner usually has to businesswomen cite is that of maintaining do it all, including accounting and many other cash flow. Several women entrepreneurs jobs. I tried to recruit accountants to give me complain about the practice known as more time to focus on other things, but the “chiem dung”, which translates into "money quality of the candidates applying to private companies was too low." used by others." This is particularly common in industries like construction, where the Ultimately, the lack of financial and accounting nature of the business cycle usually results skills can also make it difficult for businesswomen in business owners receiving payments for to generate profits that they can subsequently goods or services well after the time of sale reinvest into their businesses. 19 RECOMMENDATIONS According to women business owners, the government can improve enterprises' access to capital by introducing targeted policies that complement its broader economic reforms and efforts to liberalize the banking sector. Simplifying the loan application process would be a good place to start. According to Do Thi Tuyet Mai, "The requirements and procedures that private enterprises must go through to get credit from financial institutions, including international financial institutions, are currently very complex and need to be simplified. In particular, enterprises that have been operating for ten or more years and have established good reputations should be able to access capital." Also, women entrepreneurs suggest that the government encourage financial institutions, particularly private ones, to lend more to SMEs and women-owned enterprises. As Cao Thi Minh Hanh suggests, "The state should help enterprises access different sources of capital, including international sources of credit. Now my company is so much bigger than I imagined it could be when I started it, but without better access to capital, I won't have the courage to continue expanding it." Finally, improving businesswomen's access to training in the areas of financial, accounting and management would greatly improve their capacity to manage cash flow. 20 SAVING PENNIES TO MAKE PROFITS BE CREATIVE IN FUNDING YOUR BUSINESS CAO THI MINH HANH, 47, is the general director of International Trading and Shipping Co. Ltd. (ITS). Before founding ITS in 2000 with two other partners, Hanh worked for a state-owned ship chartering company for fifteen years and then for a shipping joint venture for several years. Her company now has four branches across the country and provides a range of services, including freight forwarding, import/export services, and investments for shipbuilding. Despite its remarkable success so far, ITS will need increased access to capital and improved financial management to continue its growth. My business is the first private shipping company Three years ago, when we needed capital to in Vietnam to provide investments for invest in shipbuilding, we managed to borrow shipbuilding. Its success has been possible 80 percent of the necessary VND35 billion because my business partners and I were able (US$2 million) from a state-owned financing to mobilize a huge amount of capital from company. The loan has to be repaid in families, friends, and other informal sources. quarterly installments for about 10 years. Even with this loan, it was still very difficult for us to Formal capital such as bank loans, on the come up with the 20 percent deposit - the so- other hand, accounts for only 20 percent of called "corresponding amount" - that financing our total capital. Collateral is the biggest companies always require from borrowers. issue we have encountered when applying for bank loans. My partner and I have to use our Our reputation and credibility have enabled us to houses and land as collateral, but even then borrow from informal sources, but those sources we can only borrow up to 70 or 80 percent of are finite. We will need to have better access to the real value of our properties; my house formal sources of capital if we want to continue and land allow me to borrow only VND1 to grow. Within the next couple of years, as billion (approximately US$ 65,000) from the Vietnam joins the World Trade Organization, the bank. We've been able to find customer government will have to open our currently contracts worth US$ 200,000, but with only protected shipping market to foreign companies, such small loans from the bank, we would and competition will definitely increase. never be able to fulfill those big contracts. My solution to the problem of insufficient capital We can only take on a couple of small is to use the funds I have effectively. This projects, up to the value of US$ 3 0,000, at means that I continuously have to turn over the one time. capital by investing and reinvesting profits back Getting loans from the bank can also be very into the business. If a company has unused troublesome. Any time we want to get a bank capital, that means its management doesn't loan, we have to go through a lot of paperwork know how to do business. I also try to tap into and complicated procedures. We have to get different sources of capital. For example, I have signatures from several people, such as the set up a joint-stock group under which my precinct officials and the district authorities, and company and two other private firms help each there are many unreasonable requirements. other financially. 21 VOICES OF Vietnamese women ENTREPRENEURS 22 SETTING UP SHOP PROPERTY AND INFRASTRUCTURE Having access to sufficient land and proper - namely, the Law on Family and Marriage infrastructure are two important policy-related (2000) and the Land Law (2003) - specified issues that directly affect the livelihoods of that family LUCs must list the names of both women in developing countries. In many husband and wife, women were not places, women face restrictions on owning, guaranteed equal rights to land. At least ten using and inheriting land, which in turn million LUCs have been issued to individual prevents them from using such property as households in an officially gender-neutral collateral to obtain business or even personal context, but because each LUC originally had credit.10 Poor infrastructure burdens space for only one person's name, many more enterprises and customers with increased were issued to men, as the heads of delays and costs, ultimately hurting household, rather than women.12 Even now, profitability and opportunities for expansion. women continue to face obstacles in getting In rural areas in particular, the lack of land certificates (re)issued with their names; sufficient power, telecommunications, water, reasons range from varying degrees of local and roads makes it difficult for women not law enforcement to social factors such as only to do business but also to carry out traditional family practices.13 Ultimately, both domestic responsibilities. the lack of a legal land title and adequate physical space impose serious limitations on women-owned enterprises, especially those LAND ACCESS involved in agriculture and manufacturing: Women's access to and control over land has "Access to land is a major problem for been a longstanding issue in Vietnam. private enterprises like ours. At the moment, Officially, the state owns all land and grants many women entrepreneurs are still usage rights by issuing "Land Use operating from home. When their businesses Certificates" (LUCs) to businesses and grow bigger, they will be faced with the households.11 Until recently revised legislation difficult issue of finding land." 23 INFRASTRUCTURE locations, such as along national highways or near airports. While these zones are proving to be successful Another related issue, particularly in rural magnets for investment, their high rents areas, is access to infrastructure. Even and distance from city centers