Gender National Report/Slovakia Integra · Gender National Report/Slovakia Integra 3 Fostering Gender Equality: Meeting the Entrepreneurship and Microfinance ... The project, Fostering

Gender National Report/Slovakia Integra 1



Fostering Gender Equality: Meeting the Entrepreneu rship and Microfinance Challenge

VS/2006/0424

Entrepreneurial Environment Study: Slovakia National Report

Allan Bussard Milena Uhlíková Beata Dobová

Integra Foundation Bratislava, Slovakia

August 2007


Table of Contents Executive Summary 1. Introduction

1.1. Project Background 1.2. Purpose of Study and Report 1.3. Methodology 1.4. Gender and Equality Concepts and Definitions

2. General Country Information: Slovakia 3. ScoreCard

3.1. ScoreCard Diagramme for Slovakia 3.2. General National Context for Entrepreneurship 3.3. Gender Equality in Society 3.4. Gender Equality in Labour Market Inclusion and Welfare Bridges to Self-Employment 3.5. Gender Equality in Entrepreneurship and Self-Employment 3.6. Gender Equaltiy in Support Structures for Entrepreneurship 3.7. Gender Equality in Access to Finance

4. Conclusions, Challenges and Recommendations 5. Sources 6. Useful Links and Resources


Executive Summary Women represent 30% of all entrepreneurs in Slovakia. The reasons for this are both historical and current. Historical reasons are that, until 1989, there were no entrepreneurs of any kind in communist Czechoslovakia. The early stage entrepreneurship in Czechoslovakia (from 1993, Slovakia) was characterised by corruption, lack of clear legal structures and guidelines, dominance by former communist-era “bosses”, no support structures for entrepreneurship and a very aggressive entrepreneurial context. The current reasons are due mainly to: lack of support structures focussed on the kind of enterprises women tend to develop, little access to formal credit, and few role models of successful female entrepreneurship. The EU funded project, Fostering Gender Equality: Meeting the Entrepreneu rship and Microfinance Challenge aims to address this shortcoming by improving the sector’s understanding of women’s enterprise and identifying and exchanging on good practice. The project involves implementation and evaluation of a series of pilot projects, best practice exchange visits and comparative studies carried out by 9 network members under the coordination of the European Microfinance Network. This report is part of the comparative studies carried out in the eight countries represented in the project. The purpose of the study is to evaluate the business environment for women entrepreneurs in the following European countries: Belgium, France, Germany, Hungary, Norway, Spain, Slovakia and the UK. The eight study teams have collected data on the following six dimensions which represent key factors affecting female self-employment and entrepreneurship:

• General National Context for Entrepreneurship • Gender Equality in Society • Gender Equality in Labour Market Inclusion and Welfare Bridges to Self-Employment • Gender Equality in Entrepreneurship and Self-Employment • Gender Equality in Support Structures for Entrepreneurship • Gender Equality in Access to Finance

The General National Context for Entrepreneurship in Slovakia is growing, though in a complex and uneven manner. Slovakia has one of the highest GDP growth rates in the EU (currently 9.2%). Unemployment in major centres like Bratislava and Kosice is low. Yet this strong economic growth is not spread evenly across the country. Some areas retain stubborn unemployment of more than 25%. Gender Equality in Society benefits from a tradition (under socialism) of formal equality. However, in practice this does not easily translate into entrepreneurial opportunities. Gender Equality in Labour Market Inclusion and Welf are Bridges to Self-Employment continues to be average to below average and is affected by significant pay gaps between men and women. Gender Equality in Entrepreneurship and Self-Employ ment tends to be below average, with entrepreneurship as an option for women when paid employment options are not available. Gender Equality in Support Structures for Entrepren eurship tends to be below average, with only two programs specifically designed for women entrepreneurship.


Gender Equality in Access to finance remains a serious obstacle for women entrepreneurs. Typically the conditions for accessing credit are too demanding, particularly in terms of: the need to demonstrate a successful track record, the level of collateral required or the unwillingness of banks or institutions to deal with small loan amounts.


1. Introduction

1.1. Project Background This study is one of eight country studies undertaken in the context of a transnational project financed by the European Union Directorate General (DG) for Employment, Social Affairs and Equal Opportunities. The project, Fostering Gender Equality: Meeting the Entrepreneurship and Microfinance Challenge, falls within the DG’s Strategy and Programme for promotion of gender equality in local development. The project is coordinated by the European Microfinance Network and includes research, pilot project implementation and exchange of knowledge and good practice amongst 9 network members operating in 8 countries and under the coordination of the European Microfinance Network (EMN). Although microenterprises represent the vast majority of enterprises in Europe, women are under-represented in this sector. This is even more true for Slovakia. While we recognise that there can be a false pressure to achieve total parity of ownership of enterprises by men and women, the goal is to ensure that each woman in Slovakia who wants to start her own enterprise is assisted in doing so. Thus, the main objective of this project is to assist agencies (including public agencies) involved in providing microenterprise and microfinance support services to increase their capacity to serve the needs of women.

