NOVEMBER 2020

MEKONG INSTITUTE

KHON KAEN, THAILAND

BASELINE STUDY REPORT

MARKET ACCESS THROUGH E-COMMERCE PROMOTION FOR WOMEN-LED SMES IN CAMBODIA, LAO PDR, MYANMAR AND VIET NAM

i

The Baseline Study on women-led SMEs in Cambodia, Lao PDR, Myanmar, and Viet Nam has

been conducted as part of a project “Market Access Through E-commerce Promotion for

Women-led SMEs”. Supported by the Korea International Cooperation Agency (KOICA), the

study report presents findings based on primary data collected through online surveys and

focus group discussions with relevant stakeholders and the review and analysis of the

available online literature.

ii

Study Team

Mr. Madhurjya Kumar Dutta, Director

Mr. Mohammad Halimur Rahman, MEL Specialist

Ms. Sanchita Chatterjee, Program Specialist

Ms. Than Tha Aung, Program Coordinator

Proposed Citation

Mekong Institute (2020). Baseline Study on the Market Access through E-Commerce

Promotion for Women-led SMEs in Cambodia, Lao PDR, Myanmar, and Viet Nam.

Mekong Institute

Mekong Institute (MI) is an Inter-Governmental Organization (IGO) working closely with the

governments of six countries, namely Cambodia, P. R. China, Lao PDR, Myanmar, Viet Nam,

and Thailand, to promote regional development, cooperation, and integration by offering

capability development programs across three cutting themes of Agricultural Development

and Commercialization (ADC), Trade and Investment Facilitation (TIF), and Innovation and

Technological Connectivity (ITC).

Address : 123 Mittraphap Road, Muang District, Khon Kaen 40002, Thailand

Tel. : + 66 (0) 43 202 411

Fax. : + 66 (0) 43 203 656

Email : information@mekonginstitute.org

iii

CONTENTS ACKNOWLEDGMENTS ................................................................................... VII ACRONYMS AND ABBREVIATIONS ................................................................... VIII EXECUTIVE SUMMARY .................................................................................... 1

CHAPTER 1: OVERVIEW ............................................................................ 3 1.1. Introduction ..................................................................................................................... 4

1.2. Purpose of the Study ....................................................................................................... 4

1.3. Scope of the Study .......................................................................................................... 4

1.4. Limitations of the Study .................................................................................................. 5

CHAPTER 2: LITERATURE REVIEW .............................................................. 6 2.1. Definition of SMEs ........................................................................................................... 7

2.2. Economic and Trade Situation in CLMV .......................................................................... 7

2.3. Women’s Participation in SMEs and Job Markets in CLMV ............................................ 9

2.4. Global Programs and Conventions for SMEs ................................................................ 11

2.5. Key Institutions and Initiatives for Women-led SMEs in CLMV .................................... 13

2.5.1. Cambodia ................................................................................................................ 13

2.5.2 Lao PDR .................................................................................................................... 18

2.5.3. Myanmar ................................................................................................................ 22

2.5.4. Viet Nam ................................................................................................................. 26

2.6. Application of E-commerce in CLMV............................................................................. 31

2.7. Challenges of Women-led SMEs for Market Access through E-commerce .................. 33

2.8. Impact of COVID-19 ....................................................................................................... 35

CHAPTER 3: METHODOLOGICAL AND ANALYTICAL APPROACH ................. 39 3.1. Methodology for the Selection of Priority Sectors ....................................................... 40

3.2. Methodology for the Baseline Survey ........................................................................... 44

3.2.1. Population, Sampling Techniques, and Samples .................................................... 44

3.2.2. Data Collection Methods and Tools ....................................................................... 44

3.2.3. Data Analysis Method ............................................................................................. 45

CHAPTER 4: SURVEY AND FGD FINDINGS ................................................. 46 4.1. Socio-demographic Characteristics of Survey Respondents ......................................... 47

4.2. Profile of Enterprises/SMEs .......................................................................................... 49

4.3. Domestic Sales, Exports and Imports ............................................................................ 50

4.3.1. Key Sectors of Domestic Sales and Exports ............................................................ 50

iv

4.3.2. Key Sectors of Imports ............................................................................................ 51

4.3.3. Country of Exports and Imports by the SMEs in CLMV .......................................... 51

4.3.4. Potential Linkage with the Market of the Republic of Korea ................................. 52

4.4. Impact of COVID-19 ....................................................................................................... 54

4.4.1. Reduction in Domestic Sales and Employees ......................................................... 54

4.4.2. Reduction in Exports and Imports .......................................................................... 55

4.4.4. Strategy adopted by the SMEs to cope with COVID-19 ......................................... 56

4.5. Marketing Channels and E-commerce Participation .................................................... 56

4.5.1. Use of own business website for e-commerce ...................................................... 56

4.5.2. E-market and Social media platforms used for reaching target customers........... 58

4.5.3. E-commerce Model applied by the SMEs............................................................... 59

4.6. Market Access Challenges Faced by SMEs using E-commerce ..................................... 61

4.6.1. Market Access Challenges Faced by SMEs ............................................................. 61

4.6.2. Influential Factors for Market Access through E-commerce ................................. 62

4.7. Services Provided to Women-led SMEs ........................................................................ 63

4.8. Capacity Needs .............................................................................................................. 65

4.8.1. Capacity Needs of Women-led SMEs in CLMV........................................................... 65

4.8.2. Capacity Needs of Government Organizations/Associations .................................... 67

CHAPTER 5: CONCLUSION ....................................................................... 68 ANNEXES ............................................................................................... 70

Annex 1: Survey Questionnaire for Women-led SMEs ........................................................ 71

Annex 2: Survey Questionnaire for Government Officials and Representatives from Women Business Associations ............................................................................................. 84

Annex 3: Sectors of Goods with High Export Potential ........................................................ 94

Annex 4: List of Products Women-led SMEs Domestically Sell or Export ............................ 97

Annex 5: List of of Products Women-led SMEs Import ...................................................... 106

Annex 6: List of Countries where CLMV SMEs Export........................................................ 109

Annex 7: List of Countries from where CLMV SMEs Import .............................................. 110

Annex 8: List of Products having Export Potential to Korea .............................................. 111

Annex 9: List of Top Products having Import Potential from Korea .................................. 116

Annex 10: References ......................................................................................................... 118

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LIST OF TABLES

Table 1: MSME Categorization by Employee Number in CLMV ................................................ 7

Table 2: Overall economic and trade profile of CLMV ............................................................... 8

Table 3: Origins and destinations of imports and exports for CLMV ........................................ 9

Table 4: E-commerce regulatory structure in CLMV ............................................................... 32

Table 5: Policy measures adopted by CLMV to contain effects of COVID-19.......................... 37

Table 6: Sectors with high export potential for goods from CLMV ......................................... 41

Table 7: Sectors with high export potential for services from CLMV ...................................... 41

Table 8: Broad classification of sectors of export interest from CLMV ................................... 43

Table 9: Country, age, and gender representation of the SME respondents .......................... 47

Table 10: Education level of SME respondents ....................................................................... 48

Table 11: Key sectors of domestic sales and exports by CLMV SMEs ..................................... 50

Table 12: Key Sectors of Imports by CLMV SMEs ................................................................... 51

Table 13: List of countries CLMV SMEs export to and import from ........................................ 52

Table 14: Key sectors of export potentials from CLMV to Korea ............................................ 52

Table 15: Key sectors of import potentials from Korea to CLMV ............................................ 53

Table 16: Coping strategies of SMEs for COVID-19 ................................................................. 56

Table 17: List of own websites for e-commerce ...................................................................... 56

Table 18: Screenshots of a few SME websites ......................................................................... 57

vi

LIST OF FIGURES

Figure 1: Women’s participation in small and medium firms of CLMV (%)............................. 10

Figure 2: Framework of ASEAN SME development: the competitive and dynamic pathway

and the inclusive pathway ....................................................................................................... 12

Figure 3: Country and gender of the respondents from governments and associations ....... 48

Figure 4: Reduction in domestic sales and number of employees by SMEs ........................... 54

Figure 5: Reduction in exports and imports by SMEs .............................................................. 55

Figure 6: E-commerce platforms used by SMEs ...................................................................... 58

Figure 7: E-commerce models used by SMEs .......................................................................... 60

Figure 8: Market access challenges faced by women-led SMEs .............................................. 62

Figure 9: Influential factors for market access through e-commerce ..................................... 63

Figure 10: Capacity support needed for women-led SMEs ..................................................... 65

Figure 11: Support needed by government and women business associations’ staff ............ 67

vii

ACKNOWLEDGMENTS

This baseline study report is an outcome of a close collaboration between the Trade and

Investment Facilitation (TIF) and the Monitoring, Evaluation and Learning (MEL) Departments

of Mekong Institute. Special thanks goes to Mr. Madhurjya Kumar Dutta, Director of TIF for

his invaluable technical guidance provided during the design and implementation of the

study, and Ms. Sanchita Chatterjee, Program Specialist and Ms. Than Tha Aung, Program

Coordinator of the TIF Department for their close involvement and immense support during

the conduct of the study by coordinating with relevant stakeholders, conducting desk review,

designing and conducting online surveys and focus group discussions (FGDs) with women-led

SMEs, women’s business associations and government officials from Cambodia, Lao PDR,

Myanmar and Viet Nam (CLMV). Thanks also go to the stakeholders who spent their valuable

time to provide inputs through the online surveys and shared their knowledge, experiences,

and suggestions on the implementation of the project through the surveys and FGDs so that

women-led SMEs from CLMV can maximize their benefits from the interventions of the

project as part of which the current study has been conducted.