renders urban enterprises cite the need for better them inaccessible to many women roads, ports, and bridges. Lack of adequate entrepreneurs: infrastructure has limited production and delayed some women business owners' "It is very difficult for a company to get plans for expansion: into the industrial zone. And industrial "I own a company that sells both industrial zones are not necessarily good for all and household electrical supplies. One of my businesses - some businesses need to be difficulties is that big ships cannot dock in Da located in the city center so that Nang, so I have to go to Ho Chi Minh City on customers can find them. My company, for a regular basis to get my merchandise." example, supplies packaging materials and we need to be accessible to our In recent years, the government has customers, so a central location is established industrial parks in key necessary for us." Phan Thi Minh Tue, 49, is the director of Phu Thanh Co. Ltd., a seafood processing and exporting company in Can Tho. Before she and her husband started their business, Tue had 17 years experience in working for state-owned seafood companies. Today, Tue has 280 employees, and her exports are worth about US$4 million a year. Although Can Tho is considered the capital "The roads and bridges are in bad of Vietnam's Mekong delta region, Tue condition,and investments in infrastructure notes that inadequate investments in have been very slow. We have to first transport our shipments all the way to Ho infrastructure impede the development of Chi Minh City, and then put them in storage local enterprises: before we can export them. These extra steps cost money and significantly lower our profit margins. 24 RECOMMENDATIONS According to women business owners in approach throughout the country can make it Vietnam, the single most important reform the easier for women entrepreneurs to establish government can undertake with respect to land title to land, provide lenders with evidence of is improving their access to it. As mentioned collateral and obtain financing for their businesses: earlier, while women now enjoy the legal right to land, obtaining LUCs in practice is still quite "There isn't a single enterprise in Vietnam that difficult. In 2003 and 2004, after the revision isn't dependent on land or property. Enterprises of the Land Law, a World Bank-funded pilot need land-use rights in order to access capital project was implemented in several communes and invest in longer-term production." to ensure that LUCs included the names of The other major recommendation from women both husbands and wives. Not only were a business owners is to improve "hard" (i.e., significant percentage of certificates issued or roads, ports, telecommunications, etc.) and amended, but the project also generated "soft" (i.e., labor and services) infrastructure in greater awareness of women's land rights rural areas and industrial zones so that it is among local officials and the general public. easier for them to access suppliers, tap into Reissuing certificates via this two-name human resources and reach customers. 25 FOLLOWING YOUR VISION STAY PATIENT AND PERSISTENT NGUYEN THI BINH, 50, is the general manager of East West Seed Vietnam Co. Ltd. Binh, a trained biologist, used her savings of US$23,000 to start a vegetable seed company in 1994. In 1997, she set up a joint-venture enterprise with East West Seed Group, contributing 30 percent towards the company's start-up capital. Today, the business employs 200 staff across the country and has an annual growth rate of 40 percent. In 1989, after working for a state-owned seed own, and as a local private firm. I started the company for thirteen years, I realized that I business with my own savings. My parents had spent a lot of energy, effort and devotion thought I was crazy. Back then, the Chinese - all in vain. A major weakness of state- controlled nearly 98 percent of the seed owned institutions was that they were not market in Vietnam, and competing with them putting research into practice. Without any was not going to be easy. I would go to plans, I decided to leave the job to develop Chinatown to observe the Chinese buying my own career. and selling seeds and to learn about the trade. I would stay there until 10 p.m. The legal climate in Vietnam was still very difficult for private enterprises, especially Initially I had many problems because I was a those in agriculture. I thought that as an scientist, not a businessperson. During the first agricultural country, Vietnam could not afford two years, I had only losses. I did a lot of to neglect the development of the seed work on my own - testing the market, breeding industry. Moreover, with no husband or new varieties and recruiting and training new children, I was in a better position than staff. I didn't own any land and so I had to use anyone else to do something meaningful. my mother's house as an office. I helped a Dutch friend find investment I decided to focus on getting the farmers' opportunities in Vietnam's seed markets, and acceptance. Instead of selling seeds through he insisted that we set up a business. Trying agencies, I would sit in farmers' huts and to avoid risks, I decided to start small, on my sell to them [directly]. I believed that once 26 the farmers accepted the quality of our seeds, away from my family from the age of three; I they would demand them from the agencies, learned to live in the forest and got used to who would then have to sell our seeds. This bombings and malaria. All these things taught strategy worked; today, we're supplying seeds me to be persistent. Without such a history, I to 200 agencies. My long-term goal is to focus would never have been able to make this on research and development (R&D). My business survive. foreign partners initially wanted to centralize During my career as an entrepreneur, I have R&D in Thailand, but they finally let me set up learned a few lessons. First, never think you facilities here with the business profits. are unable to do business just because you Starting up was extremely difficult, but the don't have capital. What you need, in fact, is skills I had acquired previously, including knowledge and experience. Don't start big. knowledge of finance and money management, Without experience, a big investment is a big helped. The biggest challenge for me, though, risk - especially when our economy is still has been finding and training good people. It is changing very fast. Start small with whatever very hard because agriculture doesn't appeal to you have, accumulate experience and be young people these days. Our turnover rate at effective. Your business will grow along with the beginning was extremely high. I think the your experience and knowledge. The problem younger generation today lacks ideals and is not one of capital. Once you have proven commitment. During the American War, I lived yourself, the capital will find you. 27 VOICES OF Vietnamese women ENTREPRENEURS 28 MAKING CONNECTIONS BUSINESS CULTURE AND NETWORKING One of the biggest obstacles to the success of "In places like Hue, attitudes towards women women business owners in Vietnam, in are still very conservative. If you talked to comparison to that of their male counterparts, ten men on the street, eight or nine of them is their relative lack of business development would say that women should stay home. and networking opportunities. Women Women entrepreneurs are still considered entrepreneurs believe that male business strange, as if they were breaking the order of owners have more resources and time at their things. And although many women are self- disposal to advance frameworks and one-off employed and run household businesses, they measures such as loan assistance, training aren't considered entrepreneurs. Their and incentives. Encouraging women's husbands