1.2. Purpose of the Study and Report The primary purpose of the Entrepreneurial Environment Study is to describe and analyse the environment in which women entrepreneurs start businesses in Slovakia. The environment is summarised in a ScoreCard Diagramme. The report explains and justifies the scores assigned in the diagramme and highlights good practices. The report is also meant to provide a spring board for discussion and debate on how best to encourage and support women’s enterprise. Recommendations are made to policy makers, government, the research community, business development service providers and financial institutions such as banks and microcredit providers. The secondary purpose of the report is to provide the basis for a cross country comparison amongst the eight countries participating in the project. The cross country comparison will enable policy makers and practitioners to identify strengths and weakness and good practices that can be adopted from other countries in order to promote gender equality in entrepreneurship and microfinance in their own countries.

1.3. Methodology Under the leadership of Evers and Jung, project partners developed a Gender ScoreCard to evaluate the entrepreneurship environment in the 8 project countries. The Gender ScoreCard was based upon a similar matrix evaluation system developed by FACET BV, Evers and Jung, and the new economics foundation (nef) in 2005.1 The Gender ScoreCard enabled each country team to collect information and assess the environment for women entrepreneurs against the following six dimensions:

• General National Context for Entrepreneurship

1 This matrix facilitated an assessment of policy measures for promotion of microcredit as a tool for social inclusion and can be found in “Policy Measures to Promote the Use of Microcredit for Social Inclusion,” FACET BV, Evers and Jung, nef, published by EMN and MFC, 2005.


• Gender Equality in Society • Gender Equality in Labour Market Inclusion and Welfare Bridges to Self-Employment • Gender Equality in Entrepreneurship and Self-Employment • Gender Equaltiy in Support Structures for Entrepreneurship • Gender Equality in Access to Finance

These dimensions represent key factors affecting female self-employment and entrepreneurship. During data collection each country team also gathered information on gender equality and entrepreneurship initiatives. As much as possible, the scores given to each of the six dimensions are based upon quantifiable indicators and comparable data available from the World Bank, OECD, Eurostat, Eurobarometer and the Global Entrepreneurship Monitor global, national and women’s entrepreneurship reports. However, a major handicap for the Slovak report is the fact that the main data source used in the project, the Global Entrepreneurship Monitor (GEM) is not available for Slovakia, however. Thus, there was heavy reliance on experts. We consulted with 15 experts from 4 locations across Slovakia, who are listed in the appendix.

1.4. Gender and Equality Concepts and Definitions This report uses a number of concepts to describe differences between women and men and to describe programming approaches to inequality. Often these terms are used inaccurately in the equality discourse. The purpose of this section is to define several of these concepts, many of which are used in this report.

Gender - Gender is a concept that allows one to distinguish between sex, which is a biological condition, and gender, the characteristics, attributes and roles assigned by society to girls and boys, men and women. These characteristics and roles are not innate. They are learned through both formal and information education and through messages and images presented in cultural traditions and celebrations, religion and the media. Roles and attributes associated with men and women differ from one society to the next and evolve over time. Gender is an important concept because gender roles and gender relations directly and indirectly influence an individual’s ability to take decisions and to have access to and control over resources. Gender roles and relations have a direct impact on vulnerability to poverty and exclusion. Gender Roles refers to a set of behavioural norms associated with women or men in a given social group, society or culture. Gender roles are divided into productive, reproductive and community management roles. The type and concentration of men’s and women’s activities in these three areas change from one society to another and evolve over time. Gender Relations refer to culturally and historically defined systems that regulate interactions between women and men.

Gender Equality - This term refers to a belief in the basic equal rights and opportunities for members of both sexes within legal, social or corporate establishments. Gender Mainstreaming - Mainstreaming a gender perspective is the process of assessing the implications for women and men of any planned action, including legislation, policies or programmes, in any area and at all levels. It is a strategy for making the concerns and experiences of women as well as men an integral part of the design, implementation, monitoring and evaluation of policies and programmes in all political, economic and societal spheres, so that women and men benefit equally, and inequality is not perpetuated. The ultimate goal of mainstreaming is to achieve gender equality. Mainstreaming includes gender-specific activities and affirmative (positive) action,


whenever women or men are in a particularly disadvantageous position (United Nations Economic and Social Council 1997). Gender Neutral - Gender neutral refers to designing policies and providing services without regard to the gender of those who participate. Where differences and inequalities exist, gender neutral approaches can inadvertently entrench and perpetuate inequalities. Equal Opportunities – This is an approach intended to give equal access to an environment or benefits, often with emphasis on members of social groups which might have at some time suffered from discrimination. Equal opportunities policies that are gender neutral can inadvertently perpetuate inequalities. Affirmative Action - Also referred to as positive action or positive discrimination, affirmative action is an approach promoting the representation of groups who have been traditionally discriminated against. The theory is that adoption of gender neutral approaches may not be sufficient because past discrimination limits access to education, job opportunities and other opportunities hence the ability to achieve based upon merit.


