Notes from the Field

Hope for Afghanistan’s Women Entrepreneurs?

August 7, 2013

As the 2014 deadline for withdrawal of international forces from Afghanistan nears, concern is increasing that the fragile, hard-fought gains made by Afghan women will be rolled back. The World Bank has said the decline in foreign spending that comes with the shift will have a “profound and lasting impact” on Afghanistan’s economy. These realities will present even greater challenges for Afghanistan’s small group of women entrepreneurs and business leaders.

Afghan women entrepreneurs

While informal networks, such as women entrepreneurs participating in small roundtables and business conferences or attending various trade shows, are in place, they are somewhat ineffective because of the lack of follow up, particularly with business owners in the provinces.

Small and medium enterprises (SMEs) are a key economic driver of Afghanistan’s development. They constitute approximately 75 percent of the labor force and generate over 50 percent of GDP. However, Afghan-produced goods meet only a fraction of local demand. Afghan business owners struggle to obtain the capital, management advice, equipment, and technologies they need to grow their businesses. Women already play a major role in Afghan industries, such as agriculture, jewelry, carpets, and embroidery, but receive limited benefits.

The Asia Foundation hosted a women entrepreneur’s roundtable in July to discuss issues that Afghan women business leaders face. Eight Afghan women from various sectors, including a trading company, e-distance learning center, pharmaceutical industry, woodcarving, handicraft, and a fruits and vegetable company attended the roundtable. Representatives from the U.S. Embassy in Kabul, USAID, and the UN Women Program also participated.

The topics of discussion included networking strategies, running and managing SMEs, the role of government in promoting or deterring women in business, the effect of security on business, regional trade, and access to loans and financial support from banking institutions.

Networking strategies:

There was a consensus among participants that formal Afghan networks are very weak and that since businesses operate individually and on their own, the level of expectation for their support is low. One participant expressed her disappointment about the lack of government and Chamber of Commerce involvement. While informal networks, such as women entrepreneurs participating in small roundtables and business conferences or attending various trade shows, are in place, they are somewhat ineffective because of the lack of follow up, particularly with business owners in the provinces. Participants agreed that online groups and fora on both national and international levels would be helpful, and could serve as a channel for women entrepreneurs to share their viewpoints and address any issues related to their specific business.

Running and managing SMEs:

Participants also agreed that the general view and mentality of the Afghan people toward women entrepreneurs is challenging and unlikely to change in the short term. A woman entrepreneur has to prove her capacity to deliver products or services in a more assertive manner than her male counterparts. In order for women business owners to succeed, the general public’s perception has to change.

The panelists also discussed future goals for their businesses in the medium to long term. One participant expressed her desire to supply at least 10 percent of good-quality medicine to the Afghan population. Another participant said she aimed for her business to establish 30 e-distance learning franchise centers across the country over the next 10 years. Panelists agreed that Afghan women entrepreneurs needed to find better ways to compete with international traders and export companies currently providing products to Afghanistan, including from Pakistan and Turkey. Healthy international competition and products “made in Afghanistan” should be promoted and make more attractive to local customers.

Lack of transparency, access to loans:

Participants expressed their concern about widespread corruption in the government agencies that further blocks women entrepreneurs to take on business initiatives. Banking institutions provide loans; however, the conditions are not suitable for business owners due to the high interest rate, varying anywhere from 15-17 percent. Nepotism in the banking system is not uncommon and falsification of documents, including business licenses, was also worrisome to the panelists. The process of business license renewal was particularly slow, some believed purposely delayed, and prone to bribery and corruption. All participants agreed that as long as gender inequality in Afghanistan prevailed and major organizations and institutions remained governed by men, women-led businesses would not advance.