don't want them to become business networks is an important businesswomen." complement to these efforts, since such Government relations, which are a vital groups can take on a life of their own and element of business dealings in Vietnam, tend yield continued benefits. to be conducted in informal, social settings: "Everybody knows that 60-70 percent of BUSINESS CULTURE government-related business transactions or contracts are signed at social gatherings, over In Vietnam, the experience of being a women drinks. That's where men have the advantage entrepreneur often involves serious over women - they can drink and have lots of constraints to doing business. Traditionally, opportunities to network at social events." business is considered men's work, and many customs and practices discriminate Typically, it is inappropriate for women to against women either by restricting their participate in such gatherings, which can participation or through outright exclusion: create disadvantages for their enterprises: 29 "When I first started doing business, it was partners are less enthusiastic to conduct very hard for me to establish relationships with business with a woman, especially early in the local government authorities. Being a woman, relationship. This is especially true in sectors I couldn't invite them out for drinks or to that are traditionally male-dominated. I make parties, so I didn't have the opportunity to get stainless steel products; this is considered a to know them informally. I would only see man's business. When I meet new clients, them when I had a problem related to my they often seem suspicious, as if they don't business, so it was very difficult. I've had think that a woman can provide high-quality problems with the tax office, customs and local products and services. It's not until we've government agencies." worked together for a while that they start to trust me." Gender stereotypes also influence women's choices and opportunities when it comes to It is not only customers who often display a particular work sectors and occupations. In lack of respect; women entrepreneurs also Vietnam, sectors such as construction, maintain that managing men is also difficult in politics, science, and technology are the workplace: traditionally viewed as male domains, while health, education or labor-intensive "In general most male employees don't like manufacturing (i.e. textiles, footwear) are having a female boss. But if they respect your deemed more appropriate for women. For ability, that negative impression will slowly women business owners who operate in fade away." "male" sectors, breaking into the world of Younger women, in particular, encounter business is definitely more difficult: many problems, since respect for elders, both "Often it seems that clients and business men and women, is an important part of the 30 Confucian legacy in Vietnam. The Over time, by using the "appropriate" behavior combination of youth and gender makes it to their own advantage, women can subtly harder to establish relationships with reshape the way business is done in Vietnam. suppliers, clients and employees: Women business owners tend to find that "Right after I graduated from university, I their people and relationship management became a shareholder in a company. The skills ultimately stand them in good stead with partners, who were older, often shot down partners and clients who may initially doubt my opinions and comments. In their eyes, I their abilities: was just a kid, and female at that. What I'm trying to say is that women even have to "If you are a woman, and especially a young overcome negative stereotypes held by their woman, doing business, customers are colleagues, not to mention customers and automatically skeptical at the beginning. One business partners." time, a customer came to my company and insisted on meeting with the director. When he Despite these obstacles, many women met me, he was visibly taken aback because entrepreneurs have developed ways to work he thought I was too young. But after we had within Vietnam's informal business culture. In discussed business for a while, I saw his some cases, women work around gender attitude change, because he realized that I am biases by sending male colleagues to network a capable professional." with partners and officials: "When you deal with government authorities, NETWORKING one of the difficulties you face as a woman is that they expect you to be demure, accepting, Business associations provide another and to do what they tell you. If you are too opportunity for women to get around "old boy" tough, things are more difficult. But once networks. Such groups provide a setting in you've made a good impression through your which women can share information, form work, you can build a strong relationship. It's peer relationships and build partnerships with similar when it comes to relationships with other entrepreneurs. The Women business partners and customers. My Entrepreneurs' Council, which is part of the company sells technological equipment and Vietnam Chamber of Commerce and Industry, provides consulting services, so 95 percent of was the first association for registered our customers are men. To get a contract women-owned enterprises in Vietnam; in signed can be quite an ordeal; sometimes it recent years, a number of associations for requires taking customers out to a big dinner. private companies have also been But if there are women present, the men feel established. In addition, other mass less comfortable and have to watch their organizations, such as the Vietnam Women's behavior...so often I ask my project manager Union and Youth Union, have made efforts to to do the negotiation with partners in my build relationships between SMEs, especially place. It's easier for two men to talk." those in the informal sector. 31 Alan Duong, 30, is the owner of Mosaique, an upscale furniture and home- accessories company based in Hanoi. Alan spent six years in a refugee camp in Hong Kong and returned to Vietnam in 1996. She started up her own business in 1998 at the age of 23 and today, she employs more than 100 staff at three Mosaique stores. Exports account for about 80 percent of Alan's production. To make up for her lack of formal 1998, this young and outgoing woman had education and training, Alan has good already established a wide network of taste and a passion for the deùcor business. personal and business contacts while working as a realtor for foreign clients. "This business is very demanding. It Alan understands the role of marketing and requires capital, connections, technical networking in doing business - that's partly skills and experience. It involves hundreds why she opened Mosaique Living Room, of people from production, exporting, the first members-only club in Hanoi, a transportation, and finance, and is even year ago. dependent on the weather! You have to "I see business relationships as mutually make sure that all processes are in place beneficial - my partners and I create and everything goes smoothly in order to business opportunities for each other." meet deadlines. You have to be very dynamic to be in this business. If I didn't Alan has supplied deùcor items to love it, I couldn't be in this business." companies such as Neiman Marcus in the U.S.A., Hong Kong-based Shanghai Tang, Before starting her home deùcor business in and stores in Japan and Singapore. However, access to associations in "Business associations provide a forum through Vietnam is limited because such groups which women entrepreneurs can meet one have limited service capacity. Also, due to other. However, most women entrepreneurs their own personal time constraints, many don't have a lot of time because they split their women view mass associations more as time between family, friends and society, and social organizations rather than as useful their companies. Women can form small business networks. groups within associations, like the women's group of the Ho Chi Minh City Young In several cases, women entrepreneurs are Entrepreneur's Association. When we meet establishing their own informal groups as a once a month, we always find a lot to talk way to stay connected and even provide about, because so many of us are in the same access to capital: boat. Businesswomen understand one another - we can relate to each other's difficulties and provide one another with advice and feedback." 