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March 2021

Women’s Entrepreneurship in Timor-Leste: An Assessment of Opportunities, Barriers, and a Path Forward

Executive Summary

Timor-Leste is one of the world’s youngest democracies with a long history of colonization and a violent past, leaving the nation with high incidence of poverty , under development and severe inequalities, which affect women disproportionately. Women often face discrimination within their families, in their communities and in the wider society, where a patriarchal social system still prevails, fueling high levels of Gender-Based Violence (GBV).

Timorese women actively contribute to the economy including through agriculture and Micro, Small and Medium Enterprises (MSMEs) -- trading produce and traditional handicrafts and selling cooked food and other basic necessities. Although female entrepreneurs make up 43% of MSME owners in Timor-Leste and are identified as engines of growth in the national economy, they face greater challenges starting and scaling their businesses than men. Some of the barriers they face are intertwined, gendered business and social barriers. The Business and Social Support for Female Entrepreneurs in Timor-Leste (BEST) Initiative, under the Women and Girls Empowered (WAGE) consortium program, is led by Grameen Foundation in partnership with ABA ROLI, and was designed to increase female entrepreneurs’ access to microfinance, business education, and GBV support services and to promote the growth and resilience of their enterprises. WAGE is building the technical capacity of, and creating formal linkages among, local MFIs and CSOs implementing women’s empowerment initiatives.

In support of the WAGE BEST initiative, the objectives of this assessment are to understand the multifaceted barriers and opportunities for women’s business growth in Timor-Leste, and map the existing local service providers with the potential to address these barriers. In addition, this report identifies opportunities for linkages to enable local service providers to extend a more holistic and high- impact package of financial, business and social services to their clients. This assessment was supported by a preliminary gender and inclusion analysis conducted at project launch through a desk review as well as field research which leveraged focus group discussions and key informant interviews with women entrepreneurs, community members, microfinance institutions (MFIs), and women’s empowerment civil society organizations (WE CSOs).

Key barriers to women’s ability to participate in and benefit from economic activities identified include entrenched gender norms and expectations, time poverty, limited access to productive resources and finance, and GBV. While the Constitution and statutory laws of Timor-Leste guarantee equal rights and duties for women and men, in practice entrenched social norms including traditional gender roles and expectations within households, communities, and markets result in heavy household caretaking workloads, such as child care, cleaning, cooking, and washing clothes, which limit the amount of time women have available to participate in economic activities. Participants emphasized that while there have been positive changes in gender norms in recent years, access to productive resources is heavily influenced by patriarchal social norms dictate that land should be owned by husbands, limiting women’s ability to access credit and other financial services for business, as land titles are required to fulfill collateral requirements at most major financial institutions. With limited access to finance, participants in the focus group discussions and key informant interviews shared that they generally rely only on their own savings and available household resources to fund their businesses, narrowing the sectors that women can venture into and limiting potential for business growth. In addition to these barriers, Timorese women continue to face a blatant threat of GBV in their daily lives with more than half of the adult female population having experienced GBV. Participants in the focus group discussions (FGDs) and Key Informant Interviews (KIIs) shared their perspectives that two factors appear to drive the prevalence of GBV in Timorese communities: economic and societal pressures acting upon the men and provocation brought about by women themselves. Despite existing policies enacted to govern GBV cases, in general, GBV is considered a private matter with cases rarely reported to local authorities and disputes resolved within the family or with involvement of community leaders. The threat of GBV prevents women entrepreneurs from challenging the entrenched gender norms and expectations, which limit their working hours and potential business revenue. Women continue to be highly dependent on men economically, which further contributes to their hesitance in formally reporting GBV cases. Some women fear that if they report and their husbands are put in jail, they would have no means to provide for their children.

The full list of opportunities and barriers identified from the assessment are summarized below, using the categories defined in WAGE’s Women’s Economic Empowerment Methodology, which considers women's empowerment across six broad areas of their lives: structural, relational, material, personal, cognitive, and perceptive barriers.