The report contains highlights of the baseline status of women-led SMEs on employment,

exports and imports, main hurdles in increasing exports, and issues in technology adoption in

CLMV and, assessment of capacity needs towards increasing employment opportunities and

income through the development and expansion of exports by women-led enterprises.

Mohammad Halimur Rahman

Monitoring, Evaluation and Learning Department

Mekong Institute

November 2020

viii

ACRONYMS AND ABBREVIATIONS

AED - Agency of Enterprise Development Agency

ARID - Agency for Regional Industry Development

ASEAN - Association for Southeast Asian Nations

BOL - Bank of Lao PDR

B2B - Business-to-Business

B2C - Business-to-Consumer

B2M - Business-to-Marketing

CCI - Chamber of Commerce

CDB - China Development Bank

CDC - Council of Cambodia

CERP - COVID-19 Economic Relief Plan

CGF - Credit Guarantee Fund

CGS - Credit Guarantee Services

China - People’s Republic of China

CIC - Cambodia Investment Club

CLM - Cambodia, Lao PDR, and Myanmar

CLMV - Cambodia, Lao PDR, Myanmar, Viet Nam

CNCW - Cambodia National Council for Women

C2C - Consumer-to-Consumer

CWED - Capital Aid Fund for Women’s Economic Development

CWST - Cambodian Women in Science and Technology

DBR - Department of Business Registration

DIMEX - Department of Important and Export

DISI - Directorate of Industrial Supervision and Inspection

DTP - Department of Trade Promotion

FASMEC - Federation of Association for SMEs of Cambodia

FGD - Focus Group Discussion

FIA - Foreign Investment Agency

GDI - General Department of Taxation

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GDTP - General Directorate of Trade Promotion

G-PSF - Government-Private Sector Forum

HAWEE - Ho Chi Minh Association for Women Executives and Entrepreneurs

HNEW - Hanoi Association for Women Entrepreneurs

ICT - Information, Communication and Technology

IPC - Investment Promotion Center

KBZ - Kanbawaza Bank

KOICA - Korea International Cooperation Agency

Korea - Republic of Korea

LAO SME - SME Promotion of Association of Lao PDR

Laos - Lao PDR

LBWA - Lao Business Women Association

LNCCI - Lao National Chamber of Commerce and Industry

LDB - Lao Development Bank

LTP - Lao Trade Portal

LWC - Lao Women’s Union

MARC - Myanmar Access to Rural Credit

MEAF - Myanmar Women’s Affairs Federation

MEF - Ministry of Economy and Finance

MI - Mekong Institute

MIT - Ministry of Industry and Trade

MISTI - Ministry of Industry, Science, Technology & Innovation

MOC - Ministry of Commerce

MOF - Ministry of Finance

MOIC - Ministry of Industry and Commerce

MOLISA - Ministry of Labor-Invalids and Social Affairs

MOPFI - Ministry of Planning, Finance and Industry

MOTI - Ministry of Industry and Trade

MoVT - Ministry of Labor and Vocational Training

MoWA - Ministry of Women’s Affairs

MNCWA - Myanmar National Committee for Women’s Affairs

x

MPI - Ministry of Planning and Investment

MPTC - Ministry of Posts and Telecommunications

MSME - Micro, Small and Medium Enterprises

M2C - Manufacture-to-consumer

MYEA - Myanmar Young Entrepreneurs Association

MSWRR - Ministry of Social Welfare, Relief and Resettlement

MWEA - Myanmar Women’s Entrepreneurship Association

NBSP - Viet Nam Bank for Social Policies

NCWA - National Commission for the Advancement of Women Office

NSPAW - National Strategic Plan for the Advancement of Women

O2O - Online-to-Offline

ODOP - One District One Product

OVOP - One Village One Product

P. R. China - People’s Republic of China

SMECC - SMEs Development Central Committee

SMEDEC - SME Development Encouragement Council

SMEDF - Small and Medium Enterprise Development Fund

SMEDWC - SMEs Development Working Committee

SMEPDC - SME Development and Promotion and Productivity Committee

SMEPDO - SME Promotion and Development

SubCAW - Sub-Committees for the Advancement of Women

SIYB - Start and Improve Your Business

SYB - Start Your Business

TAC - SME Technical Assistance Centers

UMFCCI - The Republic of the Union of Myanmar Federation of Chambers of

Commerce and Industry

USA - United States of America

VARISME - Viet Nam Association of Rural Industrial Small and Medium Enterprises

VBARD - Viet Nam Bank for Agricultural and Rural Development

VBSP - Viet Nam Bank for Social Policies

VCCI - Viet Nam Chamber of Commerce and Industry

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VDB - Viet Nam Development Bank

VECITA - E-commerce and Information Technology Agency

VECOM - Viet Nam E-Commerce Association

VEWC - Viet Nam Women Entrepreneurs Council

VIETRADE - Viet Nam Trade Promotion Agency

VNASME - Viet Nam Association of Small and Medium Enterprises

VWU - Viet Nam Women’s Union

VYEA - Viet Nam Young Entrepreneurs Association

WDC - Women Development Center

WDD - Women’s Development Division

WEE - Women Economic Empowerment

WISE - Women’s Initiative for Startups and Entrepreneurship Viet Nam

YEAC - Young Entrepreneurs Association of Cambodia

1

EXECUTIVE SUMMARY The baseline study has been conducted by Mekong Institute (MI) as part of its three-year

capacity building project on “Market Access through E-Commerce Promotion for Women-led

SMEs” with the support of the Korea International Cooperation Agency (KOICA). The project

will be implemented from 2020 to 2022. It aims to increase employment opportunities and

income through the development and expansion of exports by women-led enterprises in

Cambodia, Lao PDR, Myanmar, and Viet Nam (CLMV).

The baseline study aimed to understand the status of CLMV women-led SMEs for designing

required capacity building activities under the KOICA project to enhance SMEs' knowledge

and skills and to identify areas in which women-led SMEs need additional support from

government agencies and women’s business associations.

The baseline study adopted a mixed-method approach. Data were collected between

September 24 and October 25, 2020. The study team conducted a desk review, online surveys

with women-led SMEs, women business associations, and government representatives to

collect data on the baseline status of employment, exports and imports, main hurdles in

increasing exports, issues in technology adoption in CLMV, and especially the capacity needs

of SMEs as well their supporting functions, i.e., business associations and government

agencies. A cloud-based online survey development software- SurveyMonkey was used for

administering the online surveys. To obtain an in-depth knowledge of exports and imports,

impacts of COVID-19, application of e-commerce and challenges, and capacity needs for

expanding market access through e-commerce, country-wise FGDs were conducted with

representatives of women’s business associations and representative SMEs from CLMV.

Among 114 women-led SMEs survey respondents, 90% were women, 5% were male, and 5%

were from another gender. A majority of the respondents were from Myanmar (46%) and

belonging to the age group 30-39 years (49%). Among 46 survey respondents representing

government officials and women’s business associations, most were from Myanmar (37%),

76% were female, and 24% were male.

A majority of the SME survey respondents were micro-enterprises (46%), while 33% were

small enterprises, 15% were medium-sized, and 6% were large enterprises. The SME

2

respondents reported their key export sectors being Food, beverage, and consumer goods;

Agricultural production and livestock; Beauty, cosmetics, and personal care; Textile, apparel,

footwear, leather, and accessories; and Furniture, furnishing, and household goods. Further,

the SMEs mentioned their key import sectors as Agricultural production and livestock; Food,

beverage, and consumer goods; Natural resources (forestry, oil, fuel, mineral, and other

mining products); Furniture, furnishing, and household goods; and Chemical, rubber, and

plastics.