32 RECOMMENDATIONS Although the Vietnamese government has In developing recent policies affecting the long been committed to gender equality, business community (including the women business owners believe that there Investment Law, Enteprise Law and SME is still ample opportunity to reduce Development Plan), the Vietnamese discriminatory attitudes and practices in the government has consulted with a wide range economic arena. Publicly highlighting of stakeholders, including over 30 business women's achievements and expanding and civil society organizations such as the networking opportunities for women are two Vietnam Women's Union and the Vietnam potential measures that the government can Chamber of Commerce and Industry. This take. As Cao Minh Truc observes: type of public-private dialogue is an effective way for women entrepreneurs to raise their The issue for Vietnamese women issues with upcoming policies that may entrepreneurs is not necessarily that they affect their businesses; perhaps in the future face discrimination, but rather that they lack a more formal and permanent mechanism influence. There need to be fora where that focuses specifically on businesswomen women can really raise their concerns. Real might be established. The government life often occurs before laws are made. If could also consider measures that many people raise their voices, the laws will specifically encourage business networking have to follow real life." activities among women entrepreneurs. ` 33 MANAGING RISKS LOOK BEYOND YOUR BUSINESS PHAM THI MY LE, 34, is the director of Le & Associates Co. Ltd, a Ho Chi Minh City-based management consulting and training company with annual revenues of VND11 billion (US$750,000). Le founded L&A, which provides a range of personnel services, private management consulting, and professional training, in 2001. L&A currently employs 600 people in positions ranging from workers to executives. The company's main challenges include maintaining its brand, growth and staff amidst increasing competition. I was one of the many people who jumped My biggest achievement so far is that I have into the labor services industry as soon as built a brand name for the company. There are the government opened the market up to different ways for companies to build a private companies. I started with an reputation. Some use the media, advertising or investment of VND100 million (US$65,000) public relations. I have tried to build a culture from my family's savings, with five employees for my company. The core values I promote and a tiny office. include professionalism, caring, and dynamism. I think the culture of a company is primarily Now my business covers a full range of influenced by the style of its own leader. recruitment and training services. We can This market is getting increasingly supply companies with workers, secretaries, competitive, but I am prepared. To avoid accountants, sales supervisors, and competition, we have to find our niche. My executives. On average, we've grown by 150 strategy is to focus on the high-end market - percent per year. to train and provide consultants and 34 executives. We will provide training courses not company. Sometimes I look for investment only on skills but also on behavior and self- opportunities, but other entrepreneurs also just motivation. In the future, I will look for foreign come and find me. partners who can help bring our services up to The greatest difficulties I have faced in business "international standards". are managing people and time - capital and A key investment principle is diversifying risks. other issues are easier to handle. Also, SMEs I also have stakes in other businesses - a like mine don't have money to spend on market software firm, an occupational health and research, which can cost more than setting up a safety consulting joint venture, and a new business, so we often base our translation services and overseas education investments on qualitative information. 35 VOICES OF Vietnamese women ENTREPRENEURS 36 DAY - TO - DAY MANAGEMENT RUNNING A BUSINESS For female entrepreneurs in Vietnam, running sell goods at lower prices because their a business successfully involves making technology enables them to produce at lower several decisions on a daily basis and in an costs. Because my company's technology is increasingly competitive environment. Some out of date, my prices are higher. In of these - government policies, financial addition, because there are so many management, and professional networking - counterfeit goods on the market, customers have already been discussed. Among the prefer to buy products from large companies many other aspects of managing an with brand names rather than from small enterprise and maintaining its companies like mine, even if our product and competitiveness, women business owners prices are the same." consider market expansion and human Given the country's delay in WTO accession, resources the most important areas for those involved in the manufacturing industry, potential policy intervention. particularly the garment and footwear sectors, have already had to deal with loss of market share to Chinese producers and continue to EXPANDING MARKETS harbor concerns about the future: Vietnamese women entrepreneurs are more "When Vietnam joins the WTO I will be more than aware of the challenges arising from worried. Many more enterprises will be international economic integration and established, and many big companies will resulting competition from other countries: come to Vietnam, making the competition even fiercer. For example, a Chinese company sells "My company is facing harsh competition from a shirt that I sell for US$5 at only US$1 - how foreign companies who operate in the same can I compete with that? I think their industry. They have better technology, better advantage is that they must be getting some working conditions and more capital. They can government support." 37 Most women entrepreneurs are interested Vietnam's economy and have a number of growing their businesses through a variety of concrete suggestions at both the enterprise means, such as: better customer and government levels. For example, relationships, larger trade and export partnerships with foreign companies or other local enterprises are a viable opportunity for networks, the use of national trademarks and women entrepreneurs who want to expand branding campaigns, technology upgrades, their businesses, as they can pool resources, and staff training. However, they face a undertake joint activities, and access number of obstacles, including a lack of necessary expertise and technology: resources, time, information, and linkages to potential partners and markets. "I think I need to join forces with other cake manufacturers in order to develop our own Nevertheless, several businesswomen believe brands. Many brains can always generate that global developments will bode well for more ideas than one." Tran Thi Le Quy, 63, is the director of Da Nang-based Phu Ngoc Co. Ltd., a company that produces and supplies liquid medicine containers to the pharmacy industry. She currently employs 20 workers and has an annual revenue of VND1.5 billion (US$95,000). Quy had operated the production as a family business for 20 years before registering the business as a company in 2002. Her main focus now is on staying competitive. Technology improvement has been vital to The new equipment, technology transfer, Quy's business success and remains a and worker training required an investment central concern in her business strategy. of VND1 billion (US$65,000). Quy Quy was the first in her sector to switch borrowed the capital from a bank using her from manual to mechanical production, real estate as collateral. However, Quy which has enabled her to secure her anticipates that she may need to invest a position in the market: further US$360,000 in technology to upgrade her production. “Everyone in this business, from central to northern Vietnam, seals the product by hand; I "The government will continue to upgrade am the only one who has switched to industry standards, and the market will also machinery. It's lucky that I switched, because demand higher quality, especially now that just after I did, the government made it Vietnam's presence is increasing in the mandatory to use machine sealed containers." world market. We have to continually adapt and upgrade our products." 