2. General Country Information: Slovakia

2.1. Key Data on economic and gender equality in Sl ovakia

The following key data on economic and gender equality gives an overview of the situation in Slovakia.

Table 1: Key Data for Slovakia

GDP per capita growth in 2006 6.46% GDP per capita growth over last 5 years 5.19%

Gini Coefficient = measure of income inequality Eurostat

0.27

Men: 10.7% Unemployment rate for women and men as of Q1, 2007 Women: 12.6%

Men: 11.8 % Part of adult population living below the poverty threshold in 2006

Women: 11.6 %

Total Entrepreneurial Activity of men and women (GEM 2006; per cent)

No GEM 2006 data exists for Slovakia

Gender Empowerment Measure (rank), UNDP 2006

34

Women’s representation in national legislative bodies – upper and lower houses (Eurostat 2005; EU-25 rank)

12

2.2. Evolution of female share of self-employment i n total employment Figure 1: Female share of self-employment in total employment (excluding agricultural activities)

Slovak Republik

0

10

20

30

40

50

1999 2000 2001 2002 2003 2004 2005

Year

per

cent

empl

self-empl.


3. ScoreCard 3.1. ScoreCard Diagramme of the six Dimensions fo r Slovakia Figure 2 presents the national ScoreCard results for Slovakia. The radar diagram consists of the six dimensions identified as key areas influencing gender equality in entrepreneurship. Each dimension received a scoring from 1 (lowest scoring possible) to 5 (highest scoring possible). Figure 2: National Scorecard Results for Slovakia

0

1

2

3

4

5

General national context forentrepreneurship

Gender equality in society

Gender equality in labourmarket inclusion

Gender equality inentrepreneurship

Gender equality in supportstructures for

entrepreneurship

Gender equality in access tofinance

As can be seen from Figure 2, the dimension Gender equality in society receives the highest scoring of all dimensions, although still average when compared to the other countries of the study. The dimensions gender equality in entrepreneurship and especially Gender Equality in Access to Finance score lowest, leaving lots of potential to improve the environment for women entrepreneurs. The following chapters will describe each dimension in greater detail. Annex 5.5 provides a list of all indicators and the corresponding dimensions and sub-dimensions. 3.2. General National Context For Entrepreneurship Score 2.5

The score assigned to this dimension is based upon an assessment of entrepreneurial opportunities; entrepreneurial abilities; enterpris e culture; policy incentives for entrepreneurship; welfare bridges and access to fin ance. Unfortunately for the purposes of this report, the first Global Entrepreneurship Monitor (GEM) does not provide data for Slovakia.


0

1

2

3

4

5Entrepreneurial Opportunities

Entrepreneurial abilities

Enterprise Culture

Policy Incentives forentrepreneurship

Welfare bridge

Access to finance

Entrepreneurial Opportunities Score 2.3 For general business conditions, Slovakia’s GDP growth remains high, at 9.2% in Q207 (up from 9.0% in Q107). This is the fastest growth rate in the EU25 and the OECD. This continues to confirm the country as the fastest expanding in central Europe, and analysts say the growth was healthy and not inflationary. Slovakia has enjoyed very strong economic performance in recent years. Unemployment, though high, has fallen in the past decade. The gap is closing between Slovakia and living standards in the EU15 countries, but still has far to go. However, long-term unemployment rates remain high. There are currently 303 000 registered unemployed in Slovakia, of which 176 000 are long-term (more than 12 months). Slovakia is on track to satisfy the Maastricht convergence criteria for entry to the euro area in January 2009. Slovakia has made solid progress in reducing relative poverty through increasing employment rates. In the long term, improving education and reducing the negative impact from low socio-economic background on education will be critical to sustain economic growth and reduce income inequality. Starting a business in Slovakia has become steadily easier, meeting World Bank averages. This process currently takes more than one day, but no more than 3 separate stops. The government has recently introduced a “1-stop shop” approach to starting a new business which should reduce barriers even more once implemented. Market opportunities are changing rapidly for entrepreneurs. Formerly, relatively simple access to local markets has been strongly impacted by a very rapidly changing retail landscape. The entrance of modern retail (shopping malls, hypermarkets, international and local retail chains, consumer credit) has all but eliminated traditional market access (local shops, markets) and made market opportunities very difficult for emerging entrepreneurs. Integra runs a market access program for women entrepreneurs in 4 locations in Slovakia. These entrepreneurs face very strong obstacles in entering local and external markets, and this remains perhaps the largest single barrier to entry.