Key Opportunities and Barriers to Women’s Economic Empowerment in Timor-Leste

Positive Findings

Structural Opportunities

  • Highly Gender-Responsive Legal and Policy Framework: The Constitution of Timor-Leste states that “women and men shall have the same rights and duties in all areas of family, political, economic, social and cultural life,” and proclaims that promoting “an effective equality of opportunities between women and men” is one of ten fundamental objectives of the state. Notably, the Constitution was influenced by a civil society working group “Women and the Constitution.” In 2001, the working group developed the “Women’s Charter of Rights” and submitted it, with approximately 10,000 signatures, to the Constituent Assembly. This was instrumental in centralizing gender issues in the country’s policy debate, increasing women’s political participation, and raising public awareness of the democratic value of gender equality.
  • In line with Timor-Leste's stated commitment to gender equality and equity, the government produced progressive policy documents, including the 2014-2017 Gender and Private Sector Strategy, which was extremely detailed and forward thinking. However, a lack of implementation of those policies continues to limit progress towards gender equality and equity, which will be discussed further under the barriers.

Relational Opportunities

  • Supportive Family Relationships: Despite patriarchal household power dynamics and generally unequal household workloads, the majority of married women participants stated that their husbands are supportive and allow them to participate in activities such as training and other livelihood opportunities. Participants also shared that they receive support from their husbands or other family members with household chores, childcare, and if necessary, look after their businesses when they are interested in participating in training and other personal development activities. Although, participants indicated that they have this family support to attend trainings or other livelihood opportunities, they are still responsible for most household activities outside of those events.

Material Opportunities

  • Micro-grants Available to Women’s Groups: Women entrepreneur groups are often recipients of micro-grants from the local government and non-profit organizations to start a variety of small businesses, and training from local CSOs. While there are challenges and limitations in the training provided, focus group participants felt that these grants and training are instrumental to start or to add capital for women’s businesses. The training challenges and limitations are explored in-depth in the Key Barriers section below. 
    • Savings and Loans models: Participants shared that credit accessed by the members through savings and loans groups formed under the micro-grants from the local government and nonprofit organizations are instrumental to start or to add capital for women’s businesses.

Personal Opportunities

  • A Culture of Women’s Groups: Women entrepreneurs are commonly part of women’s entrepreneurship groups. Study respondents reported that such groups serve as an important source ofsocialsupport, finance and training formembers to start and maintain their businesses.

Cognitive Opportunities

  • Technical Skills: Women in the focus groups reported that their pre-existing skills include those that are passed on through family traditions, such as weaving. These skills generate a prominent portion of their families’ incomes.

Perceptive Opportunities

  • Motivation to Start/Grow Businesses: Women in the focus group discussions are highly motivated to start and/or grow their own businesses.
  • Confidence: Participants in the focus groups noted they felt confident in their ability to start businesses if they had pre-existing leadership and business skills gained from practical experience, and their confidence grew with time as they gained experience and learned by doing.

Key Barriers

Structural Barriers

  • Contradictory Legal and Justice Framework: Timor-Leste has a mixed legal and justice system, combining both formal and customary laws; and formal and informal justice institutions. The Constitution guarantees equal rights for men and women but it also requires the state to recognize customary laws, so long as they are not contrary to the Constitution. These customary laws and justice institutions often embrace sexist norms and practices, including discrimination against women with respect to property rights, resulting in confusion and often stripping away women’s rights in practice.
  • Policy Gaps and Silences: Women are considered equal under the Constitution and many of the formal laws and policies of Timor-Leste, but in practice these legal guarantees are not ensured. The enforcement of women’s Constitutional rights is limited by local governments’ budgetary constraints and a lack of rules and regulations facilitating the implementation of national laws and policies.
  • Challenges to Business Formalization: Most participants stated that existing business registration procedures and requirements are not adapted to the capabilities and realities of micro-, small, and medium enterprise (MSME) owners, making it difficult for women entrepreneurs to benefit from the advantages of business formalization. Women focus group participants noted that they lack the documents needed to register a business (e.g., a license from the tax office), find the requirements generally too cumbersome and difficult to comply with (e.g., obtaining various permits from respective ministries), and rarely receive assistance in completing these registration requirements. These services are currently not being offered by any government office or separate entity and entrepreneurs are often left to comply with all the requirements independently. Furthermore, the tax office is based in Dili, discouraging women in rural and other urban areas from processing their business licenses due to geographic reach.
  • Insecurity and Crime: Participants from various groups identified two kinds of threats that they encounter in their daily lives, which have adverse effects on their business activities: domestic violence; and insecurity in public spaces due to communal conflicts and gang violence.