38 Nguyen Thi Hong Mai, 36, is the director of Hong Phat Joint Stock Company, a business that produces and supplies e-books and educational toys. In 1997, she started her first business, which supplies swimming pool and sauna equipment and services. Mai started Hong Phat in 2003 and currently employs more than 30 staff. Together, her two businesses currently generate more than VND30 billion (approximately US$2 million) a year in revenue. Mai is also the vice chairperson of the Hanoi Young Business Association. She attributes her success to having developed a keen understanding of marketing, which she has applied to her businesses. Mai learned about business management Since then, Mai has appreciated the firsthand after her first business failed. In the importance of market knowledge and mid 1990s, seeing how fast the living marketing skills to business successes. standards of Vietnamese people were Two years ago, when she decided to invest improving in the big cities, Mai started to in producing e-books and educational toys import and supply equipment and services for children, she spent much time and for swimming pools and saunas. But without effort on marketing, advertising, and the skills necessary to manage a business, establishing the distribution system even especially marketing skills, she failed. before her products entered the market. "I accurately predicted the growing demands Mai, who eventually aims to export her of the market, but that wasn't enough. I products particularly to the Vietnamese didn't do proper market research, and didn't communities overseas, finds business plan carefully...so I ended up importing a associations and other networking channels large shipment of products before I had done beneficial to her business in terms of any marketing. So I ended up with a large marketing, updating information and finding debt and didn't have the money to pay it." business partners. 39 Many women suggest that the government FINDING AND should make greater efforts to promote SMEs by developing better trade promotion KEEPING TALENT initiatives and providing greater support: Women entrepreneurs believe that having "Trade promotion programs have not been very talented people is crucial to the long-term effective to date. There are hardly any women success of their enterprises. However, in entrepreneurs who can afford to attend Vietnam, attracting and retaining capable international trade fairs on their own to find employees is one of their biggest challenges. new customers and markets...so government- Private businesses are often at a sponsored trade promotion programs should disadvantage compared to state-owned consider paying for a booth that a group of women entrepreneurs can share at these types companies in attracting good people because of fairs. In addition, local governments should of a widespread perception that state-owned consider giving discounts to women enterprises provide better working conditions entrepreneurs who want to rent space at and job security. They must also compete provincial commercial centers." with foreign-owned companies for talent. 40 Quach Kim Hong, 39 and of Chinese origin, is the president of Ho Chi Minh City-based Truong Vinh Garment Export Co. Ltd. After working for several years at "In this business you have to stay in close Taiwanese and Hong Kong-based touch with the workers. My workers know garment companies, Hong started her own that they can come to my office anytime company in 1995. Hong's company is now they have a problem. We speak the same subcontracted to produce brand name language and I can understand the mindset clothing for export including Adidas, of my employees. Employees of foreign- Reebok, Lee, and Nike. Hong employs owned factories go on strike all the time more than 600 workers, of which 80 because they have issues with their percent are women. management...we've never had a strike in my company." Attracting and retaining workers have Hong's believes that her human resource been the biggest concern for Hong. department is probably too large, but she Monthly staff turnover at her business recognizes the importance of recruitment and has been 10 percent. The rate - although training, and of being able to deal with issues not unusually high among private that concern her workers, such as housing, companies in Ho Chi Minh City - has insurance, health, and family affairs. negatively affected Hong's business and slowed her expansion ambitions. "Family lives need to be stable, or workers won't be able to perform well. So our "As hard as we try, we just can't compete company always tries to help out the families with the wages that foreign-owned of our workers when they are having companies pay their workers. Even though difficulties." working for foreign-owned enterprises is much more demanding, workers are easily Hong offers housing allowances and rents a tempted by higher pay. It's very difficult for nearby dormitory for workers from other me to retain workers, especially since we provinces. She is also setting up a vocational are surrounded by foreign companies in this school where she will train about 100 industrial area." workers a month. Although Hong had to make a lot of changes and investments to Hong, however, believes that as a meet the standards required by international Vietnamese businesswoman, she has companies such as Nike, she has found that advantages over foreign companies, these efforts have helped improve the particularly in understanding workers' company's management and quality control feelings and needs. systems and her staff's working conditions. 