Speech by Queen Máxima at Project Closing Event: Strengthening Women’s Entrepreneurship in Lima (Peru)
7 March 2014
Mrs. Heredia First Lady of Peru, Ambassador Woods of Australia, Ambassador van der Werff of the Netherlands, Dr. Schydlowsky, gentlemen and, above all, ladies, good morning. I am especially pleased to be joining this ceremony and to be in Peru celebrating the progress on financial inclusion but also calling attention to new challenges. Peruvian women are known around the world for their entrepreneurial spirit. I would like the stress this. I was again reminded of this yesterday when I met with 7-8 women in eastern Lima. They have come together in an informal savings and loan group, the UNICAS, to help each other start a little business or increase their incomes or deal with emergencies. Their energy has really moved and inspired me so much.
Today, we celebrate the belief in what women can achieve when given both opportunity and the right support. So, I would like to congratulate the program partners and especially the thousands of women who participated. This is also a good moment to look to the future. What can we draw from these experiences so that others may benefit? And in particular, how can financial inclusion help Peruvian women, entrepreneurs and whole communities succeed?
Peru, the Netherlands and other countries all need enterprises to create jobs and increase income. In Peru, micro and small enterprises account for 40% of GDP, and 4 out of every 10 formal jobs. When we consider the large number of informal enterprises, the contribution is even larger. But all these enterprises needed several things to be able to grow: (1) entrepreneurial spirit and skills; (2) a good business environment; and (3) good access to and adequate use of good financial services.
In my work, I have seen that access to finance is crucial. Not just short term loans but also current accounts, convenient payments, insurance and pension schemes. When we talk of finance, long-term finance can contribute significantly to SME performance in terms of employment, sales and investment. And let's not forget savings, as Mrs. Heredia mentioned. But let's not forget savings. Yesterday, I also spoke with Severino. He recently received his first formal loans, and used these to buy a car and sell fish house to house. Now, he is able to save, savings he will invest in a refrigerator and grow his business even more. Severino is very aware that savings is the cheapest form of investment. And, Severino does everything in cash. What would it mean if he were able to make all his transactions on his cell phone? Without having to go all over Lima with cash. And, what would it mean to have insurance in case of an accident? With this, he would not live with the worry that if something happens to him, his family would have no money.
As you know, enterprise success does not depend only on finance - there are many risks for small entrepreneurs. In Peru, only one of every three micro enterprises is still in business after three years. So, entrepreneurs need not only good business ideas and finance, but also skills to realize those growth prospects. In my home, the Netherlands, we have created an association that pairs loans with coaching to help entrepreneurs create solid business plans. Speak the language of banks. Set priorities. As a result, 85% of enterprises it has lent to are still in business after three years - compared to 67% that did not receive this kind of support.
So, I would like to commend the partners for reaching widely through the SALTA program and the certification program. This is so very important as access to financial services expands. As important was the training to nearly three thousand bank and loan officers; this kind of training helps them provide better services to clients.
And also the business environment. Peru has much to offer in this regard. For example, the moveable property regime helps entrepreneurs secure longer-term finance. In this context, all the policies that facilitate SME business are also important. Only in this way can the productivity of the enterprises be promoted, and, above all, encourage the formalization of many companies that today are not.
This brings me to my final topic. Some people start an enterprise with business acumen and vision in mind. But many women - and men - start one because they need some income, a secure way to feed their family, keep the roof in repair and send children to school. The right financial services, at the right price and in the right place can help people, businesses and communities achieve their goals.
For all the success and progress, more than 2.3 of Peruvians do not use formal financial services. This is to say that many do not have access to payments, insurance or other basic financial services. More than half of SME do not have adequate credit or financial services, if they have any at all. If we really want to support women, accelerate progress toward developmentandextend the thriving enterprises for the welfare of many, the goal must be nothing less than access for all Peruvians to diverse financial services, provided by sustainable and responsible institutions.
There are excellent foundations for this in Peru. The regulatory framework is very advanced. It is one of the best in Latin America. This big effort has resulted in approximately 20% annual growth in loans and savings in recent years. But now we have to concentrate on extending access to rural areas and low-income populations. For this, we need to reduce costs and also develop the right products that meet client needs. Peru's recent ground-breaking legislation on e-money holds so much promise to put digital and mobile technology to the service of these needs. It could become the first case of a single platform for mobile financial transactions being developed by public and private banks together, and available for all to use. It could transform the landscape. Of course, this is not the only solution. The point I am making is that continued innovation is needed to reach scale and sustainability with well-tailored products.
But of course this is not the only solution, constant innovation is needed to achieve scale and offer appropriate products that meet the needs of the people.
In my work as UN Special Advocate, I have seen that countries that progress faster have strong political and private sector commitment to financial inclusion. And they all must work together to coordinate and support each other. So, I am glad to see that Peru is preparing a national strategy for financial inclusion. This strategy will help to consolidate the progress already made in Peru and help government agencies and the private sector to share a vision and work together to achieve an inclusive financial system where all Peruvians are able to better manage these services through the financial education and technical training.
So, in this closing ceremony, I urge you not to think of the end, but of the next steps on a continued journey forward. I wish you and the many women entrepreneurs much success in your ventures and in helping to expand access to financial services and financial education in Peru for the benefit of all.
I am leaving tonight, but I will be with you as Peru takes the next steps in this journey towards financial inclusion. I wish you and the many women entrepreneurs the greatest success in the realization of your projects and in achieving greater access to financial services and financial capacity building in Peru, for the benefit of all. And, I wish you the best of luck with your enterprises.