A majority (32%) of the SME survey respondents reported decreased domestic sales by 41%-

60% since the onset of the COVID-19 pandemic. Overall, the SME respondents said they had

not experienced much reduction in exports, imports, or employee sizes. Both the surveys and

FGDs revealed that many of the SME respondents were micro-enterprises and involved food

businesses, who instead experienced increased sales post-COVID 19.

Regarding e-commerce participation, only 34% of the responded women-led SMEs reported

that they have their own websites, whereas 27% of the SMEs reported they use Alibaba, and

92% said they use Facebook.

The SME respondents identified a lack of information on export markets as the most critical

internal challenge and an underdeveloped digital and financial infrastructure in the country

as the most vital external challenge. The government officials and representatives of women’s

business associations reported supporting women-led SMEs of their countries on information

services and capacity building.

Most of the SME and FGD respondents emphasized the need for organizing training courses,

workshops, and business networking events related to SME development, trade promotion,

and e-commerce for enhanced market access and exports of women-led SMEs through e-

commerce.

3

CHAPTER 1: OVERVIEW

4

1.1. Introduction

Mekong Institute (MI) is implementing a three-year capacity building project on “Market

Access through E-Commerce Promotion for Women-led SMEs" with the support of the Korea

International Cooperation Agency (KOICA) from 2020 to 2022. The project aims to increase

employment opportunities and income through the development and expansion of exports

by women-led enterprises. The project expects to achieve its objective by a) enhancing the

quality, quantity, and relevance of business development services provided by trade

promotion organizations and b) increasing capacities of the women-led SMEs to identify and

integrate into the global markets for their products through utilizing e-commerce platforms.

1.2. Purpose of the Study

To understand the current status of women-led SMEs in CLMV, it was important to collect

information of a certain level to enable the project to contribute to i) enhanced capacities of

women-led SMEs, ii) facilitate additional support available to SMEs from women business

associations and government agencies, and iii) ultimately increase employment opportunities

and income through the expansion of exports by women-led enterprises through the

application of e-commerce.

1.3. Scope of the Study

The baseline study adopted a mixed-method approach. In the first stage, the study team

conducted a desk review of literature, reports, and relevant documents available online. In

the second stage, online surveys on i) women-led SMEs from selected sectors estimated to

have a high potential for exports from CLMV, and ii) relevant government officials and

representatives from women business associations in CLMV were conducted. The online

surveys collected data on the baseline status of employment, exports and imports, main

hurdles in increasing exports, issues in technology adoption in CLMV, and especially the

capacity needs of SMEs and their supporting functions, i.e., business associations and

government agencies.

The survey with SMEs focused on topics such as respondent profile, SME profile, domestic

sales and export profile, import profile, impact of COVID-19 on business coping strategies,

participation in e-commerce, linkages with the market of the Republic of Korea, challenges in

5

market access through e-commerce for women-led SMEs, and capacity needs of SMEs. The

online survey questionnaire has been attached at Annex 1.

The survey with women business associations and government agencies included topics such

as respondent profile, organization/association profile, support and services provided by the

organization/association to women-led SMEs, linkages with the market of the Republic of

Korea, assessment of legal, technological, infrastructural and other influential factors, and

capacity needs of SMEs, associations, and government agencies. The online survey

questionnaire has been attached at Annex 2.

In the third stage, four focused group discussions (FGDs) were conducted withpresentatives

of associations and SMEs respectievly for Cambodia, Lao PDR, Myanmar, and Viet Nam to

obtain in-depth information on particular topics and validate survey findings.

1.4. Limitations of the Study

• Enterprise-level business data for CLMV is not readily available online. Hence, the

literature review did not analyze or compare SMEs' business performances, especially

women-led SMEs.

• The study team used the lists of SMEs, government officials and business associations

provided by key women business associations' from CLMV for conducting the surveys.

• Due to the COVID-19 situation, the study used online survey techniques instead of visiting

the respondents in their countries and conducting face-to-face interviews. The survey team

had to communicate with the potential respondents several times to ensure their

participation, which ultimately led to a delay in the data collection timeline.

• The timeline for the study was very tight. Moreover, due to the delay in online data

collection, less time was available for data cleaning, analysis, and report writing.

• Since the project did not identify specific indicators to measure its expected results, the

baseline study could not set the base status for the indicators.

6

CHAPTER 2: LITERATURE REVIEW

7

2.1. Definition of SMEs

In the Mekong region, there is no harmonized definition for micro, small and medium

enterprises (MSMEs). Further in each country, there are several definitions of SME based on

the number of employees, the value of sales, the value of assets or capital, or a combination

of these factors, the economy's size, and the nation's economic development level. The most

commonly used variable is the number of employees (Abe, M. & Dutta, M., 2014).

Table 1 mentions existing definitions of MSMEs in Cambodia, Lao PDR, Myanmar, and Viet

Nam (CLMV). Except in Cambodia, the SME categorization based on employees vary between

sectors.

Table 1: MSME Categorization by Employee Number in CLMV

MSME Category

Number of Employees by Country Cambodia Lao PDR Myanmar Viet Nam

Micro ≤ 10 1 - 5 Not defined ≤ 10

Small 11 - 50 6 - 50 ≥ 30 11 - 100

Medium 51 - 100 51 - 99 31 - 600 51 - 200

Source: OECD/ERIA (2018)

The OECD has defined SMEs as those enterprises having fewer than 250 employees.

Accordingly, enterprises which have fewer than ten employees are mico enterprises, 10 to 49

employees are small enterprises, 50 to 249 employees are medium enterprises, and 250 or

more employees are large enterprises (OECD, 2017).

2.2. Economic and Trade Situation in CLMV

CLMV are classified as lower-middle-income countries (UN 2020). Relevant economic

indicators for these countries such as GDP, GDP per capita, trade per capita, trade as

percentage of GDP and rank in global exports and imports of goods and services have been

provided in Table 2.

8

Table 2: Overall economic and trade profile of CLMV

Countries

GDP (million current

US$, 2018)

GDP per

capita (US$, 2016-2018)

Trade per

capita (US$, 2016-2018)

Trade (%

GDP, 2016-2018)

Rank in world exports

Rank in world imports

Goods Services Goods Services

Cambodia 24,523 1,390 1,087 78.2 81 80 81 99

Lao PDR 18,434 2,566 935 36.4 110 134 117 138

Myanmar 68,559 1,259 306 24.3 76 81 78 87

Viet Nam 241,272 2,360 2,359 100 26 53 23 46

Source: World Trade Organization

As illustrated in Table 3, for Cambodia, manufactures dominate both exports and imports; the

European Union (EU) is the leading destination of exports, and China is the primary source of

imports.

Manufactures dominate imports of Lao PDR, but fuel and mining products, manufactures, and

agricultural products dominate exports. The main destinations of exports are China and

Thailand, and the primary source of import is Thailand.

In Myanmar fuel and mining products, manufactures, and agricultural products dominate

exports, and manufactures dominate imports. The main destinations of exports are China,

Thailand, and other countries, and the primary sources of import are China, Singapore, and

other countries.

Manufactures dominate Viet Nam’s exports and imports. Viet Nam’s primary sources of

import are China, the Republic of Korea, and other countries. The main destinations of export

are the United States, the European Union, and other countries.

9

Table 3: Origins and destinations of imports and exports for CLMV

Share of Imports from Other Countries to CLMV

Cambodia Lao PDR Myanmar Viet Nam Origin (2016)

% Origin (2016)

% Origin (2018)

% Origin (2017)

%

China 36.8 Thailand 61.9 China 32.2 China 27.5 Thailand 15.4 China 18.2 Singapore 19.1 Korea 22.0 Viet Nam 11.4 Viet Nam 10.1 Thailand 13.4 Japan 7.9 Taiwan 5.7 Japan 2.2 India 5.1 Taiwan 6.0 Singapore 4.6 Korea 2.0 Indonesia 4.8 EU 5.7 Other 26.1 Other 5.6 Other 25.4 Other 30.9

Total 100

100

100

100 Share of Exports from CLMV to Other Countries

Cambodia Lao PDR Myanmar Viet Nam Destination

(2016) %

Destination (2016)

% Destination

(2018) %

Destination (2017)

%

EU 39.9 China 36.1 China 33.3 USA 19.3 USA 21.3 Thailand 31.3 Thailand 18.3 EU 17.8 Japan 8.2 Viet Nam 17.2 EU 16.0 China 16.5 China 6.1 EU 5.0 Japan 8.3 Japan 7.8 Canada 6.5 India 2.8 India 3.4 Korea 6.9 Other 18.0 Other 7.6 Other 20.7 Other 31.7

Total 100% 100% 100% 100%

Source: World Integrated Trade Solutions (WITS), World Bank

2.3. Women’s Participation in SMEs and Job Markets in CLMV

Women-led SME could mean SMEs managed by women or SMEs owned by women. Data

shows the gender participation rate in enterprises in CLMV is quite varied. Overall, women’s

participation in ownership, management, and full-time permanent workers is higher in small

firms than in their medium-sized counterparts. Figure 1 illustrates the percentage of women’s

participation as workers, top management, and ownership in small and medium firms of

CLMV.