41 Also, as the private sector grows, many Many women adopt different strategies to businesses also find that some of their avoid high staff turnover. Some provide best employees are leaving to start their incentives to staff or attempt to improve own businesses: working conditions, but a general lack of resources means that many cannot "I think the main reason is that everyone increase salaries or provide training wants to eventually become his or her own programs: boss - no one wants to work for others forever. Many of my employees have gone "Due to the nature of our industry, women on to start their own companies once account for over 80 percent of the total they've learned the business. This is employees in the company. With regard to inevitable. When my company grows bigger women who are key professional staff, we - who knows? My business partners may support them in getting more education be former employees." and skills training. When it comes to workers, we are concerned about their health and with helping them care for their families." Businesswomen find it particularly difficult to recruit skilled and qualified human resources in poorer areas, where education levels are often lower than in urban centers: "In general I'm frustrated about the slow pace of development in the Mekong Delta region. Any manufacturing company that wants to use technology will have a difficult time, because it's hard to find workers with high skills. Any company, regardless of what industry it's in, needs technology to develop. For a company to grow it must continuously improve its products. But this cannot happen unless the skills and abilities of workers in the region are improved " 42 RECOMMENDATIONS As Vietnam integrates with the global economy, the SMEs that are powering its growth will need to become and remain competitive. Towards this end, women business owners would enthusiastically welcome more government-sponsored training programs and assistance targeting both entrepreneurs and staff. Such training, according to them, should not only cover general business issues but also a variety of specific areas, including technology (both as it relates to production, as well as to computers and the internet in general), marketing and strategy, business and financial management, and human resources. It should be made available on a wide scale and on an ongoing basis, especially in rural and/or poorer areas. Interestingly, a number of businesswomen expressed a strong preference for gender- specific business and management training, partly because of the increased networking and experience-sharing opportunities that a women-only training environment can provide. Another key area for government action is development by reforming the existing expanding market access for women education system. As Nguyen Thi Binh entrepreneurs. Increasing information on remarks, the need for reform in this area is potential markets, conducting trade fairs, pervasive: encouraging study trips abroad and establishing promotional offices abroad can "The education system needs a complete help businesswomen establish international overhaul. The schools have not been able linkages with intermediaries and to teach our students how to think customers. independently. In terms of developing our Finally, women business owners believe human capital, our country has been very that the government should put higher slow. This is a huge obstacle for priority on the national human resources enterprises like ours." 43 VALUING PEOPLE RECOGNIZE THAT EMPLOYEES CAN BE YOUR STRONGEST ASSET PHAM THU HA, 43, is the vice director of Hanoi-based Hoan My Co., a provider of company cleaning services, equipment and technology. Ha and her husband, the company's director, started the business in 1997 and since 2000, they have expanded operations to central and southern Vietnam. As for many other businesses, human resources management poses a major challenge to Hoan My. The company, which has annual revenues of VND37 billion (US$2.4 million), employs about 2,000 staff across the country, providing services to hotels, office buildings, industrial complexes, and hospitals. The most important skill I have learned over the bond between them and the company, and years is how to manage people, including how make them feel secure about their jobs. We no to handle the relationship with my husband in longer take on short-term or part-time our business. Private companies like ours face contractors; instead, we focus on long-term many problems in terms of human resources contract employees so that we can ensure a management. It's very difficult to recruit and stable work environment. Now we have retain good people; typically, those who are managed to maintain a reasonably steady inexperienced or incapable stay, while the good workforce, with a turnover rate of about three ones leave. The issue is a particularly pressing percent a month. one in our rapidly growing southern market, Managing people is still the biggest challenge where workers are less interested in savings for me, though. I'm certain that some time and other employers can easily lure them away soon, there will be a dramatic adjustment in with higher pay. the wages in the labor market. If workers are We've set up our own training center where we not satisfied with their salaries, they will quit. train about 100 workers a month. We can't But it's not easy for us to pass raises onto afford to pay our workers very high salaries, but clients. If low pay becomes a big issue in our we try to emphasize professionalism, form a company, it will be the death of us because 44 all of our staff are laborers. Our business has been growing very rapidly, but I want to slow things down so we can make adjustments. We need to have a defense strategy - to find a way to increase the income for workers. Up to 90 percent of our employees are women who come from the countryside. We haven't received any assistance from the government, although we're creating jobs for the poorest people in the society. On the contrary, the current tax rules make it even harder to manage human resources. While I have to spend up to 70 percent of the company's expenses on workers' salaries, the tax authorities have established a top-end limit of 50 percent. With such a rule, it would be very difficult for us to increase workers' salaries. It's also difficult for us to give bonuses and other extra benefits to our female employees because the tax authorities don't consider these outlays as enterprise expenses. Managing family relationships in our business has also been a challenge. It's ironic that my husband and I didn't have any problems when we faced difficulties, but issues have emerged since we have become successful. Even in our business, I try to act as the wife. I think I have good intuition and I know the market better than my husband does, but I just offer a different opinion and let him make the final decisions. As a woman, I have to consider the family above all else 45 VOICES OF Vietnamese women ENTREPRENEURS 46 BUSINESS AND FAMILY WORK - LIFE BALANCE As women throughout the world have greater FAMILY RESPONSIBILITIES access to economic opportunities, they are increasingly able to contribute financially to the In Vietnam, women entrepreneurs strive to well-being of their families. However, they may build successful businesses while also also encounter more complications in balancing maintaining a strong role in their families. work and family life. In many countries, Many believe that balancing work and family traditional expectations of a woman's role and can be much harder for women than for men. functions within the family can persist, Women often feel pressure, either self- potentially leading to a "double shift, double inflicted or from others, to put their families burden" for those who work outside the home. first before their businesses: This is especially true for many women in "Sometimes I feel women have to divide developing nations, "where poverty and lack of themselves in two halves: one for family and infrastructure can make the most basic tasks one for society." harder and more time-consuming".14 For women entrepreneurs in particular, time spent Another woman told us, on domestic duties can leave them with less availability for other activities that may help "I have worked for over 20 years, but in my grow their businesses, such as training, mind it's always 'family and work,' never 'work networking and business development. and family.’ ’’ 47 Tran Thi Lan Huong, 29, is the director of Hanoi- based Nam Son Trading and Production Co. Ltd., a business that assembles, produces and distributes bathroom and kitchen equipment. Huong started her business in 2001 and registered it as a private company in 2003. As is common for many women entrepreneurs in Vietnam, Huong has found that her family is both an invaluable source of support as well as a significant time commitment. With little business experience and a small just learning by doing - learning from each amount of capital borrowed from her family experience about dealing with customers." and friends, Huong started a business as a Two years later, Huong was ready to set small-scale trader. up a company. She was also pregnant with "In the beginning, foreign business partners her first baby. didn't take me seriously because they "It was such a difficult time for me. I was thought I was too young. I knew nothing doing everything myself, even making about running a business. I was deliveries to my customers." The ability to make quick and effective "If both a husband and wife are entrepreneurs, decisions is a key aspect of managing any they can discuss business with each other...but business. Although women entrepreneurs if they do different things, it's more difficult. recognize that business advisors or Family happiness is ultimately determined by consultants can add value to their enterprises the woman." and help them with key issues, the high cost Many women managers of family enterprises of such expertise prevents many women from indicate that even though they exercise de actually employing them. Instead, many facto operational control, it is extremely women in Vietnam frequently turn to family important to have important decisions appear members for advice before making important as though they were made by their husbands business decisions: or another man in the family. "Both my husband and I are entrepreneurs, so we often discuss business matters. My husband has good ideas...everyone looks at SOCIAL PRESSURES an issue from a different perspective. Most women entrepreneurs in Vietnam Sometimes he helps me by giving me a cherish their traditional roles and influences number of options from which to choose. But within their families, but they are also other times I just have to make my own sensitive to the fact that societal conventions, decisions and stick to them." which stem partly from patriarchal Confucian Family members, especially husbands, can traditions, may complicate their efforts to provide varying levels of support: strike a balance between business and 48 personal life. Those who want their time and relying on the right people. I didn't businesses to grow find that practical have my first baby until six years after I got considerations, such as time and resources, married because I couldn't juggle work and can limit their choice of activities: family at the same time. Before I had my baby, it wasn't unusual for me to work 16 hours "I want to grow my business, but only to the a day. Now I work 10 hours a day, and when I extent that I can manage it. I don't want my get home, I focus solely on my baby. I business to expand to a point where it's beyond manage this by delegating responsibility to my own management capacity. As a woman, others At home, I have a housekeeper, and at I have a lot of other responsibilities to both my work, I have slowly moved away from dealing family and society." with day-to-day management of the company towards focusing on strategy and business However, other women feel that gender development." biases prevent society from acknowledging their achievements and contributions: Women find that networking with other women, sharing experiences and discussing "When your business achieves a certain level strategies both helps and inspires them to of success, you want to take some pride in it. continue with their efforts. Through their But when a woman entrepreneur is successful, successes, businesswomen challenge sometimes she isn't given the credit she traditional Vietnamese gender roles on a daily deserves, and instead, people will say that she basis, ultimately paving the way for the next used her femininity to get ahead. When I hear generation of female entrepreneurs. something like that, it bothers me, and it affects my work and attitude. I feel like all of my efforts, the fact that I worked all those years and sacrificed spending time with my family hasn't been recognized and valued. This is especially difficult for younger businesswomen who are successful, as they may have small children at home and therefore more family responsibilities...it's probably a bit better for older women." Occasionally, some women entrepreneurs have even had to defend their right to success, wealth and a career. STRIKING A BALANCE Although juggling work and family can be difficult, many women entrepreneurs have developed their own creative and effective ways of managing their time and other people's expectations: "The biggest lesson I've learned in running my own business is the importance of planning my 49 RECOMMENDATIONS Although Vietnam is a regional pioneer in the area of gender equality, women business owners believe that more can be done to improve business opportunities. At a broader level, government and society should recognize that "Equality doesn't mean that women want to trade places with men. They still want to be wives and take care of the family. Society needs to provide more support for women-owned enterprises, because women entrepreneurs have to juggle both family responsibilities and run their businesses." In terms of specific policy solutions, besides investing in the infrastructure and services that women need to coordinate their family and professional lives better, providing more access to business and management training would be a smart way for the government and society to go. As Do Thi Tuyet Mai suggests, "Women entrepreneurs need better access to business education and training so that they can manage their businesses better. Training courses need to help women establish longer- term strategies for their businesses. Women entrepreneurs would benefit from having access to networks where they could ask questions of each other and share experiences about running a business." During the next few months, the National Assembly is expected to pass the Law on Gender Equality, which not only reinforces the principle of gender equality in various arenas, including economic and social, but also will outline specific policy measures to support women's empowerment and shape a more equal society. The Vietnam Women's Union has been actively involved in helping the government solicit feedback on the law from business groups and the broader public so that it can be relevant and effective. 50 FINAL THOUGHTS As their candid confidences throughout the It also requires that all future legislation and preceding pages reflect, women business policies undergo a gender assessment before owners confront a wide range of obstacles to their adoption, so that any potentially negative establishing, managing and expanding impact on women can be addressed first. enterprises in Vietnam. Yet, instead of Finally, to complement the government's passively waiting for top-down reforms, these efforts, local and international donors have female entrepreneurs have already been undertaken a variety of programs to assist working around many of these problems with women's entrepreneurial activities. remarkable energy, flexibility and persistence. Their stories share a recurring theme of not However, while the above measures hold only adapting to restrictive conditions but also, some promise, much more needs to be done. in some cases, transforming barriers into From an overall perspective, the programs opportunities. that do exist in Vietnam seem somewhat ad- hoc and even inconsistent. A comprehensive Despite the individual successes highlighted strategic framework and system for supporting here, it is clear that further policy reforms and women's enterprise development appears to encouragement from the government and be missing. It is time to look at this issue donors would greatly benefit the majority of critically and thoroughly to help Vietnamese women