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Pandemic further tightens funding for women

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By Jenina P. Ibañez, Reporter

BARRIERS to financing for Filipino women entrepreneurs have been aggravated by the pandemic, social enterprise incubator Villgro Philippines said.

While all businesses struggle to operate amid the pandemic, female-led businesses face delays in receiving funding, Villgro Philippines Chief Executive Officer Priya Thachadi said in an online interview on Wednesday.

“Women are disproportionately affected by the pandemic because now the responsibilities at home are more,” she said, referring to an unequal share of housework and childcare done by women.

“Along with running your business or working, you kind of have to manage that, you have to look after the people in your home.”

Villgro has spent the past 12 months speaking with women entrepreneurs and investors in the country.

Ms. Thachadi said women balancing multiple activities at home face barriers as raising money takes time.

“More women are starting and running businesses than ever before… so why do they not progress or advance when compared to their male-counterparts? Many times, to access formal financing, you need collateral, you need credit history, you need to show a certain threshold of revenue and many women-led (small and medium-sized businesses) actually don’t meet that to access formal financing.”

She said that women-led businesses are usually in industries like retail instead of technology, which attracts more venture capital and other investors.

“They don’t meet the definition of what investors say are high-growth or high-revenue generating industries or sectors.”

During the pandemic, the existing financing issues are exacerbated.

“In the start-up ecosystem and ecosystem for business is, whatever challenges there were before the pandemic have all become deeper. This is because the structures and systems are being stress-tested in this pandemic situation,” she said.

“For example, raising money takes a lot of time. You need to be speaking to investors, due diligence takes a lot of time, and it’s a much longer cycle. Which means that a woman who is balancing multiple things at home has to dedicate, spend even more time because now you have to convince investors, financiers your business can survive the pandemic and all of that takes much longer.”

Villgro in April and May conducted a survey of 36 Filipino women entrepreneurs who have identified significantly reduced operations, issues with mobility, closing market channels, and no cash flow as top issues during the pandemic. These were followed by challenges in declining customer demand, fundraising, and market uncertainty.

Among the respondents 28% said they need between P500,000 to P1 million in capital in the next six months while another 28% placed that need between P200,000 to P500,000.

Breaking down the importance of certain factors to their business, 27 said funding is the most important while 23 said access to market is the most important. A dozen each said they need a business mentor or an industry mentor.

The company is launching its “WE Rise” program to assist women-led businesses rebuild amid the pandemic by providing loan funding and mentorship.

“We really want to spend the first part of the program in rebuilding their business models, readjusting, assessing for the risks of the pandemic,” Ms. Thachadi, adding that the focus will then shift to improving internal financial management and growth in the next year.

The company is partnering with a major financial institution for a short-term collateral-free working capital loan between P100,000 to P500,000 with  interest. They plan to select 20 enterprises.





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