The highest participation of women in SME ownership was in Viet Nam, and in the top

management was in Cambodia both for small and medium firms. However, in terms of the

10

proportion of full-time female staff, Lao PDR held the top spot for small firms, and Myanmar

for medium firms.

Figure 1: Women’s participation in small and medium firms of CLMV (%)

Source: World Bank Enterprise Surveys for Cambodia (2016), Lao PDR (2018), Myanmar

(2016), and Viet Nam (2015)

The literature review suggested that female managers' percentage is higher in the service

sector, mostly because of higher presence of female managers in the retail than

manufacturing sector. Further, the proportion of female managers in retail vis-à-vis

manufacturing is much larger for relatively smaller firms (which corresponds to the findings

of the Enterprise Survey data as mentioned in Figure 1) and firms located in the somewhat

smaller cities. (Amin & Islam 2014)

OECD (2014) found women remain under-represented as entrepreneurs in the OECD. One of

the main challenges when considering how to boost female entrepreneurship is the lack of

solid, reliable, and timely data.

52

50

57

52

51

35

0 25 50 75 100

Small firms

Medium firms

Small firms

Medium firms

Small firms

Medium firms

Small firms

Medium firms

Cam

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aLa

o PD

RM

yanm

arVi

et N

am

WOMEN'S PARTICIPATION IN SMALL AND MEDIUM FIRMS OF CAMBODIA, LAO PDR, MYANMAR AND VIET NAM (%)

Proportion of permanent full-time female staff (in %)

Percent of firms havingfemale top manager

Percent of firms with femaleownership

11

A few studies have looked at the performance of women vs. men-led SMEs. Most studies

conclude that women managers are less experienced than their male counterparts in many

cases, especially in the manufacturing sector. However, overall women-led SMEs tend to

outperform those led by men.

There are more women among workers than in top management and any evidence of a link

between labor productivity and gender presence in the management is weak (Amin, 2014).

Female managed firms have lower labor productivity than their male counterparts because,

in general, female managed firms “do not protect themselves from crime and power outages,

have their own websites, and are (co-) owned by foreigners” (Islam et al., 2018). Further, in

the manufacturing sector, female-managed firms are less capitalized and have lower labor

costs than their male counterparts.

Using firm-level data for 73 developing countries, Amin & Islam (2015) found strong evidence

countries with a higher proportion of top female managers also have higher enrollment rates

for women relative to men in primary, secondary, and tertiary education. Moreover, a

significant relationship was found between human capital and financial capital on the

performance among women entrepreneurs in business (Abiodun & Amos, 2018).

Common barriers that limit opportunities for women to establish, manage and grow an

enterprise are policy development, coordination and implementation, access to finance and

credit, capacity development, and social and cultural norms (UNESCAP 2013). The education

level, capital, and cultural factors determine women entrepreneurs’ success and performance

(Saidi et al., 2017).

2.4. Global Programs and Conventions for SMEs

SMEs and women-led enterprises have been a focus of several global, regional, and sub-

regional level initiatives. E-commerce, in particular after the onset of COVID-19, has also

attracted increasing attention. Following a decision of the United Nations (UN) General

Assembly in 2017, every year June 27 is celebrated as Micro-, Small and Medium-sized

Enterprises Day to raise public awareness of their contribution to sustainable development

and the global economy.

12

Apart from this, there are ongoing initiatives taken by various branches and division of the

UN such as the Enterprise Development Branch of UN Conference on Trade and Development

(UNCTAD), supporting small and medium industry clusters initiative of UN Industrial

Development Organization (UNIDO), Women's Leadership in Small and Medium Enterprises

of the World Bank, World Bank Group Support for Small and Medium Enterprises (SMEs)

among others.

The ASEAN has adopted Strategic Action Plan for Small & Medium Enterprise (SME)

Development (SAP SMED) 2016-2025 which aims to create globally competitive, resilient and

innovative Micro, Small & Medium Enterprises (MSMEs) seamlessly integrated to ASEAN

community and inclusive development in the region by 2025. The SAP SMED is a part of the

ASEAN Economic Community (AEC) Blueprint 2025 which aims to have a highly integrated and

cohesive ASEAN economy that is competitive and dynamic with enhanced connectivity, and

resilient, inclusive, people-oriented, and people-centered.

The above diagram illustrates the role of SMEs in building the ASEAN Economic Community.

Source: Yuri Sato (2015)

Figure 2: Framework of ASEAN SME development: the competitive and dynamic pathway and the inclusive pathway

13

2.5. Key Institutions and Initiatives for Women-led SMEs in CLMV1

2.5.1. Cambodia

It is estimated that Cambodia has considerably a high concentration of micro-sized women-

owned enterprises operating informally. Despite its slow pace in economic reforms, the

Government of Cambodia has made gradual advances in strengthening institutional and

policy framework for women empowerment and SME Development over the decades. The

National Strategy is known as Government Rectangular Strategy Phase IV: 2018-20232

embedded “Promotion of SMEs and Entrepreneurship” under “Rectangle 3: Promotion of

Private Sector Development and Employment”. The National Industrial Development Policy

(2015-2021) also mentioned “promoting SMEs” as the policy's second pillar.

i) Women Economic Empowerment (WEE)

Strategy, Policy, and Laws Lead Agency

• Strategic Plan Neary Rattanak V • The Cambodia National Council for Women

(CNCW) is the advisory mechanism to the

Government of Cambodia to promote the status

and welfare of women.

• The Ministry of Women’s Affairs (MoWA) is the

spearheading body for promoting women's

leadership in all aspects of society. In cooperation

with relevant line ministries and international

development partners, MWA has been carrying out

various women empowerment activities.

Women's economic empowerment (WEE) is a

considerable measure under MoWA that promotes

women’s entrepreneurship through vocational

1 OECD (2017). Strengthening Women’s Entrepreneurship in ASEAN “Towards increasing women’s participation in economic activity” 2 http://cnv.org.kh/wp-content/uploads/2012/10/Rectangular-Strategy-Phase-IV-of-the-Royal-Government-of-Cambodia-of-the-Sixth-Legislature-of-the-National-Assembly-2018-2023.pdf

http://cnv.org.kh/wp-content/uploads/2012/10/Rectangular-Strategy-Phase-IV-of-the-Royal-Government-of-Cambodia-of-the-Sixth-Legislature-of-the-National-Assembly-2018-2023.pdfhttp://cnv.org.kh/wp-content/uploads/2012/10/Rectangular-Strategy-Phase-IV-of-the-Royal-Government-of-Cambodia-of-the-Sixth-Legislature-of-the-National-Assembly-2018-2023.pdf

14

Strategy, Policy, and Laws Lead Agency education and training programs. Additionally,

MoWA is running The Women Development

Centers (WDC) are to provide business

development services to women-led SMEs across

the nation.

Areas for Improvement: Although Cambodia is making certain progress in the legal

framework for gender equality, more efforts are required to break the traditional gender

norms at a personal level. The WDCs are working on the development of rural women

enterprises through vocational training and income generation activities. Since 2016 the

ministry has been improving the WDCs’ staff's competency through ToT training, ICT training,

and other related skill development training. Yet, the centers' capacity, including the number

of skilled trainers and resources in the WDCs, was reported to be inadequate.

Key Stakeholders and Other Initiatives: Women Entrepreneurs Association (CWEA) is a non-

government platform furthering women's interests in businesses and providing business

development services such as training, consultancy services, and networking opportunities.

The social enterprise, SHE Investments (launched in 2015), is another remarkable entity that

is breeding women entrepreneurs through incubation, acceleration, and networking

programs. The WECREATE Center is a well-known Start-up Academy providing a 15-week free

mentoring and business training to help female entrepreneurs.

ii) SME Development

Strategy, Policy, and Laws Lead Agency

• SME Development Framework3

(Phase III)

• The Ministry of Industry, Science, Technology &

Innovation (MISTI), formerly known as the Ministry

of Industry and Handicraft (MIH), is the sub-

committee for 18 ministries working with SMEs in

different industries.

3 https://www.mef.gov.kh/documents/PFM/7cg_document/draft_outline_sme.htm

https://www.mef.gov.kh/documents/PFM/7cg_document/draft_outline_sme.htm

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Strategy, Policy, and Laws Lead Agency

• The General Department of SMEs and Handicraft

is the coordinating agency for SME initiatives. The

department launched a movement known as One

Village One Product (OVOP) to stimulate SME growth

in Cambodia.