Relational Barriers

  • Patriarchal Sociocultural Norms: Timorese sociocultural norms position men as household heads, decision-makers, and breadwinners operating in the formal economy; while women are seen as caretakers responsible for a multitude of household chores, required to obey their husbands, and generally work in the informal economy. Women’s caretaking role limits the amount of time they have available to participate in income-generating activities. At the same time, their subservient gender role limits women's agency and decision-making power over household finances and, specifically, the use of these finances to support women's business investments.
  • Social Expectations for Economic Support: Participants in the focus groups cited that one practice, which has a significant negative impact on women’s take-home pay is pressure for families to make donations to support traditional ceremonies and celebrations. While these events serve important social functions, there is a trade-off whereby women tend to channel their business income to these community events instead of to savings or to growing their business.
  • Gender-Based Violence (GBV): GBV, most commonly in the form of domestic physical or sexual violence, is reported to be a major threat to women’s daily lives and economic activities, with more than half of the adult female population having experienced GBV. According to the focus group participants, economic and societal pressures such as dire financial needs, lack of employment opportunities, and low awareness and education on GBV prompts men to lash out at their women partners. The focus group participants themselves stated that GBV is a form of discipline towards women partners who are erring or not performing their duties as wife and mother. They further added that women “provoke” their male partners to commit GBV if they are lazy, caught gossiping and spreading rumors, not taking good care of the family especially the children, gambling, smoking, and drinking. Conversely, women who are not tied to performing traditional gender roles or that challenge gender roles and unequal division may also face backlash from their intimate partners for not doing what is expected of them. Due to this shared way of thinking, GBV is considered a private family matter. As a result, instead of seeking immediate legal remedy for GBV-related issues, the participants shared that domestic violence in their communities is most commonly addressed through traditional practices.

Material Barriers

  • Limited Access to Productive Resources: There is no formal law on land ownership in Timor-Leste; therefore, various customary laws and practices are used to determine ownership. Land is generally passed to male family members with women obtaining access only through marriage and only about 20% of women own land. Assessment interviewees and focus group participants reported women have extremely limited access to land due to traditional social norms, which dictate that land should be owned by husbands rather than their wives.
  • Lack of Land Ownership Limits Access to Financial Services: Lack of land also limits women’s ability to access credit and other financial services for business. Land titles are required to fulfill collateral requirements at most major financial institutions. Due to this barrier, women focus group participants shared that they have limited access to finance, and generally rely only on their own savings and available household resources to fund their businesses. This severely limits their ability to sustain or grow their business.
  • Limited Access to Proper and Safe Market Facilities: Tais producers (traditional weavers) reported that a lack of access to proper market facilities to sell their products is a significant concern. They further shared, because of low profit margins, they experience difficultly in seeking and renting strategic commercial spaces to sell their products.

Personal Barriers

  • Time Poverty: As discussed under Relational Barriers, women’s heavy household workloads, which are dictated by traditional gender roles, limit the number of hours a day they can devote to their business operation and skills development. This fact forces most women entrepreneurs to work in low-paid sectors and businesses, which they can start based on pre-existing skills and can operate simultaneously with other household tasks.

