Enterprise Development for Women in Russia and Ukraine

By Jodi Koehn

"Women in Russia and Ukraine have been disproportionately affected--through high unemployment, underemployment, and a lack of mobility and opportunity--by the overall transformation in their societies, remarked Karen Sherman at a Kennan Institute lecture on 24 January 2000. Sherman, Vice President for Programs, Counterpart International, Washington, D.C. added that in addition to those economic constraints, women suffer from a number of gender constraints such as the need to find daycare and support their family, a feeling of inadequacy in necessary technical skills, and gender discrimination.

Many of the limitations women entrepreneurs face are the same constraints affecting entrepreneurs more generally in Russia and Ukraine. These constraints are associated with the lack of an enabling environment for small business development--lack of access to financing, heavy taxation on businesses, non-supportive legislation, and inconsistent enforcement of laws relating to small businesses. Sherman stated that a majority of women in both Russia and Ukraine reported that the macro-economic constraints were much more daunting than the gender constraints.

According to Sherman, a three-component strategy must be pursued to combat the problems faced by women in enterprise development. In the sphere of business training and technical assistance, business training programs help women with business planning and instruct them on the various aspects of managing a business.

The second component must be to provide access to credit. Sherman commented that women entrepreneurs have difficulty accessing the formal financial sector. In response, there is a need for both individual and group lending programs.

The final necessary component is the development of organizations to provide support services to women entrepreneurs over the long-term. Sherman noted that such organizations have already developed as a result of the technical assistance programs in the region and are part of the overall efforts to build such local institutions.

This general strategy treats women as clients, not as beneficiaries. According to Sherman, the goal of such programs is mainly to introduce women to the formal financial sector and make sure they are "mainstreamed" with other entrepreneurs. Sherman stressed the importance of including women with other entrepreneurs at their level so they can "graduate up" into the sector.

Sherman and her colleagues at Counterpart International conducted interviews with women entrepreneurs to assess the impact of such programs over the short-term. Of the women in Russia who had participated in business training and technical assistance programs, two-thirds stated that they had changed their way of doing business as a result of the training, one-third had increased the sales and employment in their business, nearly one-half had obtained external finances as a result of the training, and two women's business associations were created, reported Sherman. In addition, because of the networking and collaboration during these programs, some of the women formed business associations which have gone on to be sustainable organizations providing services to women entrepreneurs, Sherman argued.

In Ukraine, similar results were reported. Of the women participants in training and technical assistance programs, Sherman remarked that 55 percent were able to create a small business after the training, 65 percent noted changes in the operation of their business, 60 percent reported an increase in sales, income, and profit, and 500-700 new jobs were created.

According to Sherman, the most startling statistic is that 96 percent of the women--who often feel isolated and confused about how to get started, manage their business, and access technical assistance--reported an increase in self-confidence after the training. These training programs provide a forum and support mechanism for women to get the kinds of tools and resources needed to succeed in their businesses, Sherman commented.

Sherman argued that young women need to be targeted with training and technical assistance programs, and mentoring programs to "make them see the possibilities both for enterprise development and economic opportunities more broadly." According to Sherman, women's enterprise development provides options for women to support their family, overcome poverty, and gain economic independence.

One important result of these types of programs, Sherman concluded, is the self-confidence and self-respect that women gain and the feeling that they can be successful in society and in the economic transformation of their country. Such programs also give women hope and a stake in the future of their countries. Women have been active and successful as entrepreneurs, Sherman argued, and should continue to be supported.