Entrepreneurial Abilities Score 3.0 This sub-dimension looked at the support for entrepreneurship in local and regional development. In general, it cannot be said that entrepreneurship is the main pillar of local or regional economic development. The generally held view is that it is necessary to attract a large foreign investment to an area to have a serious impact on the local economy. However, entrepreneurship is consistently mentioned in the context of other initiatives. Entrepreneurial abilities remain at a basic level outside of the main cities. This is due largely to the absence of entrepreneurship of any type under the former system. In this, one notes a large difference between large urban areas and small rural centres. Key actors in local economic development are the government labour offices. The extent to which they promote entrepreneurship as a viable option varies greatly, depending mostly on the priorities and attitudes of local labour office management. Enterprise Culture Score 1.5 This sub-dimension examines whether entrepreneurship is on the curriculum in primary school and the impact of risk avoidance on entrepreneurship. There is virtually no entrepreneurship training in local schools in the whole country. The Flash Barometer agreement response to the statement, “One should not start a business if there is a risk it might fail” is well above the EU average. In terms of attitudes, for a range of reasons entrepreneurship does not normally present itself as a first choice for women (source: expert opinion):

• In the urban context of low unemployment, skilled and motivated women can find jobs, which is often preferable to the risk of entrepreneurship.

• Start-up capital for small business is still very difficult to access for a woman with no experience of running her own business.

• In areas of high unemployment, the risk of entrepreneurship is high as well, as the lower economic activity in a local area may mean weak markets for the goods or services intended.

• Most women still have no experience of entrepreneurship directly (family or acquaintance) and so their default response is to seek a job.

• For those women on unemployment or maternity leave, entrepreneurship is not attractive as they lose their benefit when they form a new company, even though they may not have significant income for a long period.

• For women on maternity leave, the legal obligation of their former employer to retain their workplace means that, after a period of inactivity and reduced income, most women prefer to return to their previous employment.

Policy Incentives for Entrepreneurship Score 2. 5 This sub-dimension is scored based upon government policy initiatives with respect to administrative burdens , tax regulation , ease of hiring and firing and generosity of bankruptcy legislation . One could say that for the last 15 years the Slovak government has undertaken a constant reform process, in the transition period from socialism.


As such, one can say that the policy environment for entrepreneurship is constantly improving, though unevenly. During the period 1998 – 2006, there was a strong pro-business government, which introduced a wide range of measures (flat tax, bankruptcy law, attraction of foreign investment, employment law, etc) aimed at supporting, if not specifically entrepreneurship, business in general. More recently, with the election of a more centre-left government (June 2006), there have been some modest moves to strengthen labour laws in a way that could be seen as somewhat anti-business. However, the current Slovak government remains committed to create a positive environment for business, including entrepreneurship. High social insurance costs remain a burden to entrepreneurs, and restrict labour flows. As well, the indirectly related issue of labour mobility is a barrier, as housing and mortgage availability make it difficult for workers to move in search of jobs. As well, the sharp price differences for housing between the cities (where unemployment is low) and rural areas (with high unemployment) make labour mobility very difficult. Slovakia evidences the second-lowest volume of mortgages as a % of GDP in the EU. One now finds people commuting 80-100 km or more daily to work in Bratislava. In October 2007 a new law for sole proprietors was passed by parliament and will be implemented throughout. The main feature of this law is the provision of a one-stop shop which will allow entrepreneurs to conduct all business registration formalities in one location. Welfare Bridges Score 2.8 This sub-dimension is assessed based upon the following indicators: existence of income support programmes for people out of the labour market and registered unemployed; non financial support measures for self-employment for people coming from outside the labour market; the share of economically inactive people becoming self -employed and the degree to which self-employment is promoted as an alternative to wa ge employment at job and employment centres. There is no data for start-up enterprises by unemployed people. In 2006, 13% of all businesses registered in Slovakia were start-ups. This is a total of 50 709 out of 390 076. Though it is not known how many of these were started by women. A major barrier to starting a new business from unemployment is the immediate cessation of unemployment benefits upon new business registration. The registered unemployed receive unemployment insurance and have social and health insurance benefits paid by the state. These cease the day of registration of a new business. This serves as a major disincentive to entrepreneurship and encourages black labour. The main non-financial measures available to unemployed persons starting a business are training offered by the local labour offices. This training varies greatly in its offer and quality depending on location. The training is free of charge, and compulsory for those seeking financial support from the labour office to start a new business (see financial access below). The National Agency for SME Development (a branch of the Ministry of the Economy) has been active in the support of entrepreneurship for some years. However, it has recently been rocked by fraud which resulted in the removal of the Director, the loss of a large amount of funds and as a result the need to rebuild the agency. As a result statistics are not available for its recent activities. However, one of its main problems is that it administers its loan program through local banks, which add their own criteria to the borrower, making these loans generally out of reach for small or start-up entrepreneurs. Since 1999, the National Agency has made 114 microloans for a total of €1


