Webinar, ‘Banking on women’s empowerment in the ASEAN agricultural sector’, organized by Fair Finance Asia together with GRAISEA and Grow Asia on 30 March 2021

The dialogue, ‘Banking on women’s empowerment in the ASEAN agricultural sector’, organized by Fair Finance Asia together with GRAISEA and Grow Asia, brought together leaders from the private, public and civil society sectors to discuss about the existing gaps in enabling capital flows for women’s empowerment in ASEAN’s agriculture sector; the smart solutions and collaborative approaches to mitigate these challenges; and the important next steps to support women’s empowerment in agricultural value chains.

Here are our three key takeaways from the discussion:

Barriers to women’s financial access remains, setbacks to previous progress due to COVID-19

While some progress has been achieved in promoting women’s financial inclusion in Asia, several barriers still remain, most of these being highly embedded in cultural contexts.

Herni Ramdlaningrum, Program Manager of Perkumpulan PRAKARSA, while 49% of agricultural households in Indonesia are headed by women farmers, their official participation rate in the national agriculture sector, according to the national survey statistics, is only 20%. Therefore, even when women comprise the majority of workforce participation, as seen in the rice farming practices in Bali, women are not recognized in leading agricultural roles and positions as men are largely acknowledged as the owner of lands/assets and are named as titleholders in loan agreements.

This gender disparity calls for an urgent improvement in lending policies in ASEAN. Using the exemplar of Indonesia, Herni remarked that despite the efforts of financial institutions to improve access to financing by marginalized groups such as smallholder farmers, according to Responsibank Indonesia’s recent bank policy assessments, only 3 out of 11 banks actually had the policies explicitly in place to support and empowering women farmers in the agricultural sector.

COVID-19 increased the risks and challenges for banks due to widespread unemployment and overall decreased profitability of clients. Women customers have become disproportionately affected by these challenges, setting back progress previously achieved in promoting access for women’s financial inclusion. Financial institutions have an important role to redress such imbalance by providing access to women, especially those in the agricultural sector, who are largely responsible for family and community food security.

Innovative solutions to increase women’s financial inclusion, and the role of financial institutions and other partners in scaling them up 

Due to the pandemic, financial institutions are now focusing on digitizing business models. This could potentially enhance access to finance for women, but can also bring other challenges due to higher male mobile phone ownership compared to women in many parts of Asia, and limited access to high-speed internet connectivity. Ma. Aurora Geotina-Garcia, Chairperson of Philippines ASEAN Women’s Entrepreneurship Network (PhilWEN) suggested that financial institutions could further support the development of necessary infrastructures to scale up the digitization of banking and other business opportunities.    

Capacity building on financial literacy and addressing potential challenges related to accessing loans such as collaterals ae also important to conduct. For example, Financial Access, a research center focused on exploring how financial services can better meet the needs and improve the lives of poor households, recently conducted a capacity building training for financial institutions. The research aim was to enhance awareness on gender issues in agriculture and lending, and look at the role of women in households and farms

“Showcasing business cases on lending client behavior is also of importance to highlight empirical research proving that women have better repayment behaviors compared to men,” emphasized by Renee Corstens, Senior Agri-finance Advisor of Financial Access.

In rural agricultural lending during COVID-19, there is a huge need for access to finance by women. Renee further shared that some financial institutions shifted their focus from urban to rural client segments, but the challenge is that they are not always ready to serve these new markets as banking products and services are not yet aligned with the needs of agripreneurs. To address this challenge in Philippines, the Department of Agriculture introduced a lending program called ‘Expanded SURE Aid & Recovery (SURE COVID-19)’ to support agripreneurs in loans as operating capital for agriculture and fishery-based micro and small enterprises at zero interest, and payable for up to 5 years to ensure small business continue their operation and food supply during the pandemic. Another program is the Capital Access to Young Entrepreneurs, a digital platform to provide loans for working capital and fixed asset acquisition up to $10,000 at zero interest rate and payable up to 5 years. As another example, a program of the Department of Trade and Industry (DTI) of the Philippines called ‘COVID Response to Restart Enterprises (CARES)’ provides loans to micro and small agri-based enterprises to address the needs of their working capital, fixed assets and construction. Examples of other programs launched by the Philippines government agencies to address the needs of MSMEs can be seen in article ‘Supporting Business Recovery and Survival’ by Ma. Aurora Geotina-Garcia.

