Our most recent member in Latin America, G&T Continental El Salvador, has a 25 percent share of the SME sector in the country. We spoke with Silvia Lorena Rubio, General Manager of G&T Continental, about the bank’s decision to join the Alliance, the successes and challenges of the implementation of their Women’s Market program, and her vision for the bank going forward.
GBA: How would you describe the current state of financial services for women in El Salvador?
Lorena Rubio: The financial system in El Salvador is very competitive. There are more than 13 banks that target retail customers and more than 40 MFIs that target the microfinance sector. Most banks target either the corporate sector or medium-sized enterprises, while MFIs target micro-entrepreneurs, the majority of whom are women-owned businesses. However, most of these institutions do not have comprehensive strategies that specifically target women.
GBA: Why did you decide to shift your focus to the SME sector as a bank? What does that approach consist of?
Lorena Rubio: Seeing a market opportunity, four years ago, the bank began to shift its focus to the SME sector. Because of its importance in the economy of our country, we found that the SME sector could generate good opportunities for growth and profitability. Since then, we have seen significant growth in our business. We started four years ago with a 10 percent market share; today we have a 25 percent share of the SME market. Our business lending portfolio is growing at an average annual rate of 20 percent, and the majority has been due to our focus on SME.
Our approach is based on service: Our business staff and loan officers are able to support SME owners in all aspects of the credit process. We have specialized analysts that understand small businesses and their sub-sectors, and are able to create a very personalized experience and provide relevant business advice. We provide clients personalized solutions based on their own realities.
GBA: Why is having a program that targets women specifically a strategic priority for G&T?
Lorena Rubio: Women make up 57 percent of the economically active population in El Salvador; however, the portfolios of banks in our country do not reflect these numbers. In this regard, women-owned SMEs represent for us a niche market that can generate loyalty in the long term, thus contributing to our growth and profitability.
With the assistance of the IDB/MIF, we launched a product called “G&T Mujer,” which is a financial solution specifically designed for women-owned businesses. Focusing on this segment, we believe, will increase our portfolio growth and generate significant cross-selling opportunities.
We are a very diverse bank: 59 percent of our staff is female, and we have a number of women in leadership positions, including myself, which is rare in the financial sector in our country. Therefore, we felt that it made sense for us internally, as we could better understand and serve the financial needs of women.
We discussed different market opportunities with the Multilateral Investment Fund and saw that no other bank was focusing on women. We were able to obtain financing as well as technical assistance through their Women Entrepreneurship Banking program.
GBA: What are the main issues facing women-run SMEs in El Salvador?
Lorena Rubio: We conducted a market study last year of women entrepreneurs and found that although most of them felt that they could access capital through a bank, many did not feel like they were being adequately served or supported. We found that many women entrepreneurs were balancing a variety of roles — as business owners, managers, mothers, in some cases single mothers — and therefore needed additional support.
Our research found that they needed help in two areas: First, although they knew how to sell a product, they did not necessarily know how to manage a business. They told us that they were reaching a point where they could not grow their businesses any more because they did not have the business know-how; for instance, they lacked the financial knowledge to be able to supervise a financial manager. Secondly, because many women-owned businesses are so small, they have very small sales and marketing budgets and are not able to access new markets and further their growth.
GBA: How did you design your women’s program to meet some of these needs?
Lorena Rubio: We have a specialized lending product that targets women. From a credit standpoint, this product is not different from other off-the-shelf products. Our strategy is based on providing a value-add service to the credit product that supports customers in the form of capacity building and access to markets. We set up a program that provides women entrepreneurs the business skills they need to run their businesses. In addition, we developed an online portal to allow them to create a business network and increase their market exposure with minimal expenditures. Women entrepreneurs can promote their products and buy and sell from each other to increase their access to new markets.
GBA: How do you categorize an SME as women-owned? And how do you track that in your MIS?
Lorena Rubio: We define SMEs based on annual sales: Small enterprises have annual sales between $100,000 and $1 million, and medium enterprises have sales between $1 million and $7 million. Women-owned businesses are those that have greater than 50 percent ownership by women, or those that have a woman chief executive or a woman as the main decision maker. We track that in our system in two ways: through the product line — where we are able to see how many women SMEs are customers of a product — and through the sex of the business owner.
GBA: Did you need to make any adjustments in your systems to be able to capture this information?
Lorena Rubio: We had to add a field to our loan application and to the MIS to make sure that we were capturing the sex of the business owner. Currently, the data that we have does not include our entire portfolio. We are able to track the data by product, but that could exclude women who have not taken out one of the loans we track and could still be business owners. We are working on upgrading our MIS to a more SME-specialized system and hope this will help us in collecting better data.
GBA: After one year of implementing your program, what have been the biggest successes? What have been the biggest challenges?
Lorena Rubio: Our program has been very well-received. Customers are seeing the bank not just as a source of financing, but also as a source of knowledge. This is creating further ties to the bank that will eventually lead to more business. We also have gotten a lot of media exposure and have been profiled in magazines and newspapers.
Customers in general are beginning to think of G&T as a bank for women. Women entrepreneurs highly value the non-financial services they receive from the bank, and it is a great market differentiator for us. The business development services have had great impact in that they empower women entrepreneurs, who now view themselves as professionals.
Just to give you a sense of the success, we had initially financed the program through a $5 million credit facility from the Inter-American Development Bank; last year we lent more than $18 million. Prior to the program, women-owned SMEs were only 2 percent of our total portfolio. After less than a year of implementing the program, this has grown to 6 percent.
In terms of challenges, the economic situation in El Salvador has been very difficult, with minimal growth in the last few years. This has created more competition between banks to retain the same clients. The challenge is to continue growing despite a less-favorable economic situation.
GBA: How did you find out about the Global Banking Alliance for Women? What inspired you to join?
Lorena Rubio: We heard about the GBA from the IDB. They told us about the benefits of being part of a global network from the time we began designing the value proposition.
GBA: What, specifically, are your hopes for your new membership in the Alliance?
Lorena Rubio: We think it is highly beneficial for us to be part of the Alliance. We can gain better tools and knowledge to strengthen what we are doing. We think membership in the GBA will give us a boost in our journey into the Women’s Market — and it already has. We attended the BLC Study Tour in Cyprus earlier this year. We saw a lot of parallels with what we were already doing. We also learned a lot of new things. For instance, the Study Tour opened our eyes in terms of thinking about other segments beyond SMEs. We think there is a lot of potential in our market in targeting different segments and expanding our offerings beyond credit, and have already started coordinating events in the local stock exchange to target new segments.
Finally, we also see a lot of benefit in being part of an organization that has our same values. Through our work, we believe we can make a global economic impact by supporting women entrepreneurs. In our country, many of these women are migrating overseas, and by supporting and empowering them we believe we can give them more reasons for them to stay.
—As told to the Global Banking Alliance for Women
| G&T El Salvador
AT A GLANCE
# of employees: 259
% female employees: 59%
# of full service branches: 15
# of clients: 16,240
% of female clients: 40%
USD value of outstanding loan portfolio: $312,828,000
USD value of deposits: $364,906,000
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