entrepreneurs in Vietnam. Already, women business owners further realize their significant efforts to further women's potential and contribute to the country's opportunities in business are underway. The economic development and poverty Vietnamese government has demonstrated alleviation. Female business owners are a not only a strong history of but also a firm valuable source of information in identifying commitment to advancing women's existing problems and devising potential opportunities and economic development; solutions. Perhaps, as in other countries, a both the Socio-Economic Development Plan more formal mechanism that incorporates 2006-2010 and the draft SME Development their ideas and feedback will lead to more Plan 2006-2010 include support for women- effective and sustainable policies and reforms. owned enterprises. The upcoming Law on We urge the Government of Vietnam, Gender Equality not only aims to ensure equal businesses, donors, and the general public to opportunities for women politically, socially keep these remarkable entrepreneurs' voices and culturally, but also seeks to empower in mind as they continue to work together to them economically, specifically in the areas of improve Vietnam's business environment and business ownership, management and labor. generate prosperity. 51 NOTES For more information, please consult the Gender Entrepreneurship Markets website at http://www.ifc.org/gem and the Mekong Private Sector Development Facility website at http://www.ifc.org/mpdf. 1 Official statistics do not always reflect the extent of these contributions, as women's economic activities tend to occur largely in the informal sector. According to UNFPA, women constitute approximately two-thirds of self-employed entrepreneurs in the informal sector. See United Nations Population Fund (UNFPA), State of World Population 2005: The Promise of Equality: Gender Equity, Reproductive Health & the MDGs, 2005. http://www.unfpa.org/swp/swpmain.htm 2 Vietnam is regarded a leader among Asian countries in institutionalizing gender equity. See Asian Development Bank, Women in Viet Nam Country BriefingPaper,Manila:November2002. http://www.adb.org/Documents/Books/Country_Briefing_Papers/Women_in_VietNam/default.asp 3 Amanda Ellis, International Finance Corporation, January 2005. The estimates cited are from official statistics and the Chamber of Commerce. Another estimate, from the National Committee for the Advancement of Women in Vietnam (NCFAW), states that 24.7 percent of enterprise owners in Vietnam are women. See Dang Huynh Mai, "Progress in Gender Mainstreaming - Vietnam," Speech from APEC Conference, 2002. http://www.apec.org/apec/documents_reports/ministerial_meeting_on_women/2002.html 4 International Finance Corporation, "Women Business Owners in Vietnam: A National Survey" Private Sector Discussion Paper No. 21, Hanoi, Vietnam: March 2006. http://www.ifc.org/ifcext/mekongpsdf.nsf/Content/PSDP21 5 In Vietnam, the private sector is estimated to contribute 42 percent of GDP and 56.3 percent of jobs. See "SME Factsheet," SME.com.vn. http://www.sme.com.vn/Article.aspx?TopicID=107. 6 World Bank and International Finance Corporation, Doing Business in 2006: Creating Jobs, Washington, DC: 2006. 7 International Finance Corporation, "Women Business Owners in Vietnam: A National Survey." 8 Asian Development Bank, Women in Viet Nam, page 22. 9 Asian Development Bank, Women in Viet Nam, page 21. 10 UNFPA, State of World Population 2005: The Promise of Equality, page 14. 11 "The Good Pupil," The Economist, 6 May 2004. 12 International Finance Corporation, "Gender Equal Land Laws: Driving Business Forward," page 3. http://www.ifc.org/ifcext/enviro.nsf/Content/GEM_BPNotes 13 Asian Development Bank, Women in Viet Nam, page 14. 14 Susanne E. Jalbert, "Women Entrepreneurs in the Global Economy," 17 March 2000, page 30. http://www.cipe.org/pdf/programs/women/jalbert.pdf Giaáy pheùp xuaát baûn soá: 118 - 2006 / CXB 118-15 / LÑ ngaøy 16-2-2006 52 In 700 cuoán - In xong vaø noäp löu chieåu thaùng 8-2006 Ms. Amanda Ellis Head of Gender Entrepreneurship Markets International Finance Corporation Promoting gender equality is recognized as so essential to reducing poverty and improving governance that it has now become a development objective in its own right (Millenium Development Goals). As women comprise the majority of the poorest 1.3 billion people who subsist on less than US$1 a day, they warrant special attention as a target group for poverty reduction. However, women themselves are also a critical part of the solution. Increasing their economic opportunities is integral to meeting not just one, but all of the eight Millennium Development Goals. Women's private sector activity in the formal and informal economies, both as employees and as entrepreneurs, has increased significantly over the past decade. However, women are more likely to be stuck in the informal sector due to specific legal impediments and/or cultural norms that restrict female labor force participation and business activity. Addressing gender discrimination in the broader investment climate is a prerequisite to unleashing economic growth and making progress towards gender equality and the empowerment of women. Women entrepreneurs should have a key role to play in influencing public policies, especially those affecting their businesses. At the moment, their voices are often lost or unheard by policymakers. A great many women entrepreneurs are being isolated, both emotionally and geographically, and lack access to traditional networks or spheres of influence, which make them less competitive and place them at a disadvantage compared to their male counterparts. Addressing the specific barriers faced by women entrepreneurs is good for growth and critical for poverty reduction. Unleashing their full economic potential will benefit not only women themselves but also their families, society and the economy overall. IFC-MPDF is a multi-donor funded initiative set up by HANOI 3rd Floor, 63 Ly Thai To St. the International Finance Corporation in Vietnam, Hoan Kiem Dist., Hanoi, Vietnam Cambodia, and Lao PDR, to reduce poverty through Tel: (84-4) 824 7892 sustainable private sector development. We work Fax: (84-4) 824 7898 through six interrelated programs that seek to improve HO CHI MINH CITY the business environment, develop the financial 3rd Floor, Somerset Chancellor Court 21-23 Nguyen Thi Minh Khai St. sector, improve managerial capacity, and increase Dist 1, Ho Chi Minh City, Vietnam sustainable business practices in three sectors that Tel: (84-8) 823 5266 Fax: (84-8) 823 5271 are central to economic growth and poverty reduction - tourism, agribusiness, and garments. IFC-MPDF's PHNOM PENH 70 Norodom Blvd, donors are the Asian Development Bank, Australia, Sangkat Chey Chumnas Canada, Finland, IFC, Ireland, Japan, New Zealand, P.O. Box 1115. Phnom Penh, Cambodia the Netherlands, Norway, Sweden, Switzerland and Tel: (855-23) 210 922 the United Kingdom. Fax: (855-23) 215 157 Website: http://www.ifc.org/mpdf VIENTIANE Nehru Road, Pathou Xay P.O. Box 9690 Vientiane, Lao P.D.R. Tel: (856-21) 450 017-9 Fax: (856-21) 450 020 Recognizing that aspiring businesswomen are often Gender- Entrepreneurship-Markets (GEM) prevented from realizing their economic potential International Finance Corporation because of gender inequality, IFC launched the Gender- 2121 Pennsylvania Avenue, NW Entrepreneurship-Markets (GEM) initiative in December Washington, DC 20433, USA Tel: (001-202) 473 1028 2004. The program aims to mainstream gender issues Email: GEM-info@ ifc.org into all dimensions of IFC's work, while at the same time helping to better leverage the untapped potential of women as well as men in emerging markets. If you would like more information on IFC GEM's work, please visit our website at: http://www.ifc.org/GEM