• Besides MISTI, SMEs have to deal with the

following ministries for the business registration and

taxation process.

1. The Ministry of Commerce (MOC): The

Department of Business Registration under MOC is

responsible for SME registration.

2. The Ministry of Economy and Finance (MEF):

General Department of Taxation (GDT) under MEF

manages the taxation to SMEs.

• The Ministry of Labor and Vocational Training

(MoVT) oversees the workforce and labor markets;

the SMEs require official permission from MoVT for

their business operations.

• The Government-Private Sector Forum (G-PSF),

established in 1991, is the mechanism to dialogue

between government and business communities.

The Council of Development of Cambodia (CDC) is

the secretariat of the forum.

Areas for Improvement: The Government of Cambodia undertook several positive measures

to ease regulatory procedures. Yet, some of them have not yielded much success. For

instance, the government announced to give a 2-year tax exemption of business profit to

SMEs that registered with GDT in the period of 2017-2018. It was to encourage the

16

formalization of the enterprises. However, SMEs were reluctant to get into the system mainly

due to the fear of paying penalties if they do not pay other taxes.

Key Stakeholders and Other Initiatives: The Cambodia Chamber of Commerce (CCI) is the key

association representing the private sector. There are also other associations such as the

Federation of Association for SMEs of Cambodia (FASMEC) and Young Entrepreneurs

Association of Cambodia (YEAC).

iii) Trade Promotion and E-Commerce

Strategy, Policy, and Laws Lead Agency

• Trade Integration Strategy (CTIS)

(2019-2023)

• E-commerce Law and Consumer

Protection Law (2019)

• General Directorate of Trade Promotion (GDTP)

and other departments under the Ministry of

Commerce (MOC) support SMEs with providing

market information, export-import information,

facilitating their participation in the trade fairs, and

managing the quality of products and services.

• Go4eCam, launched in early 2020, is a move of

MOC to develop e-commerce in Cambodia. The MOC

cooperates with the Ministry of Posts and

Telecommunications (MPTC) for creating an enabling

environment for E-commerce activities in Cambodia.

Areas for Improvement: The MOC launched an online platform for SME registration in

cooperation with relevant line ministries. It was to facilitate the SMEs in processing business

documents, including tax certificates in digital forms. Yet, the system is not stable; the users

often found errors while using it. Additionally, Cambodia is yet to develop its online payment

options.

Key Stakeholders and other Initiatives: Cambodian Women in Science and Technology

(CWST) Facebook community offers seminars and forums to women working in ICT. Other

prominent entrepreneurship programs initiated by non-government entities are BIO

17

Accelerator Program, SHE Investments, Techo Startup Center, Impact Hub Phnom Penh, Small

World Cambodia, and The NUM Social Innovation Lab.

iv) Financing

Lead Agency

• The Ministry of Economy and Finance (MEF) is managing financial access to SMEs. The

Khmer Enterprise and Skill Development Fund are the significant other moves of MEF

targeted for SME development.

• The SME Bank, with the capital of USD 100, was officially opened in April 2020. The

interest rate is 7 percent. It aims to provide refinancing loans to the FIs and direct loans to

SMEs.

• The Rural Development Bank, which has been in place since 1998, has been supporting

small-scale farmers in rural areas.

Areas for Improvement: Cambodia has a dynamic financing system with little interference

from the government. Nonetheless, limited access to finance is still a problem as the owners

have low financial literacy, business planning skills, and low awareness of the government's

service.

Key Stakeholders and Other Initiatives: The Cambodia Investment Club (CIC) is an excellent

private model that provides loans to SMEs and offers business development programs. There

are above 40 microfinance institutions, including unregistered small service providers and

hundreds of informal credit schemes.

18

2.5.2 Lao PDR

The Government of Lao PDR has taken various quality steps in narrowing gender gaps at all

societal levels. The legal framework has no discrimination against women's participation in

businesses. Studies found that women in rural areas encountered more impediments in

accessing legal protection for their rights generally. Then, women's businesses are mostly in

the pink economy, such as handicrafts, dressmaking, retailing, and food-processing sectors.4

i) Woman Economic Empowerment

Strategy, Policy, and Laws Lead Agency

• National Strategy for

Advancement of Women (2016-

2020)

• Gender Equality Strategy of

Agriculture, Forestry and Rural

Development Sector (2016-2025)

• The Lao Women’s Union (LWU), established in

1955, is the mass organization that plays a crucial

role in policy advocacy and development. It has more

than 6000,000 women members. The LWU delivers

“Start Your Business” (SYB) training to women.

• The National Commission for the Advancement of

Women (NCAW), established in 2012, is the front

body to promote women’s participation in society

and women’s rights. It is presided by the President of

the Lao Women’s Union, the Prime Minister’s Office,

the Minister of Public Health, and the Vice Minister

of Education. The 16 commission members include

all vice-ministers of line ministries and mass

organizations. Sub-Committees for the

Advancement of Women (SubCAW) are placed

across the country to implement policies for realizing

gender quality in Lao PDR.

4 http://mekongbiz.org/wp-content/uploads/2017/07/Lao-PDR-Business-Formalization.pdf

http://mekongbiz.org/wp-content/uploads/2017/07/Lao-PDR-Business-Formalization.pdf

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Areas for Improvement: Lao PDR is one of the top countries with a high representation of

women (27.5% in 2018) in the national parliament.5 Notwithstanding, men mostly occupy the

decision-making level in the ministries. “Gender Equality Strategy of Agriculture, Forestry, and

Rural Development (2016-2015) is a special gesture to employ gender mainstreaming in

works of different ministries. In achieving the objective, the government needs to equip the

staff with more substantive knowledge such as gender-responsive budgeting, gender-

sensitive policies, and plans.

Key Stakeholders and Other Initiatives: The Lao Business Women Association (LBWA) is

increasingly playing an essential role in promoting women-led SMEs due to its support to

members for providing capacity development activities, market information, and networking

opportunities.

ii) SME Development:

Strategy, Policy, and Laws Lead Agency

• SME Development Plan (2016-

2020)

• Law on SME Promotion, 2011

• SME Development and Promotion and Productivity

Committee (SMEPDC) and its Standing Committee

provide advice directly to the government. Half of

SMEPDC’s members come from the private sector,

including the Lao National Chamber of Commerce and

Industry (LNCCI). The LNCCI is the main advisory body

for public-private dialogue.

• The SME Promotion and Development Office

(SMEPDO) is the main body for promoting SMEs'

establishment and sustainable development.

• To reinforce SMEPDO, The Ministry of Industry and

Commerce (MOIC) coordinates SME project

implementation. Like Cambodia, Lao PDR also has the

One District One Product program (ODOP) movement

to promote local small businesses.

5 https://gggi.org/site/assets/uploads/2018/10/Gender-and-Green-Growth-Policy-Brief-Lao-PDR.pdf

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Strategy, Policy, and Laws Lead Agency

• The Ministry of Finance (MOF) grants licenses to

SMEs.

Areas for Improvement: Lao businesses were found to be mostly small and informal. Studies

revealed that the procedures for formalizing businesses in Lao PDR are cumbersome. It took

more than two months to complete the process. The one-stop services opened in 2008 to

ease the business, and the tax registration process has not worked out properly. The MOIC

has simplified the registration process conducive to the small businesses following the Prime

Minister’s Decree in 2018.

Key Stakeholders and Initiatives: Aside from LNCCI, The SME Promotion of Association of Lao

PDR (LAO SME) is the leading platform representing the voice of SMEs. GIZ, the INGO, is also

supporting SME Development in Lao DPR.

iii) Trade Promotion and E-Commerce:

Strategy, Policy, and Laws Lead Agency

• The Trade Facilitation Road Map

(2017-22)

• Consumer Protection Law (2010)

• Telecommunications Law (2011)

and electronic Law transactions

(2012)

• Law on Standardization (2014)

• Law on Prevention and

Combating of Cyber Crime (2016),

• National Payment System Law

(2017) and

• Amendment on IPR Legislation

(2018)

• Department of Trade Promotion (DTP) under

MOIC is in charge of trade promotion activities.

• Lao Trade Portal (LTP) is hosted by the

Department of Important and Export (DIMEX) under

MOIC to provide import-export information and

regulatory requirements. The DIMEX also initiates

the local e-commerce platforms.

• The Ministry of Post and Telecommunications

(MPT) is in charge of developing ICT policies and

programs.