933 000. There is no information available regarding the number of women entrepreneurs supported. VOKA (Rural Organisation for Community Activities) has been active in rural areas since 1997 and among other activities carries out a modest rural entrepreneurship program (11 loans in 2005). As well, there are EU initiated RPIC (Regional Advisory and Information Centres) in 14 cities of Slovakia, As well there are 5 BIC’s (Business innovation Centres). Other Support structures for entrepreneurship are: • the Slovak Association of Crafts • the Slovak Business Association • the Slovak Chamber of Crafts • the Slovak Commercial and Industrial Chamber • the Slovak Business Alliance • the Slovak Association of Production Co-operation • the Slovak Association of Small Enterprises These groups typically provide association with other entrepreneurs, though are not normally designed for starting business people. There are two agencies in Slovakia which are focussed exclusively on women entrepreneurship: Top Centrum for Women’s Entrepreneurship: Top Centrum provides an association with activities (including mentoring) for women entrepreneurs. They also sponsor an annual award for the most accomplished women entrepreneurs. Integra Foundation: Integra provides training, mentoring, market access and microcredits for start-up women entrepreneurs. To date 808 clients have completed the entrepreneurship training program, and 161 loans have been made for a total of € 410 000. Access to Finance Score 2.8 This sub-dimension is assessed according to the following indicators: access to bank loans, use of public subsidies, access to microcredit and acce ss to start-up finance in general. Access to bank loans has become generally easier in Slovakia for established businesses, with a range of offers from banks, many of which are supported by EBRD or EU guarantees. However, there remains very little access to start up finance for new entrepreneurs, whether male or female. In addition to the opportunities noted above, the Slovak Guarantee and Development Bank (Government owned) launched a new loan product for women entrepreneurship in 2006. This program offers loans from €3000 to €30 000, at interest rates beginning at 4.8%, for terms of up to 5 years. These loans are available for start-up entrepreneurs, subject to adequate guarantees. However, Integra has begun to partner with this bank by sending clients who entered entrepreneurship through the Integra program. To date, 581 women clients have received loans through this program, making it the most significant player in providing finance for women’s enterprise. With respect to public subsidies , most of the loan products offered by the agencies described above made use of public subsidies in the form of grants for operations, capitalisation of the loan fund or guarantee funds. This is an indirect form of subsidy to the client. As well, the local labour offices offer free enterprise training to entrepreneurs.


For microcredit , although the study used the accepted EU definition of a loan of 25,000 euros or less this definition in practice does not fit Slovakia. Average loan sizes available through the programs noted above are: National Agency microcredit fund: average loan SKK 514 000 (€15 250) Integra: average loan SKK 77 075 (€2286) (Slovak Guarantee and Development Bank: average loan size not available.) However, it is noted that the number of microloans disbursed is tiny, almost negligible in terms of the whole country. “Access to start-up finance in general”: As there is no Global Entrepreneurship Monitor data available for Slovakia, the survey needs to rely on expert opinion for this. Through Integra’s own experience, and consultation with experts, there remains virtually no access to start-up finance through the formal financial sector. Virtually all lenders require prior business experience. 3.3. Gender Equality in Society Score 2.9

The Score assigned to this dimension is based upon an assessment of gender equality as a policy issue and social economic equality in society . In 2007, women in Slovakia are guaranteed the same rights as men. They have had the franchise and equal rights guaranteed under law since 1919. The 1991 “Fundamental Human Rights Act” does not specifically mention gender equality. However, with EU entrance, the Slovak Parliament adopted the Charter of Basic Human Rights of the EU, which includes paragraph 23 on equality between men and women. Legislatively, gender equality was a strong heritage in Communist Czechoslovakia. However, issues of equality or inequality are more relevant in practice, rather than legislation. There is a history in the former communist countries of Eastern Europe for shoddy implementation of legislation.

Gender Equality as a Policy Issue: Score 2.3 This sub-dimension looks at the following indicators: the position of gender equality on the national government agenda, the sustainability of policy measures on gender equality and gender equality as an issue in local development . The Score given is based upon government documents, statistical data and expert interviews. Regarding the Position of Gender Equality in the national agenda , there is no national strategy for women entrepreneurship or employment. This is perhaps revealed most accurately in the very limited number of parliamentarians and ministers who are women. In the current Slovak parliament, 24 out of 150 are women (16%). In the cabinet, there is only 1 woman out of 12 ministerial posts. There is no cabinet post dedicated to women’s or gender issues. Regarding Sustainability of Policy Measures, there are no specific provisions in the state budget for actions for the promotion of gender equality, and the country scores are very low in this regard.