Need for harmonization of “good practices” and regulatory policies at the ASEAN level

Several ASEAN member states have already begun implementing some policies to actively promote the empowerment of women particularly those working in the agricultural sector. However, there is a need to bridge these initiatives for a more cohesive regional approach, for example in terms of policies and practices in financial inclusion and promotion of knowledge sharing and learning at national and regional levels. In light of the COVID-19 pandemic, national initiatives and regional initiatives should also be better supported to ensure food security across the region.

Ma. Aurora shared that PhilWEN suggested the governments could provide incentives to financial institutions that value and promote smart gender investing, such as extending their financing to and/ or providing support on technical training to women cooperatives. Regulators could develop and implement policies that increase women’s opportunities in local procurement to enable access to additional markets, in both traditional and e-commerce platforms, and enhance income streams for women agripreneurs.

As an example to highlight such regional collaboration, Grow Asia and International Institute for Sustainable Development (IISD) are preparing to launch the ASEAN Member State Policy Alignment tool for public use in April. This tool has been distributed to all ten ASEAN Member State Ministries of Agriculture by the ASEAN Secretariat, after being approved by relevant ASEAN Working Groups. This tool can be used by key stakeholders to structure their own interventions to align with the government’s policies and advocate their governments to move toward responsible practices during investment periods, including empowering women, shared by Erin Sweeney, Lead, Sustainable Investment & Inclusion of Grow Asia. The ASEAN Guidelines on Promoting Responsible Investment in Food, Agriculture and Forestry (ASEAN RAI) was adopted in 2018 to push for harmonized approach of ASEAN member states on practices for private investments in agriculture. One of the ten Guidelines focus on ensuring women’s representation and engagement in all the steps of investment process including original screening, consultation, implementation, monitoring and evaluation. The principles provide guidance to private investors themselves, CSOs, NGOs, communities and farmer groups about how each can contribute to ensure that the ASEAN RAI Guidelines are followed. Grow Asia and IISD are currently working closely together with FFA to ensure that the guidelines and tools are further tailored for more effective operationalization by financial institutions operating in the ASEAN region, and better harmonized with the Fair Finance Guide International (FFGI) Methodology.

The  2020 ‘Understanding financial flows to agriculture – Towards inclusive and responsible investments in the ASEAN region’ study showed that between 2014 and 2020 at least USD 45 billion in credit and USD 13.9 billion in investments were provided to selected agriculture companies operating in the ASEAN. It is imperative to ensure that this large amount of financial flows into ASEAN’s agribusiness sector is being deployed to support women’s economic empowerment such as through private sector-led initiatives that promote and accelerate women’s opportunities. Organizations and programs, such as Fair Finance Asia, Grow Asia and GRAISEA help encourage financial sector stakeholders to support women’s empowerment in the ASEAN’s agriculture sector, by steering the knowledge and enabling stakeholder dialogues.

You can watch the recording of the webinar here.

Resources from the speakers:

  • The financial flows study to ASEAN’s agri-business sector, developed by FFA and Oxfam – link
  • Data regarding credit score/repayment rates for women farmers vs men – link
  • Information on loans for agri-business provided by Philippine Department of Agriculture with zero interest during the Covid-19 –
  • Article by Ma. Aurora Geotina-Garcia, entitled “Supporting Business Recovery and Survival” –
  • Information on the ASEAN Guidelines on Promoting Responsible Investment in Food, Agriculture and Forestry (and to see the ASEAN Member State Policy Alignment tool, coming in April!) –
  • Results of polling questions 1-3 – link
  • FFA social media thread at Twitter – link