21

Areas for Improvement: To facilitate the local enterprises' market growth, the government

has embarked on systematic trade promotion strategies such as Strategy on Export of Lao Silk

and Cotton Handcrafts and Export Strategy on Products from Local Talent for supporting

market access of the local enterprises. The 10-Year Development Strategy (2016–2025)

mentions e-commerce development as one of the priority areas. Several laws have been

enacted to promote e-commerce.6 Many studies suggested Lao PDR eradicate informal fees

along the economic chain to improve trade activities.

Key Stakeholders and Other Initiatives: There are around ten enterprises promoting

entrepreneur’s development in Lao PDR. The most famous ones are the ANANTA incubation

program and TOH-LAO Coworking Space.

iv) Financing:

Lead Agency

• Lao Development Bank (LDB) provides loans to SMEs. However, in practice, the primary

borrowers are mainly from large enterprises. The tendency to lend money to SMEs is low

due to the perception of high risk.

• LWU has a microfinance fund for women and sponsors around 3100 women’s savings

groups, a significant source of financing for women entrepreneurs.

Needs for Further Improvement: Lao PDR scored high in stepping up for easing access to

finance with its introduction of an online collateral registry in 2016. Since then, there has

been no visible improvement in furthering its financing efforts. There is a lack of risk capital

system in Lao PDR. Most businesses started by using their own capital.

Key Stakeholders and other initiatives: In 2019, the Bank of Lao PDR (BOL) brought in ten

commercial banks to receive a USD 300 million loan from China Development Bank (CDP) to

expand SME Loan Support Programs.

6 https://www.eria.org/uploads/media/E-commerce-Connectivity-in-ASEAN/16_Chapter-12_E-commerce-Development-in-the-Lao-PDR_Some-Policy-Concerns.pdf

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2.5.3. Myanmar

Myanmar is a latecomer in the structural reform for economic development. In comparison

with other regional countries, its institutional and legal frameworks are still in infancy. The

Myanmar Sustainable Development Plan (MSDP) 2018-2022 stated that “quality, inclusivity

and women’s empowerment” is at the center for development policies as cross-cutting

considerations.

i) Women Economic Empowerment:

Strategy, Policy, and Laws Lead Agency

• The National Strategic Plan for

the Advancement of Women

(NSPAW) (2013-2022)

• Myanmar National Committee for Women’s

Affairs (MNCWA) works with gender focal points

from nine different line ministries.

• Women’s Development Division (WDD), Ministry

of Social Welfare, Relief and Resettlement

(MSWRR) is the national mechanism for supporting

women, including participation in economic

activities.

Key Areas for Improvement: Myanmar’s labor laws mentioned equal pay for similar work.

The new land law in 2016 also states that both men and women are entitled to land allocation,

management, inheritance, and succession. Nevertheless, the studies unfolded that women

were unaware of their rights.7 Moreover, the presence of women-led SMEs is found lowest

in machinery and repair services. It was the outcome of internalizing traditional gender roles

since young girls are not encouraged to experiment with machines and tools.

Key Stakeholders and Other Initiatives: Myanmar Women’s Entrepreneurship Association

(MWEA) is furthering women's business interests by participating in dialogues with the

government and supporting the members through various business development services.

Some of the collaborative initiatives of MWEA consisted of providing training to micro women

entrepreneurs in rural areas in partnership with NCWA and the 6-month long project W

7 https://www.spf.org/global-data/user53/WED_ILOSPF_2019_v13_FINALonline.pdf

https://www.spf.org/global-data/user53/WED_ILOSPF_2019_v13_FINALonline.pdf

23

incubator training for women start-ups in collaboration with Project Hub Yangon. Myanmar

Women’s Affairs Federation (MEAF), founded in 2002, provides social and economic

assistance to disadvantaged women and girls.

ii) SME Development:

Strategy, Policy and Laws Lead Agency

• SME Development Policy and

SME Development Law (2015)

• SME Development Rule (2016)

• Myanmar SME Development Agency is

responsible for creating a sound eco-system by

providing technological assistance, capacity

assistance, and financial assistance. Furthermore,

the regional government is also running the SMEs

Sub Agencies to support the local SMEs effectively.

• The President leads the SMEs Development

Central Committee (SMEDCC), and the Vice

President oversees the SMEs Development Working

Committee (SMEDWC).8

• The Directorate of Industrial Supervision and

Inspection (DISI) under the Ministry of Planning. DISI

is in charge of issuing licenses to SMEs and running

the SMEs Development Centers to provide technical

and financial assistance to SMEs. Thus far, there are

53 branches throughout the country.

Areas for Further Improvement: In 2018, Myanmar’s Central Department for SME

Development developed a one-year action plan for Women’s Entrepreneurship. Yet, there is

no budget allocation for the plan. Furthermore, there is no clear distinction of roles and

responsibilities between the departments under MOFPI and the SME committee's different

bodies. The SME also found the formalities time-consuming. Other predicaments are

8 https://www.msme.gov.mm/en/page/background-and-history

https://www.msme.gov.mm/en/page/background-and-history

24

acquiring land, lack of necessary infrastructures such as power supply, water, and low

technology level.

Key Stakeholder and Initiatives: The Republic of the Union of Myanmar Federation of

Chambers of Commerce and Industry (UMFCCI) is the association bridging between the

government and private sector. The Myanmar Young Entrepreneurs Association (MYEA) is

emerging as a network-hub for entrepreneurship development.

iv) Trade Promotion and E-commerce:

Strategy, Policy, and Laws Lead Agency

• Digital Economy Road Map

(2018-2025)

• Telecommunications law (2013)

• Consumer Protection Law (2019)

• Trademark Law (2019)

• The government is drafting e-

commerce laws.

• The Department of Trade Promotion (DTP)

under the Ministry of Commerce (MOC) is

responsible for trade-related services.

• Alongside with MOC, The Ministry of Post and

Telecommunications (MPT) is working on E-

commerce development.

• DISI under MOPFI launched digital payments for

SME registration through its website in May

2020.The registration fee is K 5,000 (around 5 USD)

for small enterprises and K 10,000 (around 10 USD)

for medium-sized enterprises.

• The COVID-19 Economic Relief Plan (CERP)

issued on 27 April contains five action plans for e-

Commerce in its 5th Goal, and MOC is assigned as

the focal ministry to implement them in a short

period.

Areas for Improvement: Despite its export potential, the current proportion of export GDP

in Myanmar is relatively lower than its regional counterparts; many works yet to do to realize

the potential. In terms of technological application, there is also a huge digital divide between

25

men and women. It is contributing to the lower number of women-SMEs employing

technology in businesses. The number of women in technologial education also needs to be

promoted.

Key Stakeholders and Other Initiatives: There are only a few incubators, accelerators, and

co-working spaces for entrepreneurs, namely, Impact Hub, Lithan Tech Up, Myanmar ITC

Development Cooperation (public-private), Phandeeyar, Rockstart Impact Spring Accelerator,

and UMG Ideal lab incubator. Moreover, some non-government or private sector-led

initiatives cooperate with the government to improve ICT education. Some of them are the

“Empowering Women and Girls through Mobile Technology in Myanmar" project led by

UNESCO, GSMA60 Connected Women Program, and Ooredoo Geek Girls Myanmar Project by

private mobile operators.

iv) Financing:

Lead Agency

• The Small, Medium Enterprises Development Bank (SME-Development Bank), formerly

known as Myanmar Industrial Development Bank (MID Bank), is functioning as a financial

institution to address SMEs' needs.

• There is also the Credit Guarantee Insurance Scheme (CGIS) provided by MOPFI. It offers

collateral-free loans at a guarantee fee of 3 %.

• Myanmar Agricultural Development Bank (AGDB) is lending money to farmers and

livestock breeders.

• Myanmar Economic Bank (MEB) is also providing SME loans prioritizing the

manufacturing sector.

Needs for further improvement: Myanmar is still in its very early stage for financial, credit,

and insurance system development. Unsurprisingly, bank Financing represents only a small

fraction of the funding available to MSMEs. Bank Loans in Myanmar need collateral and

permission from the spouse for the married individuals to borrow money against collateral.

The conditions are not very favorable to women-led SMEs’ access to finance and credit. The

26

majority of start-ups, thus, rely on their family savings or assets.9 Nonetheless, Myanmar

SMEs also depends upon informal money lenders as a common practice.

Key Stakeholders and other Initiatives: Among the private banks, Kanbawaza Bank (KBZ) is

the only one that supports women’s empowerment explicitly. The 2016 report by Nathan

Associates mentioned that 38 percent of KBZ’s loans went to women-owned businesses. BG

Microfinance is a private company targeting women using the group lending method with10,

000 borrowers. The Private Agencies Collaborating Together (PACT)’s Myanmar Access to

Rural Credit (MARC) Project has a micro-credit component specifically for women who want

to expand a nonagricultural activity or start a new enterprise. PACT microfinance initiatives

also help women form collaborative savings and credit groups. Numerous INGOs and NGOs

are running micro-finance projects in Myanmar.