Cognitive Barriers

  • Poor Education and Occupational Segregation: Women tend to have lower educational attainment and lower literacy levels than men because of prevailing social norms that prioritize male over female child education. This norm finds its basis in the belief that men are the breadwinners of the family, so they need more education. Low literacy levels prevent most women from participating in the formal employment sector, especially salaried work, and relegate women to economic activities in low-paid handicraft production, retail shops, and agricultural jobs.
  • Limited Financial Literacy: Limited financial literacy, information about available credit and financial services providers, and navigating loan requirements make the loan qualification process cumbersome, time-consuming and ultimately impracticable for many women entrepreneurs.
  • Limited Business Management Skills: Participants across all FGDs stated that while they have confidence in their leadership and the business skills, they require more formal business training and mentoring to mitigate the business risks and challenges they face. Some of the risks they mentioned included low profit margins and debt risk, competition and operational risk, and potential threat of business interruption due to unforeseen circumstances, including episodes of violence (i.e., 1999 Independence Referendum and 2006 Military Conflict). Women entrepreneurs’ low profit margins are tied to various issues including starting businesses in saturated sectors with high competition, poor recordkeeping, and poor stock and cash flow planning. Women are keen to receive business support and learning opportunities, if available. However, study participants shared that service providers need to consider and plan out the activities with women-friendly logistics to accommodate women entrepreneurs’ overlapping roles within their households and in their businesses. Some of the accommodations study participants shared included identifying venues near the target beneficiaries so that women will be able to better manage their time.

Perceptive Barriers

  • Beliefs and Perceptions about Women’s Businesses: Perceptions influenced by social norms classify some businesses as being primarily run by men or primarily run by women. Businesses that typically fall in the latter category are those that build off the traditional skills of cooking, sewing, and craft production.
  • Beliefs about Men’s Roles in Women’s Businesses: Influenced by a predominantly patriarchal society, the women who participated in this assessment have a heavily ingrained mindset that men are responsible for major family decisions including a woman’s business. This norm increases the likelihood of interference by family members in women’s business matters. Specifically, women participants shared that the role of married women is to support and listen to their husbands — only widows have the right to make autonomous decisions.

Findings of the Geographic Mapping

The second objective of this assessment was to identify target districts for the WAGE BEST project; complete a geographic mapping of existing financial, business and GBV prevention/response services in Timor-Leste; and to identify opportunities to link women’s empowerment (WE) civil society organizations (CSOs) and MFIs in said identified target districts. WAGE BEST found through referrals, several WE CSOs, including Alola Foundation, Ba Futuru, Fórum Comunicação Juventude Oratório Dom Bosco (FCJ), Timor-Leste Women’s Communication Forum (FOKUPERS) and Psychosocial Recovery and Development in East Timor (PRADET) provide gender and conflict management training, shelter, healthcare, psychosocial support, and legal services to prevent and respond to GBV. WE CSOs and parastatal organizations like Institute for Business Support of Timor-Leste (IADE) also provide business planning and finance management training services to support women to gain the skills they need to bridge business skills gaps.

At the same time, Moris Rasik and Kaebauk provide microfinance loans to women clients including MSME loans, specifically for women entrepreneurs.

Selection of target districts was based on higher than national average poverty headcounts, high needs for GBV support services, co-location of MFI and WE CSO services, feasibility and value for money, and sustainability. Based on these criteria, Liquica, Ermera and Dili5 Districts were identified as target districts to pilot BEST initiative linkages. A detailed analysis that resulted in this selection is in Section VII of this report


The vast majority of MSMEs in Timor-Leste respond to immediate household economic needs rather than as part of a thoughtful long-term business plan. Most of these enterprises are not started with a long-term business plan. Many MSMEs are typically sustained by practical experience rather than business strategy and skills. This gap in skills and strategic planning limits many women to operating their MSMEs in the informal economy, where they often experience business risks including low profitability and market saturation. A holistic and tailored package of financial, business, and social services are needed to begin addressing these challenges. Based on the responses the assessment team received through FGDs and KIIs, below include a set of tailored technical recommendations to address said challenges and the above discussed barriers women face in starting and scaling businesses.

WAGE BEST Recommendations Based on Training Needs Expressed by Women Entrepreneurs:

  • Financial literacy and entrepreneurship training across the business cycle. Specifically, women entrepreneurs need support in:
    • Enterprise selection, planning, record keeping, inventory management and expansion to determine underlying causes of low profits.
    • Information on financial services available in the local area (especially loan products), product terms, qualification requirements, and application processes, and how to select loan products that are advantageous for the business. 
      • Linkages to formal financial service providers.
  • Market assessment and linkages and business planning:
    • Utilizing market assessments and market information to select profitable business ventures that address a particular demand of the community or target customers.
    • Developing personalized business plans for long-term planning and to mitigate the risk of failure.
    • Preparing risk management and business continuity plans to respond to unexpected shocks.
  • Technical skills training:
    • Sector-specific training (such as tais weaving and food production) to improve product quality and diversification of product offerings.
    • Negotiation skills both for personal and business purposes.
  • Customer service and marketing:
    • Communication to address customer queries and to effectively promote products, including social media.

