Women in green business need financial stimulus to show their real strength

Female entrepreneurship is expanding in Serbia due to its boldness, persistence and creativity, while the state and financial institutions mostly don’t recognize its potential. Furthermore, many female businesses are turning to the principles of environmental protection and resource efficiency, which is becoming more and more important for competitiveness in the European market but also on the world stage.

Women in green business can grow into a significant factor of the economy and it is raising the bar with regard to sustainable operations in Serbia, especially in the light of the European Green Deal and the path toward the funds from the package. The women that turned to such entrepreneurship, and the innovations that it implies, still lean on unconventional and experimental financing programs for growth and product placement. Their firms could hardly survive without the support from their families and if they weren’t networking.

The Organization for Security and Co-operation in Europe (OSCE) and AarhusNS from Novi Sad said 76.4% of female entrepreneurs and agricultural producers that participated in their research four months ago said municipal authorities do not invite them to meetings, seminars and training intended for business development.

More than two thirds of respondents estimate that the approach toward female entrepreneurs must change and 44% is dissatisfied with the measures of the Government of Serbia for assistance amid the COVID-19 pandemic. Three out of five have never heard of circular economy.

“The recovery from the economic crisis caused by the global pandemic of the virus that causes COVID-19 warrants new business solutions. Research showed female entrepreneurs suffered a larger burden of the crisis. It is the reason why the OSCE’s Mission in Serbia supported the promotion of business models led by female entrepreneurs that are based on the creation of value from materials that already finished one usage cycle. We hope these inspirational stories would motivate female entrepreneurs to consider the possibilities for sustainable business under the circularity principle,” said National Environmental Affairs Officer in OSCE’s Mission in Serbia Olivera Zurovac-Kuzman.

Support for expansion of women-led green business comes down to civil sector’s projects

An all-female team took a chance in 2017 and started to create educational toys from birch and beech wood from responsibly managed forests, from pure cotton and natural coatings. Andramolje enables an infinite number of solutions for children’s play and it comes without instructions, so it stimulates their imagination and development.

The materials used in the toys are certified and the packaging is made of recycled cardboard, which completes the circular economy approach that the small business adopted. Marija Malović from Andramolje says its production is based on sustainable development and environmental protection, but she stressed that she and her three partners didn’t get any institutional support.

Conventional funding doesn’t meet the specific needs for support

“We haven’t yet participated in state-backed projects – whether it’s because we weren’t informed well enough or because the information isn’t transparent enough and available to everyone, I’m not sure. We have found possibilities for support in projects launched by nongovernmental organizations and various associations that back women in entrepreneurship and eco-friendly ideas,” she explained.

Circular economy is an idea of environmental protection in parallel to innovation and an increase in competitiveness. Linear economy is its opposite. One example of the latter is throwing away used products without making use of the materials, which strains natural resources as the demand for raw materials increases with rising consumption.

Banks demand higher interest rates when they lend to female-run enterprises

The European Bank for Reconstruction and Development announced that in the years of recovery from the COVID-19 pandemic’s impact it would focus on green financing: electrification with wind and solar power plants and resource and energy efficiency. The support for the creation of programs for the financial inclusion of women in business will be an important segment. Regional Director for the Western Balkans at the EBRD Zsuzsanna Hargitai said there are already loans for female entrepreneurs and women-led firms in most countries of the region.

A combination of guarantees and credit lines is a business opportunity for the banking sector

“These are credit lines where, you won’t believe it, banks required some guarantees, considering these businesses’ slightly higher risk than the average businesses. Women are predominantly engaging in services and this is an area where you cannot offer the collateral that would be required for normal bank lending. So what we are thinking about is not only to scale up our advice to women-led businesses but also use guarantees be it from the European Union, there will be a guarantee that we hope to start implementing in 2021, but we would go out also to governments. These are not big guarantees. A EUR 5 million guarantee can mobilize EUR 50 million” in financing, she stated.

Hargitai said it is a business opportunity for banks as many or even most firms under female leadership in the Western Balkans has no access to financing. Their funds come from family budgets and own cash flow, she stressed and called on businesswomen to strengthen the networks of their association and exchange experiences.

Pencils, colored pencils from Smederevska Palanka will be sold in Europe

We see another example of circular economy in the town of Smederevska Palanka in central Serbia, where Slavica and Dragan Marković started to make pencils and colored pencils from recycled newspapers. They established their firm, Newpen, two years ago, after deciding to leave the hospitality industry and start work that is sustainable and contributes to environmental protection. They got the idea for the pencils from recycled paper from a movie in which the leading character made a pencil from fallen leaves.

The Markovićs procured the equipment and graphite from China and the other raw materials are domestically sourced. They produce six to eight thousand items a day. In the meantime, they added a coloring book to the list of products.

Slavica Marković reveals that they recently signed an important contract for entering the market in Germany, Austria and the Netherlands. She asserted their main ambition is to build a production space in accordance with all environmental standards.

Rural tourism in combination with traditional relationship with nature

Sanja Knežević initiated in 2007 the idea to reconstruct and adapt an abandoned family hamlet. The picturesque ethno village of Slatkovac is located in the Župa region in the central part of Serbia, near Aleksandrovac. She and her family renewed the houses made two hundred years ago of mud, straw and wood and turned to rural tourism. Even the façade paint was made like before, by mixing lime with brick or nettle.

Slatkovac has four guest houses with 20 beds in total, and the village has a restaurant, library, ethno shop, a barn and granary. The hosts make organic and pickled and preserved food and organize art colonies, concerts and artist workshops.

There are very few subsidies, warns Sanja Knežević from the ethno village of Slatkovac

“I have to say that it is very difficult to be in entrepreneurship in Serbia. Whenever you need the slightest help, if we look at instututions, ministries, people that are supposed to take care of your business in some way, you find a closed door. There are very few subsidies. I even have to say here that in the beginning there were many more opportunities for us entrepreneurs, for young entrepreneurs, women in entrepreneurship, young people who decided to return to village,” Sanja Knežević says.

Small steps toward complete green transition

Serbia has no other path but the one in the Roadmap for Circular Economy, which implies a total green transition, according to Director of the Center for Circular Economy of the Chamber of Industry and Commerce of Serbia (PKS) Siniša Mitrović.

In his words, the government is tapping the Development Fund and other mechanisms but the Ministry of Finance still needs to reform the stimulus framework so that companies would only pay in proportion to how much they pollute and those that contribute to environmental protection would get income tax breaks.

“We already see a new cycle, especially in rural areas, where cooperatives are being established and adopting the principles of organic production, biomass use, lower amounts of pesticides, green chemical products of high quality,” Mitrović underscored. He acknowledged all the said processes are small but also said that the first step toward big changes must be stable and brave.

Equal representation of women is necessary for sustainable recovery

In the process of creation of the European Green Deal and during the introduction of measures for a sustainable recovery from the impact of the spread of the coronavirus, the European Union has been stressing that all segments of society must be equally represented.

While it attributed special significance right from the start to the people with jobs on the line amid the transition and to equal distribution among regions regardless of their level of development, the gender equality element was left out of the spotlight. However, the guidelines on the issue were introduced in the main messages as the seven-year budget and special investment framework were being developed.

The European Parliament highlighted the significance of women’s empowerment a month ago when it passed the Recovery and Resilience Facility – RRF, worth EUR 672.5 billion. According to all the signs, the time for women in green business is about to come and they will be an indispensable component of the next generation economy.