Socio Economic Gender Equality in Society Score 3.5 This sub-dimension looks at the following indicators: gender equality in socio-economic risks and gender empowerment in society. For the first indicator the study looked at poverty risk and the differential between the number of men and women at risk of poverty in Slovakia. Gender empowerment was assessed by using the UNDP Human Development Report’s (HDR) Gender Empowerment Measure . For poverty risk the study uses Eurostat and Slovak Statistical Office data. These data provide the share of persons with a disposable income below the risk of poverty threshold. This threshold is set at 60% of the national median disposable income (after social transfers). In 2006, 21% of Slovaks lived at risk of poverty. Of this number, 47% were women. Other factors related to the poverty risk are unemployment rates. The Slovak statistical office reports for 2006 an unemployment rate of 14.7% for women and 12.2% for men.2 The last indicator used to assess gender equality in society is the Gender Empowerment Measure developed by the UNDP Human Development Report. This measure looks at seats in parliament held by women, female legislators, senior officials and managers as a percent of the total, female professional and technical workers as a percent of the total and the ratio of estimated female to male earned income. Slovakia has an overall GEM value of below 0.6. 3.4. Gender Equality in Participation in the Labou r Market Score 2.0 The Score assigned to this dimension is based upon an assessment of gender equality in economic activity , gender equality in income and gender equality in atypical work The indicators used to assess this dimension are average or below.

Gender Equality in Participation in the Labour Mark et Score 2.0 This sub-dimension looks at women’s economic activity rate as a percentage of the male rate, gender equality in income and gender equality in part-time work. In terms of female economic activity rates Slovakia ranks quite high (75.04% of male rate). There are 1 944 600 people employed in Slovakia. Of this number 1 059 000 are men and 885 600 are women. There are 58 100 part time workers (2.9%). Of this number, 43 600 (75%) of all part time workers are women. 5% of women work part-time, in comparison with only 1.3% of men. In terms of gender income gaps Slovakia ranks in the lower percentile, with a gap of above 21%. This is influenced by sector, type of profession and working time. A large percentage works in the civil service, education, health or social work sectors, which have lower pay rates. A large number of women are clerical, low or unskilled workers. Currently women occupy 32 % of the management positions in large companies and own 30% of the businesses in the country. Addressing the pay gap is not a priority on the government agenda at this time.


Social Infrastructure for gender equality in labour market Score 2.0 This sub-dimension evaluates gender equality in the impact of parenthood , public provision of childcare and the general social infrastructure for gender equality i n the labour market . Regarding the Impact of Parenthood , Slovakia has a relatively low birth rate (1.33 children per woman). In Slovakia, 54% of all households are without children (compared with 66% in the EU). However, parenthood does influence strongly women’s participation in entrepreneurship. There is no data available on the participation of women with or without children in the workforce. As elsewhere, women in Slovakia carry the bulk of the domestic duties within a family, which affects their participation in the workforce. As such, Slovakia ranks low in this indicator. Regarding Childcare Provision the situation in Slovakia for childcare provision has generally declined since the 1989 revolution. Prior to this time there was universal free early childhood care. Since then, financial pressures have caused many public kindergartens to close, and others to go private, with ever increasing fees. These fees average SKK 4700 (€139 per month, which is 26% of the average salary. Thus, this cost is a high barrier to employment or entrepreneurship. Much childcare is still provided by family members (grandparents) or hired babysitters. For Social Infrastructures to support gender equality , the GEM index used to evaluate social infrastructures is not available for Slovakia. ‘ There is statutory maternity leave of up to 36 months, and during the first 6 months they receive 75% of their previous salary. Social benefits are paid by the state during maternity leave. After maternity leave, these women are in theory entitled to return to their former jobs, unless the position no longer exists. However, in practice, this rarely happens, with employers finding ways to avoid re-hiring these mothers. Mothers may transfer the benefits of maternity leave to the father. Gender Equality in Welfare Bridges Score 2.0 This sub-dimension looks at gender equality in receipt of welfare benefits , gender equality in movement from unemployment to self-employment and gender equality in the design of income support programmes . In terms of receiving welfare benefits , gender based inequality is generally not experienced. However, to some extent, women receive lower payments, due to the differentiation in levels of former income and length of time employed. Also, due to the greater tendency of women to part-time employment and interrupted work, this results in lower payments. Aid to single parents is generally paid to women. There are no specific (gender or otherwise) welfare benefits designed to assist movement from welfare to self-employment . Once a person registers for self-employment, welfare benefits cease. When looking at gender equality in the movement from unemployment t o self-employment . There is no data on gender distinctions on movement from unemployment to self-employment.


