Wednesday 27th January 2016
Our most recent member in Southeast Asia, Banque Franco-Lao Ltd. was established in 2008 as a joint venture between BCEL, the first state-owned and largest bank in Lao P.D.R, and COFIBRED, as subsidiary of BPCE, the second largest banking group in France. In a highly competitive market, with nearly 40 banks for a population of 6.8 million, BFL is seeking to differentiate itself from the competition by focusing on women customers. In this interview, Guillaume Perdon, Executive Managing Director, spoke with the Global Banking Alliance for Women about the bank’s decision to join the Alliance, its hopes for the planned Women’s Market program and the role the bank plays in supporting women.
GBA: The percent of women-owned businesses in your customer base is impressive: 28 percent of all businesses, with 45 percent of small and medium enterprises (SMEs) are women owned, 43 percent of all businesses have a woman CEO (58 percent of SMEs), and 62 percent of all businesses have a woman in executive leadership (75 percent of SMEs). Can you provide us with some context as to why women are so well represented in business, as compared to other countries?
Guillaume: In Laos women play major roles in society, including in business and government, and are a keystone in the family. The society is in fact a matrilineal society, with property passed down through women. That is why women are so strongly represented in our business customer base.
GBA: One notices a higher percent of SMEs in your portfolio are women owned than are businesses overall. This is common globally, but are there any particular barriers that women in Laos face in terms of scaling their businesses?
Guillaume: Our research shows that the main barrier women face in growing their businesses is access to finance. Most of the SME businesses in Laos rely on their own cash flow to fund business expansion, and those that rely on finance pay high interest rates because the market is not developed. Women also tend to operate in sectors that have smaller firm sizes overall, including tourism, retail and education.
GBA: How would you describe the current state of financial services for women in Lao P.D.R.? Are there any differences in access, quality or customer experience from that of men?
Guillaume: Laos is quite similar to other developing countries, where women start by getting loans from the informal sector, and then they source financing from microfinance institutions. Many still do not have access to loans from banks, as banks here, like in many other countries, are analyzing loan requests according to rigorous processes and criteria that women may not meet.
There is no difference in how men and women are served, but in some ways women are not recognized by banks. The Women’s Market is not yet understood or known by banks in Laos, so we see an opportunity to develop the business. The International Finance Corporation (IFC) is supporting us to better address this market segment, and their estimates show a US$70 million to US$100 million credit gap per year in loans to women-owned SMEs in Laos.
GBA: What does BFL do currently to support women-owned SMEs?
Guillaume: We have a general SME program in place in which each SME client has a relationship manager who helps them with the loan application process. A year ago we launched a financing facility with a 50 percent guarantee from the IFC. This has helped us provide loans to women who would otherwise have not been eligible, either because they do not have the guarantees or because they are start-ups.
GBA: A lot of women business owners would be categorized as “start-ups.” Does BFL have a strategy for start-ups?
Guillaume: We take into account more than just collateral and the age of the business when making lending decisions. We also try to understand the business itself and the amount and tenure of the loan required to move it forward. We can lend to businesses that are less than 3 years old if they meet the right criteria, and for those that don’t, we help them to understand what they need to do to be approved in the future.
GBA: You are in the design phase of your Women’s Market program. Are you looking at other segments, beyond SME, for your program?
Guillaume: We are at an early stage of our gender finance program, having just completed focus groups to help us design a comprehensive program for women. We anticipate having the value proposition in place by the middle of June or July. We have not decided yet to go beyond SMEs – this depends on the results of the focus groups.
GBA: With just a 2 percent share of the banking market, why have a Women’s Market program?
Guillaume: In a country of 6.8 million people, there are close to 40 banks, compared to 21 when we opened in 2008. The top three banks have a 25 percent, 20 percent and 20 percent share, respectively, and the rest have an average market share of 1 percent each. In a highly competitive market such as this one, it is difficult to increase market share. There is currently no bank in Laos that offers anything specific for women, so for us, this project is one of the main strategies we have in the next 2 to 3 years to differentiate ourselves. Our goal is to go from 2 percent to 5 or 6 percent market share on the strength of our Women’s Market offering.
GBA: What will you do to gain buy-in from the staff around this strategy?
Guillaume: We are a young bank with a young and dynamic team open to new ideas and innovation. About 90 percent of our staff is under 30 years old, and 50 percent of our staff, including management, is already comprised of women. Because of these things, we think gaining staff buy-in should be easier for us. However these attitudes and any discrepancies will be understood more fully after our feasibility study.
GBA: What kind of policies did you put in place to achieve a 50 percent female workforce?
Guillaume: We don’t have a written policy that says we have to have X percent of women on staff or gender parity in salaries. However, the fact that we are a young company in a young country [with high levels of young women participating in the labor force] probably means that we hire more women organically. Nevertheless, I’m sure we are not perfect. A full analysis of our internal gender equality has yet to be done, and we may consider implementing a diversity program in the future.
GBA: How did you first hear about the GBA? Why did you decide to join?
Guillaume: We first heard about the Women’s Market opportunity from the IFC and started to work with them to develop our program. They mentioned the GBA to us during this process. I told the IFC that on the one hand, the Women’s Market opportunity sounds very convincing and motivating, but on the other hand, we don’t know what the business outcomes will be. They persuaded me to go to Lebanon to visit BLC Bank, where I was able to see what the business results actually are. [BLC Bank Assistant General Manager and GBA Board Chair] Tania [Moussallem] gave me more information about the GBA while I was there.
This association of best practice sharing is very important for us. It will help our journey be much more efficient by enabling us to learn from others’ experiences. It will also provide us with a vision and community support to move forward with our own program.