2.5.4. Viet Nam

Viet Nam is the front runner in women-led SMEs compared to its CLM counterparts. The

results could be attributed to the government’s expediting efforts to improve SME

development's institutional framework, which indirectly encourages greater women

participation. Since the release of the new SME law in 2017, the government supports the

formalization of the informal enterprises where many women exist. Nonetheless, a lot of

work remains to be done to break the gender barriers, particularly in applying state ownership

rights where women are found to be at a disadvantage.

i) Women’s Economic Empowerment:

Strategy, Policy and Laws Lead Agency

• National Strategy on Gender

Equality (2011-2020)10

• The Viet Nam Women’s Union (VWU),

established in 1930, operates under the Party's

leadership. Its mandate is to protect women's rights

and strive for gender equality. There are

approximately 13 million members in the union. The

9 https://pedl.cepr.org/sites/default/files/RPwc%201786%20KapteynWah%20ChallengesToSmallAndMedium-SizeBusinessInMyanmar.pdf 10http://www.chinhphu.vn/portal/page/portal/English/strategies/strategiesdetails?categoryId=30&articleId=10050924

27

Strategy, Policy and Laws Lead Agency

VWU School for Women Cadres set up a “Women

and Enterprise” faculty to provide women

entrepreneurship training.

• Department of Gender Equality, the Ministry of

Labor, Invalids, and Social Affairs (MOLISA) is the

leading agency to mainstream gender policies in

cooperation with different line ministries.

Needs for Further Improvement: The national strategy envisages to reach the rate of female

entrepreneurs at 30% by 2013 and 35% or higher by 2020. The VWU executives’ movements

such as “Women help each other develop the household economy” and “Doing savings

following Uncle Ho” have created many businesswomen. Nonetheless, the gender pay gap is

still persistent in Viet Nam. Women's wages are 77% of what men earn for the same job.11

Women still have less chance to reach high-level positions compared to men. Ethnic women

groups have the least access to legal protection and opportunities.

Key Stakeholders and Other Initiatives: A growing number of social enterprises and non-

government actors build the eco-system for promoting women's leadership in economic

activities. An academy formed in 2016, known as WECREATE Start-up Academy, provides a

15- week free start-up training and mentoring to help women launch a start-up or expand a

business. The Viet Nam Women Entrepreneurs Council (VWEC) participates in training

provision to women entrepreneurs in cooperation with VWU. The Hanoi Association for

Women Entrepreneurs (HNEW), The Ho Chi Minh Association for Women Executives and

Entrepreneurs (HAWEE), and The Women’s Initiative for Startups and Entrepreneurship Viet

Nam (WISE) also offer free training and consultations to female entrepreneurs and supports

their start-up efforts. SoGal Viet Nam is another renounced platform that provides advisory,

coaching, mentorship services, and start-up resources to help launch women’s venture ideas.

11 https://www.worldbank.org/content/dam/Worldbank/document/VID2013_Guideline_EN.pdf

https://www.worldbank.org/content/dam/Worldbank/document/VID2013_Guideline_EN.pdf

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ii) SME Development:

Strategy, Policy, and Laws Lead Agency

• SME Law (2017-2018)

• The Investment Regulations

(2018)

• The SME Development Encouragement Council

(SMEDEC) is the policy formulation body.

• The different units under the Ministry of Planning

and Investment (MPI) are in charge of implementing

SME policies, particularly in technical services.

• The Agency of Enterprise Development Agency

(AED) is steering the SMEs support programs.

Investment Promotion Center (IPC) under Foreign

Investment Agency (FIA) developed an SME

database in 2017 and support matching businesses

between Local SMEs and foreign enterprises.

• The SME Assistance Centers (TAC) are located in

the three central regions, such as Hanoi, Hochi

Minh, and Da Nang are responsible for providing

business development services, including

information services, technical advice, and training

service. There are also SME support agencies in

every province, and 50 out of 63 provinces-initiated

SME projects in 2019.

Needs for Further Improvement: The 2017 SME Law outlines supportive measures such as

incentive, credit access, land rental preferences, and human resource development. For

instance, SMEs are entitled to a lower cooperate income tax than the standard rate for certain

period. The World Bank’s report on Ease of Doing Business, Viet Nam scored relatively low on

“starting a business indicator” at 121 out of 190 economies. Additional concern for SMEs in

Viet Nam is the competition from FDI that are ahead in technology and resources.

Furthermore, even though the government is providing business development services to

SMEs, public awareness towards the services is found to be low.

29

Key Stakeholders and other Initiatives: Viet Nam has a vibrant business membership

environment. The Viet Nam Chamber of Commerce and Industry (VCCI) is a tight-knit

community that safeguards the members’ interests and support one another. One of its

numerous programs includes running Start and Improve Your Business (SIYB) clubs. The other

eminent associations are the Viet Nam Association of Small and Medium Enterprises

(VNASME), Viet Nam Young Entrepreneurs Association (VYEA), Viet Nam Association of Rural

Industrial Small and Medium Enterprises (VARISME).

iii) Trade Promotion and E-commerce:

Strategy, Policy, and Laws Lead Agency

• Supporting industry

enhancement policy in 2011

• Decree on online payments in

2012 and E-commerce in 2013 and

e-payment is under development

• The Ministry of Industry and Trade (MOTI) is the

front mechanism for assisting in industry support

areas, including market access for SMEs.

• Viet Nam Trade Promotion Agency (VIETRADE)

under MOI assists SMEs in product marketing and

business matching activities. The Agency for Regional

Industry Development (ARID) supports executing

local industry promotion policies. Viet Nam E-

commerce and Information Technology Agency

(VECITA) carries out e-commerce development.

Needs for Further Improvement: Concerning the legal framework, specific support for the

use of e-commerce by SMEs has not been clearly defined yet. Yet, e-marketplaces are

booming in Viet Nam, such as WeFit, Foody, Tiki, Sendo, Lotte, and Lazada. The Viet Namese

people have a low trust level on digital payment and logistics services up to date.

Furthermore, the service rate of logistics services is perceived to be expensive.

Important Stakeholders and Other Initiatives: In Viet Nam, various business associations

such as VWEC, HAWASME, Da Nang Women's Business Club are active; they organize trade

missions, trade fairs, and trade exhibition for their members. The Viet Nam E-Commerce

Association (VECOM) is the leading association to monitor and review policies and laws

30

related to digital platforms and related issues such as digital currency, transaction, consumer

protection, and disputes.

iv) Financing:

Lead Agency

• MPI supervises small and Medium Enterprise Development Fund (SMEDF).

• Viet Nam Bank for Social Policies (VBSP), a major MFI, provides credit programs for poor

and near-poor households and microenterprises in rural, remote areas.

• The Credit Guarantee Schemes (CGS) under the Viet Nam Development Bank (VDB) has

been in place since 2001.

• The Credit Guarantee Fund (CGF) operates under the local government agencies in Viet

Nam.

Areas for Improvement: In 2020, Viet Nam received a high ranking of 25 in “getting credit”.12

Yet it was found that Banks providing commercial loans prefer to allocate their resources to

larger firms rather than SMEs. The banks are hesitant to deal with SMEs due to higher default

risks, lack of financial transparency, and lack of mortgage assets. Thus, credit access remains

a major concern for the Viet Namese SMEs. Regarding women’s access to financing, the IFC

study finds that the financing gap at US 1.19 billion for women-owned SMEs throughout Viet

Nam. Since land in Viet Nam is usually used as collateral, many women entrepreneurs cannot

meet this requirement because their names are not included on the state-issued land use

right certificates.

Important Stakeholders and Initiatives: The Capital Aid Fund for Women’s Economic

Development (CWED), a member of Mekong Microfinance Organization, serves poor and

disadvantaged groups in Tien Giang and neighboring provinces. CWED helps the women who

would like to run their small businesses but do not have enough capital and cannot access

commercial banks or other financial organizations. The union also operates several women's

development funds under its umbrella that deliver microfinance to women. It provides a

12 https://www.doingbusiness.org/content/dam/doingBusiness/country/v/VietNam/VNM.pdf

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collective guarantee that enables women to access subsidized credit from domestic banks,

such as the Viet Nam Bank for Agricultural and Rural Development (VBARD) and the Viet Nam

Bank for Social Policies (VBSP).

2.6. Application of E-commerce in CLMV13

E-commerce or electronic commerce implies a set of business activities (namely buying and

selling products) using electronic media. Electronic media may be websites, web portals,

social media, and emails.