3.5. Gender Equality in Entrepreneurship and Self Employment Score 2.3

This dimension assesses gender equality in self-employment and gender equality in entrepreneurial characteristics and entrepreneurial culture . Slovakia continues to see significant gender difference in entrepreneurial start-ups. According to the most reliable Slovak Statistical Office data for 2006, the rate of female business ownership is 30%. As elsewhere, women’s businesses tend to start small and stay small. There are few well-known women entrepreneurs.

Gender Equality in Self-Employment Score 2.0

The gender gap in the ratio of self-employment (less than 0.49) to total employment is well below the EU average. Within the EU 25, self-employment accounted for 16% of total employment with 19% of men self-employed compared to 11% of women. In Slovakia, these figures are 15% of self-employment in total employment with 18.9% of men compared to 8.2% of women3 (2005). Gender Equality in Entrepreneurial Characteristics Score 3.0 This sub-dimension assesses gender equality in the size of entrepreneurial proj ects . It is clear that in Slovakia women’s businesses are smaller than those owned by men. Though data does not exist, it is assumed that a high proportion of businesses owned by women are sole proprietorships. However, more detailed gender-specific data for entrepreneurial start-ups is not collected in Slovakia. Gender Equality in Entrepreneurial Culture Scor e 2.0

Media representation of women’s entrepreneurship and societal recognition and acceptance of women’s self-employment is very limited. In the main weekly business journal, there was not recorded any specific articles on women’s entrepreneurship in the 12 months prior to writing this report. The survey noted 8 other media entries on women’s entrepreneurship during this time. With respect to acceptance of female self-employment , expert opinion indicated that there are few biases against women starting and running businesses, with the exception perhaps of the Roma population. (However, no specific research was done on this.) However, staff of agencies working directly with women entrepreneurs feels that most of their clients do feel barriers (which the experts perhaps cannot measure!). These are hard to identify, but a general feeling of “not being taken seriously” is common among women entrepreneurs, particularly those in rural areas.

3.6. Gender Equality in Support Structures for Entrepr eneurship Score 2.8 This dimension assesses whether entrepreneurship promotion activities and local support measures aim for gender equality in entrepreneurship. This area received quite a low score.

3 http://europa.eu/rapid/pressReleasesAction.do?reference=STAT/06/133&format=HTML&aged=1&language=EN&guiLanguage=en


As noted above, there are only three support structures in Slovakia that are devoted to the promotion and support of women entrepreneurs. These are the Top Centrum, the Slovak Guarantee and Development Bank, and the Integra Foundation. Only the later two provide business finance, and only Integra provides this to start-up businesses. Even though Slovakia is a relatively small country (5.5 million) the small number of clients in these programs (less than 1000) is inadequate for the size of the country and state of the economy. There is, has already noted, no national strategy or policy in support of women’s entrepreneurship. As well, data tracking the state of women’s entrepreneurship is very weak in Slovakia.

Entrepreneurship promotion activities that aim for gender equality in entrepreneurship Score 3.0

This sub-dimension considers how widespread consideration of the specific needs of women and men are in the design of promotional activities for entrepreneurship. It also examines whether there are specific promotional activities aimed at women , the extent of research on the gender aspects of entrepreneurship and the impact of that research on policy. The only gender-specific promotional activities encountered were those by the three agencies mentioned above. Each of these are active in promoting women entrepreneurship within the context of offering their own products (association membership, finance, training, market access.)

The websites of the agencies which promote entrepreneurship in general do not have an equal promotion of female and male images, with the exception of the National Agency, and the three specific agencies. The Chambers of Commerce do not carry any specific images promoting women entrepreneurship. There has been no gender specific research on female entrepreneurship in Slovakia, except very general data in the context of a larger research on the situation among women in general aged 45 and older. (“Here and Now: Soundings from the Lives of women 45+”) However, even this research focused only on the area surrounding one small city in South Slovakia (Lucenec). As such, one cannot say that there is research which impacts policy regarding women’s entrepreneurship. Local support measures that aim for gender equality in entrepreneurship Score 2.7 This sub-dimension examines whether business development services are designed with the specific needs and circumstances of women as well as examines the existence of support networks for women entrepreneurs. There are two specific programs that provide BDS for women entrepreneurs, Top Centrum and Integra. The BDS services provided by Top Centrum include:

• Availability of a mentor/coach • Expert advice on sourcing finance for business • An entrepreneurship club where business issues can be discussed with other women • An annual prize for women entrepreneurs in Slovakia

The BDS services of Integra (in addition to offering credit) are:

• Mentoring • Training courses in basic business skills • Market access for client products


• A regular newsletter informing clients on issues regarding the business climate and opportunities

• Training events and conferences designed to inform clients about business issues, and to provide skill development

