Wednesday 13th May 2015
On Friday May 22, Türk Ekonomi Bankasi (TEB) launched its Women’s Market program calling it simply TEB Women Banking. This launch is particularly exciting for GBA because TEB already specializes in supporting small business owners, offering a wide range of financial and non-financial services for every stage of the business lifecycle. Superimposing a women’s angle on an already world-class system of capabilities offers Turkish women an extraordinary opportunity while promising a global best practice case for growing women’s businesses. GBA sat down with Meral Guzel, Former Senior Manager of TEB Women Banking, to ask her about the program, why it was designed the way it is and what her hopes are for it
GBA: Why women and why now for TEB?
Meral Guzel: Ten years ago TEB decided to make a real play for the SME segment, rather than focus on the corporate customer it had targeted up until then. The bank really thought through what SMEs needed to grow and introduced a range of non-financial services that include information dissemination, capacity development, consulting/mentoring and networking. We now have 1 million SME clients with 6.4% of the SME lending market and are poised to grow to 10% by 2018.
That said, one sees a stubborn issue in the market and that is that while the number of MSMEs doubled in the past 10 years, the share of microenterprises (defined as businesses that make less than US$1 million in revenue per year) only moved from 97% to 93%. In fact, of the 300,000 firms established every year, roughly 200,000 close within 12 months, and we have 60,000 surviving at the end of 5 years. About three years ago TEB made a decision to develop an accelerated learning and networking offer for start-ups. This has been very successful, and TEB Women Banking is another example of a program targeted at new segments of entrepreneurs.
GBA: What are some of the key ways the start-up program differs from the regular support services TEB gives business owners?
Meral Guzel: The start-up program has two target groups. The first is businesses that are less than 1 year old and are more of the traditional SME types, such as cafés, restaurants, auto repair and other workshops, manufacturing, and retail. The second target group is tech companies: mobile applications, digital games, solutions to service company needs. These are less than 3 years old. The tech companies have access to a comprehensive set of services from business incubators to networking connections to venture capital here and in Silicon Valley. To qualify, there is a rigorous selection process. We’ve developed screens that measure entrepreneurial capability, for example.
GBA: Fascinating. So why women now?
Meral Guzel: Women in Turkey are very much under-represented in business, and we believe we have the capabilities to really support women business owners to grow their businesses, unlock their economic potential and change perceptions in the process.
GBA: Tell us what the research said about women’s needs.
Meral Guzel: We conducted focus groups in five cities around the country from Istanbul to Gaziantep. We wanted that spread because we are very keen to serve areas that are challenging and underserved now, as well as the bigger metropolitan areas of Istanbul and Ankara. We found uniformly that women are very hard working and very dedicated to their businesses but had a number of different obstacles in growing their businesses. First, on the finance side, they often do not have the collateral required to get a loan. In Turkey banks often ask for a mortgage/property title, and usually that is in the name of the husband, so that’s an issue. Women also said that banks are not there for them when starting a business, and a lot of them were using relatively expensive products such as consumer credit to finance their businesses. They really want respect from banks and to trust that the bank understands them and supports them. They also have naysayers in their families and really have to be strong to overcome that; they need their confidence built up. That’s related to the challenge of balancing business and household responsibilities. They also need access to markets and to know-how.
GBA: Were there any surprises for you that came out of the research?
Meral Guzel: This was not a surprise per se, but we found that women are really keen to learn and to grow, and view their business as their independence. Our findings are totally in line with the ABCs of global gender finance: Turkish women entrepreneurs do not dare to approach a formal financial institution in the first 2-5 years of their businesses because of the lack of collateral, so they tend to rely on family financial support or their own savings, if possible. They also cannot follow a continuous education program because of household responsibilities outside of their work, and networking is a real challenge. But the biggest constraint for female entrepreneurship in Turkey is, without doubt, gender discrimination that pushes women out of the business life and creates many obstacles for them when building their enterprises. This was expressed unanimously during all the focus groups in all the different regions we have been.
GBA: What are you doing around access to capital?
Meral Guzel: With the support of EBRD we are able to offer a business loan without collateral of up to 75,000 TL (US$28,500). Beyond that, we’ve innovated around using gold as collateral and pulled together a product bundle that is both more cost effective for women to use than what is currently available to them and has additional benefits. We have some very nice features that will build loyalty. We also have a starter checkbook, which will help them build up their credit history.
GBA: That’s interesting. Tell us why a checkbook helps build up credit history.
Meral Guzal: Checks in Turkey must be honored by the issuing bank under financial sector regulation. Therefore, when a bank gives a customer a checkbook, it is effectively guaranteeing the total value of all the checks in the book. We’re introducing a checkbook with five checks as a starter product for them, and they can use it to establish that credit history with us.
GBA: You have three more pillars to your value proposition – access to education, networks and markets. Tell us about some of the innovation there.
Meral Guzel: On the education piece, we’re focusing on the usual elements that micro and small businesses need — in particular business planning and strategic growth for medium-size companies. On the soft side, we have an emphasis on leadership skills, especially as it relates to dealing with cultural pressures from family and perceptions of employees around having a female boss. We’re developing a range of curricula for the specific needs of an entrepreneur related to the commercial life cycle of her company, and are integrating coaches and mentors into the mix.
On the networking piece, we have a number of strategic partnerships set up that will support export-oriented businesses as well as domestically focused businesses. One of our partnerships is with Endeavor, with whom we will run a business achievement award that will be focused on high-growth women operating in non-traditional subsectors like technology.
Finally, on access to markets, we are looking at supporting women’s access to government contracts as well as building a pipeline of corporations with supplier diversity strategies.
GBA: There are five other banks participating in the EBRD Women Banking program. What kind of competitive advantage do you see TEB having?
Meral Guzel: First and foremost, we specialize in SMEs and have strong capability on both the finance and non-financial services side. We understand very well how to support business owners. We are a customer-focused as opposed to product-focused bank. We have deep know-how, deep capability in terms of staff — in particular our highly trained SME Consultants — strong capacity to forge strategic partnerships with others in the ecosystem, and the full commitment of our CEO and top management. We have a proven track record with SMEs and with start-ups, and so we are poised to be successful with the Women’s Market.
GBA: TEB’s vision is also to become the employer of choice for women. Tell us about your plans in that regard.
Meral Guzel: We want to align our treatment of women as customers and employees with a strong internal diversity program in order to become an employer of choice for women. To complement this, TEB signed on to the IFC’s She Works initiative to advance women’s employment opportunities and conditions within the bank. TEB will begin by completing a gender assessment and an employee survey that will be conducted by EDGE.
GBA: How can GBA support you in achieving that vision?
Meral Guzel: Our senior leaders attended the Summit in Washington, D.C., last September, and then Westpac hosted a study tour especially for TEB last November. Both activities really persuaded the leadership that the Women’s Market is a great opportunity. We are active participants in your Data Analytics working group, which is great support as we put in place processes to capture data going forward. We are attending your Summit in São Paulo, Brazil, and are sharing our information so that others will learn, including hosting a Study Tour next year. We strongly believe in the power of lateral learning and are delighted to be part of a community of best practices around serving the Women’s Market.
As told to the Global Banking Alliance for Women