Social and Business Support to Women Entrepreneurs:

  • Participatory (household and community level) gender training and information dissemination to:
    • Identify and address inequities between men and women in household and child-rearing responsibilities.
    • Raise community awareness on GBV prevention, including the nature and consequences of different forms of violence.
    • Increase community knowledge about the benefits of women’s socio-economic participation and raise awareness of backlash in response to this participation and services available to victims of GBV.
    • Offer women referral pathways to essential support services including psychosocial, medical, and legal services.
  • Through thought leadership publications and/or discussions, raise awareness among key public and private stakeholders about the need to align local business registration requirements with MSME owners’ capabilities.
  • Government and non-profit organizations should also advocate to establish technical and vocational training institutions, prioritizing diversification and specialization to mitigate sector oversaturation and to increase employment opportunities.

Capacity Building Support to WEE CSOs and MFIs:

  • Building the capacity of local CSOs to provide high-quality gender-responsive entrepreneurship and GBV prevention training:
    • WE CSOs need continuous support to regularly update and adapt training curriculum to ensure that it is attuned to the needs of targeted female beneficiaries. This includes: a) Utilizing proven approaches to deliver trainings which aligns with women’s time availability such as adapting modular and cascade training approaches, b) Using multimedia platforms (i.e., radio and SMS) that can be accessed by women at their convenience to deliver short but actionable key training messages, c) Adapting existing training curricula for low-literacy audiences such as use of pictorial learning conversations. Moreover, partnership and linkages between different stakeholders should also be advocated for and institutionalized to ensure women entrepreneurs can have access to holistic financial, entrepreneurial, and social support.
  • Building the capacity of local financial service providers to design women-centered financial products:
    • MFIs who serve women as the majority of their client portfolio need to improve their staff’s understanding of the multifaceted gendered barriers and dynamics women entrepreneurs face, including GBV, and how these could be addressed through gender responsive financial products and linkages to social services.

Read the Report

    The statements and analysis contained in this report are the work of the Women and Girls Empowered (WAGE) consortium, led by the American Bar Association Rule of Law Initiative (ABA ROLI) in close partnership with the Center for International Private Enterprise (CIPE), Grameen Foundation, and Search for Common Ground (Search). The Board of Governors of the American Bar Association (ABA) has neither reviewed nor sanctioned its content. Accordingly, the views expressed in the report should not be construed as representing the policy of the ABA. Furthermore, nothing contained in this report is to be considered rendering legal advice for specific cases, and readers are responsible for obtaining such advice from their own legal counsel.

    This publication was funded by the United States Department of State through a grant provided to the WAGE consortium. All opinions, findings, and conclusions stated herein are those of the authors and do not necessarily reflect the view of the United States Government, WAGE, or any members of the WAGE consortium.

    About WAGE

    Women and Girls Empowered (WAGE) is a global consortium to advance the status of women and girls, led by the American Bar Association Rule of Law Initiative (ABA ROLI) in close partnership with the Center for International Private Enterprise (CIPE), Grameen Foundation, and Search for Common Ground (Search). WAGE works to strengthen the capacity of civil society organizations(CSOs) and private sector organizations (PSOs) in target countries to improve the prevention of and response to gender-based violence; advance the women, peace and security agenda; and support women’s economic empowerment. In this context, WAGE provides direct assistance to women and girls, including information, resources, and services they need to succeed as active and equal participants in the global economy and public life. WAGE also engages in collaborative research and learning to build a body of evidence on relevant promising practices in these thematic areas. To account for the deeply interconnected nature of women’s and girls’ experiences, WAGE’s initiatives employ approaches that are highly collaborative, integrated, and inclusive. WAGE is funded by the U.S. Department of State Secretary’s Office of Global Women’s Issues.