Role of government:

There was a clear consensus that the Karzai government should promote Afghan-made products and provide more support to SMEs. One of the major concerns expressed was that various products and services are being outsourced despite the fact that the Afghan business community is capable of providing the same quality of goods to local customers. Participants called for fewer imports to Afghanistan, and increased subsidies for women entrepreneurs. The difference between small and large businesses, when working with government agencies, should also be distinguished. Panelists agreed that awareness should be raised in the Parliament, as women Parliament members are not properly informed about the role, activities, and challenges facing women in the business community. Currently, there are no groups in the government that are lobbying for the rights of women in business.

Security impact:

Participants were concerned about the overall security situation post-2014 and the impact on their businesses. The withdrawal of foreign presence and aid has the potential to bring about challenges across the country; the increased level of violence in certain provinces does not only affect the businesses’ operation but also schools and universities, particularly for female students. One participant felt uneasy about 2014, as her business is entirely supported by foreign donors, and she was not optimistic as any cut in funds might lead to the collapse of her enterprise. A representative from the US Embassy attending the roundtable assured the participants of the Obama Administration’s commitment to Afghanistan, reminding that the transition in 2014 is related to military functions, not development projects. (Just last month, USAID announced a new five-year program is to strengthen women’s rights groups, boost female participation in the economy, increase the number of women in decision-making positions within the government, and help women obtain business skills.) Participants agreed that now and post-2014, Afghans will need to step up and take the lead.

Petra Dunne is The Asia Foundation’s associate of the Program Management Office in Afghanistan. She can be reached at pdunne@asiafound.org. The views and opinions expressed here are those of the individual author and not those of The Asia Foundation.

7 comments on this post:

  1. Fazlia Seraj:

    Hello Petra,
    Thank you for a very informative article. I run into your article while researching for a project that will involve helping small businesses run by women in Afghanistan. Your article helped me understand their issues and confirmed the hardships and lack of support these women face. What is the best way to contact you? I would like to get your advice on my project.

    Regards,
    Fazlia

  2. admin:

    Dear Abdulhaq Niazi,
    Thank you for your interest and readership. You may find this recent blog article on women entrepreneurs useful: http://asiafoundation.org/in-asia/2013/08/07/hope-for-afghanistans-women-entrepreneurs/. Or, visit our website for more information: http://asiafoundation.org/country/overview/afghanistan

  3. Dear Madam or Sir
    We would be much obliged to be updated with your meaningful activities for the women entrepreneurs in Afghanistan.
    Thank you
    Abdulhaq Niazi

  4. Hello Petra

    Afghan Businesswomen Association (ABA) is a non-profit, non-governmental, non-political organization of businesswomen who are involved in business activities all over Afghanistan.

    ABA is focusing on women issues , fighting for them and Advocate for their rights for further information please visit http://www.afghanbusinesswomen.org

    Dear Petra, As I read the articles regarding Afghan women I feel very happy that you issued in this website and I would like to thanks you .

    I hope we all hear about women success stories one day.Insha’Allah

    Best ,Mitra Rasul
    Director ,Afghan Businesswomen Association

  5. Dear Pasquale Florio:

    A fresh and good news is that the MoCI of Afghanistan in the structure of SME development directorate established a new working group named WSME, women SME. We try our best to conduct the first WSME working to complete the list of members and will have for the next three till five action plans with cooperation it self the WSMEs.

    regards

  6. Pasquale Florio:

    Dear Pedra, thank you so much for your article, I’m so interested in social affairs in Afghanistan.

    I’m actually working in Herat just to collect more and more stories regarding afghan women that eveyday have to face lot of challenges in a traditional male society.

    My project is to write a book about the real condition of afghan women and I need more and more evidence (positive and negative).

    Please write me at my email: uflo67@yahoo.it I need your help

    Sincerely
    Pasquale Florio

  7. Hi Peter,

    Thanks for sharing the article. It is understood that Afghanistan has a long way to go in terms of true women empowerment but these steps are encouraging and always welcomed.

    I pray that I start hearing some amazing stories from Afghanistan regarding women empowerment.

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