3.7. Gender Equality in Access to Finance S core 1.6

This dimension assesses the degree of gender equality regarding financial resources used to start a business , access to external finance and access to microcredit. The scores were very low in this section, with the exception of the measure determining whether there are two or more national microcredit schemes targeting women. However, this is also misleading as there are only two such schemes, each with very limited scope. Financial Resources Score 1.0 This sub-dimension looks at gender equality in businesses started with the busi ness owner’s personal funds and gender equality in overall start-up resources . Unfortunately there is no statistical data available for either of these categories. Expert opinion though agrees that while access to finance from the formal financial sector is very limited for start ups, it is even more limited to women-owned start-ups. One can assume that those women who received start-up financing from either Integra or the Slovak Guarantee and Development Bank are virtually the only ones who did not start their business with personal funds. External Finance Score 1.0 This sub-dimension evaluates gender equality in access to bank loans and gender equality in access to public loan schemes. Again there is no gender-specific data collected here. But as noted above, there is only one specific bank loan scheme aimed at women in the whole country. But with no data collected on gender specific bank lending, one can only rely on expert opinion that there is very limited access to bank loans and public loan schemes. Most public loan schemes are guaranteed by the EU, Slovak Government or EBRD. However, they all operate through local banks, which tend to apply their own criteria to loan approval, regardless of the guarantee. Generally, Integra women clients who have healthy businesses and qualify for repeat loans with Integra have had little success with accessing bank finance. Access to Microfinance Score 2.7 This sub-dimension looks at gender equality in access to microcredit and whether there are microcredit schemes that target gender specific nee ds . For gender equality in access to microcredit , there is no specific data, aside from that provided by the two national institutions that provide credit to women. As noted, Integra has provided 161 loans, while the Slovak Guarantee and Investment Bank has provided 581 loans. While these two schemes are both national (Integra has four offices) with the Slovak Guarantee and Investment Bank has 11 branches across the country. However, it is debatable whether this limited outreach warrants a high score, due to the very limited number of clients engaged.


4. Conclusions, Challenges and Recommendations 4.1 Conclusions The basic conclusion from this study is that women entrepreneurs in Slovakia continue to struggle with business start up issues. It is not something that normally occurs to a women who is in inadequate employment, unemployed or returning from maternity leave. Access for women to formal business support structures is very limited. There are very few dedicated support structures for women’s entrepreneurship, and these reach a small number of women entrepreneurs. Absence of research data in this area led to a heavy reliance on the opinion of experts. However, as Slovakia is a small country, with a recent (16 year) history of entrepreneurship of any kind, gives confidence that the conclusions are reliable. Recommendations that emerged from this study are as follows:

1. There is a continuing need for women-focussed support structures for supporting start-up and ongoing enterprises. Those that do exist need to grow.

2. There is a need to promote and highlight entrepreneurship as a response to unemployment

or underemployment among women, using women-focussed media.

3. There is a need to develop affordable child-care structures with the needs of women business owners in mind.

4. The state should change social security and health insurance policies that are punitive (i.e.

No overlap between when a woman leaves benefit and starts her business.) and which in this way discourage the move from unemployment to entrepreneurship.

5. There remains a need to enable access to finance for women start-up entrepreneurs,

whether through access to credit or the use of grant or guarantee schemes.

6. Networks of women in business should be promoted and supported.

7. The secondary school curriculum should make space for basic entrepreneurship training and orientation, available to both girls and boys.


5. Sources Experts, Resource Persons: MICHALOVCE: Labour Office Dr. Svrčeková Mária Tax Consultant Mrs. Marta Kurilcová Business Licence Office Mrs. Herbecová Business Owner Mr. Robert Boroš

Mrs. Forgáčová RUZOMBEROK: Labour Office City Office Director of Enterprise Department Mr. Pavol Scheer Business Owner Mrs. Daniela Sečkárová LUCENEC: Labour Office Mrs.Velika Maria City Office Director of Enterprise Department Mrs. Kolimarova Zelmira Employment Services Office Mr. Kojnok Daniel Business Owner Mrs.Koroncziova BRATISLAVA: Integra Foundation Mrs. Milena Uhlikova: Vernus Cooperative Ms. Lea Uhrinova Business Owner Mr. Marek Markuš Mrs. Gabika Revicka Documents Consulted “Here and Now: Soundings from the Lives of Women 54+” Institute for Public Questions, Zora Butorova (ed), Bratislava, 2007 “Handbook of Good Experiences in the area of Gender Equality in Slovakia”, Slovak Ministry of Labour Twinning Project, Rachel Silver, Bratislava, 2006

6. Useful Links and Resources

• National Agency for SME Support www.nadsme.sk • Slovak Guarantee and Development Bank www.szrb.sk • Slovak Craft Industry Federation www.szz.sk • Entrepreneurs Association of Slovakia www.zps.sk • SME Online www.msponline.sk • Rural Organisation for Community Activities www.voka.sk • Top Centrum for Women’s Entrepreneurs www.tcp.sk • Integra Foundation www.integra.sk • Slovak Statistical Office www.statistics.sk