Different e-commerce actors or stakeholders are e-commerce service providers (e.g., Lazada),

e-commerce platform providers (such as IT companies), banks/payment system providers

(e.g., PromptPay in Thailand), suppliers (or sellers), logistics service providers (i.e.,

transporters, shippers, warehouses among others), governments (for ensuring legislation,

policies, infrastructure, etc. are in place), and consumers.

The status of e-commerce (i.e., whether booming or not, any issues) in a country depends on

factors such as economic development in a country (determines purchasing power),

distribution of economic growth within a country (determines purchasing power of rural

populations), internet availability among potential customers, the status of logistics and other

supporting infrastructure, policy and regulatory environment and social diversity and political

culture.

E-commerce entails several risks such as customer disputes, online security (hackers, cyber-

criminal, spam, etc.), credit card fraud, reliability of the system (e.g., server crash, error in

payment, bugs), privacy issues (customer data may be comprised, data protection laws in

different countries may differ), change in search engine optimization (SEO) by Google and

others without notice, problems with warehousing and logistics, taxation issues, intellectual

property issues related to website design, photos, product description, logos, products,

videos, music, and the return of goods (i.e., reverse logistics), etc.

13 Content of this section is based on presentations on e-commerce in various trainings organized by MI and papers published by MI

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Table 4 shows that Cambodia, Lao PDR, and Myanmar are in the early stage of developing a

regulatory and policy structure on e-commerce. Viet Nam is slightly ahead in this respect.

Table 4: E-commerce regulatory structure in CLMV

Country Status

Cambodia New e-commerce law; early stage of development

Lao PDR Early stage of development on e-commerce; law on electronic transactions

Myanmar Early stage of development

Viet Nam Regulatory framework on e-commerce and electronic payments; encourage

cashless transactions; regulatory framework for e-payments being developed

Source: MI Compilation (2020)

In CLMV, particularly in CLM, the e-commerce sector faces several issues such as:

• Digital payments due to lack of digital literacy, lack of trust in digital platforms and

transactions, high cost of internet services, and so on.

• Payment-related issues in CLM because of less developed online payment systems, poor

financial literacy, and lack of trust in the financial systems, etc.

• Lack of efficient postal services

• Limited number of logistics service providers

• Poor road infrastructure

• Inadequate logistics solutions

• Farmers and entrepreneurs in rural areas need training on skills such as the use of mobile

phones, mobile banking, use of e-commerce platforms, etc.

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2.7. Challenges of Women-led SMEs for Market Access through E-commerce

The rise of women-led SMEs in the CLMV countries has led to studies to shed light on the

different experiences or more difficult hurdles faced by women-owned SMEs compared to

their male counterparts. It is a fact that most SMEs in the CLMV countries have inadequate

access to financial support and limited capacity and skills to realize their full potential.

Nonetheless, female-led SMEs encounter a double-burden compared to their male

counterparts due to pervasive structural barriers, i.e., traditional social norms and practices.

Even though the growing number of women-led SMEs is a sign of progress in the CLMV

economies, most women are expected to continue their traditional roles as primary home

caregivers. Since most micro and small business owners cannot afford to hire housekeepers

or childcare and elderly-care providers, they have to juggle between business and household

chores. Thus, women are at more disadvantage in terms of tapping opportunities to grow

their businesses.

Informality: Women starting a business in CLMV countries fall into two groups: majority

driven by necessity and minority driven by choice. Most of them are also concentrating in

retail, service, tailoring, cosmetics, and food processing sectors. The majority started their

ventures using their savings or borrowing money from informal moneylenders. Their

businesses are also informal in nature. Their decision to stay informal and small is owed to

the lack of capital to purchase materials and skilled staff, as well as a lack of confidence to

expand their markets. An ADB report (2017) stated that 96 percent of women-owned SMEs

in Cambodia were informal and micro-sized, which is a similar pattern found across Viet Nam,

Lao PDR, and Myanmar. Even though the governments’ policies are encouraging more SMEs

to register, women have a higher tendency to find government formalities complicated, fear

increased taxes, and have little awareness over the benefits they could receive. Thus, their

informal status hinders them from accessing finance, business development services, and

legal protection in general.

Less Familiarity with Technology and Little Time to Upskill: Technology advances are seen

as an advantage to working mothers to circumvent physical mobility barriers and solve work-

home conflicts. Yet, women in the CLMV countries cannot unlock this as most of them,

particularly in rural settings, hold little digital education. Although the gender gap in

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education is narrowing in the subregion, women lag behind men in technological aptitude. As

a consequence, women are unfamiliar with emerging digital tools to implement their

ventures. The digitalization of the economy calls for women to allocate time for learning new

skills to stay relevant. Yet, it is a challenge for working mothers who commit their after-work

time to their children.

Less Networking: Networking is undoubtfully a cornerstone for business growth. SME owners

use social events to build their reputations and find opportunities, including finding referral

partners and clients for their development. Given the work-family interface, women have less

privilege of being engaged in social after-work gatherings and leveraging their connection for

scaling up their firms.

Customary Practices for Property Ownership: In CLMV countries, women legally hold equal

financial and property inheritance rights as men. Married women do not need to obtain

consent from their husbands to register their businesses. However, cultural and customary

practices prevent women from claiming these rights. For instance, in Viet Nam, the 2013 law

reform mentions that both spouses have rights and ownership of houses and other land-

attached assets. However, wives have hardly tried to include their names on ownership

certificates due to low awareness of legal reform. In Cambodia's case, given its traditional

code of conduct for women known as Chbab Srey, women usually leave all property decisions

to their husbands. As a result, they lost their property right if a divorce occurred. In Myanmar,

landownership certificates are required to be signed by the head of households that

traditionally happened to be the husbands. Lao families pass the rights of ownership verbally;

thus, women are not legally protected when a problem occurs. Such cultural practices have

important implications over women-led SMEs’ receiving formal loans, which often need

collateral requirements.

Among the other challenges faced by women entrepreneurs are (Justin Raj et al. 2018):

• Lack of awareness about government schemes for women such as subsidies or exemptions on interest rates on loans

• Competition from men-led enterprises

• Low creditworthiness, fewer properties registered in their names

• The difficulty of retaining customers

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• Lack of business knowhow

• Limited exposure to innovative practices that could help with product differentiation

• Few opportunities to upgrade business and technical skills or gain access to business

networks outside of family and friends

• Lack of capital for expansion, and

• Low levels of confidence to take measured risks.

All the factors described above compounded more challenges to women-led SMEs in CLMV

countries to access financial and non-financial resources critical for expanding their markets

and scaling up their firms.

2.8. Impact of COVID-19

In minimizing the pandemic's effect, many countries have imposed lockdowns and social

distancing measures of various degrees, which disrupted economic activities. GDP in

emerging economies is projected to contract, on average, by 3.2 percent in 2020. This

contraction is unmatched by any other crisis on record (UN 2020).

The COVID-19 Business Impact Survey by ITC (2020) analyzed the pandemic's impact on 4,467

companies in 132 countries. Nearly two-thirds of micro and small firms said the crisis strongly

affected their business operations and one-fifth of SMEs, and they might be shut down

permanently within three months. Women-led firms operate in many of the industries

severely affected, such as accommodation, food, retail, and wholesale. 64% of women-led

firms reported their business operations are strongly affected, compared with 52% of men-

led companies.

Another survey showed that the pandemic has accelerated the shift towards more

digitalization and brought about changes in online shopping behaviors (UNCTAD 2020).

Among other reports, UNDESA (2020) suggested that the pandemic might scale back years of

progress on poverty, hunger, health care, and education. It has affected the world’s poorest

and most vulnerable people the most.

In Asia-Pacific, the pandemic has added risks that the region already faces (such as natural

hazards, conflicts, and fragility). The population groups with pre-existing vulnerabilities have

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been particularly severely affected as the health crisis has turned into a humanitarian and

economic crisis (UNDP 2020).

There have been several discussions and studies on the impact of COVID-19 on global value

chains (GVCs). UNESCAP (2020) said in this regard that policy options are limited for small

actors (SMEs) in GVCs; still, it is important to prioritize assertive policy responses to short-

term problems and forward-looking recovery and closer regional cooperation.

The COVID-19 pandemic has impacted the economies of the Mekong sub-region in different

ways. As per Asian Development Bank (ADB), the GM countries are significantly affected since

they have strong trade and production linkages with P. R. China and receive a significant share

of tourists from P. R. China, which generate substantial income through this sector (ADB

2020). Among the more adversely affected populations have been SMEs, workers from the

informal sector, and women (UN Women 2020). Further, there are concerns that there would

be scaling back commitments and investments for environmental sustainability during the

recovery period14.

COVID-19 brought about a boom in e-commerce aro