FWA 2005 Public Sector Woman of the Year
|
Maria Otero
Founder and
President
Women's Venture Fund, Inc.
"Enabling New York's Neighborhood Businesses"
|
What are the influences in your life that have brought you to where you are today?
For me, the most powerful motivation has been the desire to live a meaningful life and make a contribution to the world. While I’ve sought to pursue that goal in different ways at different times, I understood early in life that to be impactful, I needed the support and participation of others in the various projects I pursued or “volunteered” for. While still in high school I came to understand that if you have drive and vision you can develop your own network of support even when you are pursuing what others perceive to be an “unchartered” path. This insight has helped me to achieve much of what I have accomplished to date.
How does the development of micro-enterprises help bring women in economically disadvantaged communities out of poverty?
At its core, supporting the development of micro-enterprise equates to supporting the development of neighborhoods through small businesses. In general, micro-entrepreneurs conceive of their firm on a small scale because their view of the world is shaped by a narrow set of experiences and limited business knowledge. As you work with micro-entrepreneurs to change their worldview, they are able to develop their skills to progressively expand the scale of their vision and ultimately their business.
Women are especially affected by poverty since most single headed households are dependent on women (as mothers). Oftentimes, women in these situations need to create new economic opportunities for themselves and therefore turn to micro-enterprise as a partial solution. Research supports that as heads of households’ women entrepreneurs often direct their additional income to food, education, and providing economic stability for their families.
Additionally more and more minority women are considering small business in lieu of employment to provide better economic options for themselves. As demonstrated in “The Minority Business Challenge:Democraticizing Capital for Emerging Domestic Markets” (Milken Institute and US Department of Commerce Minority Business Development Agency, 2000), minority women are significantly outpacing women in general in starting businesses as their path to economic independence. As these women succeed in business they tend to hire other women and support the growth of their communities.
How do you envision the Women’s Venture Fund in ten years?
In the eight years that WVF has been operating, it has expanded from serving two communities to now serving the New York metropolitan area and parts of New Jersey. As WVF begins to incorporate new technologies into its service delivery model, WVF will continue to expand and touch the lives of even larger groups of women.
The experientially based training model used by WVF will continue to define the primary focus of the work of the Women’s Venture Fund. Further, WVF has always understood the need to provide practical tools and resources to assist a business in growing. Thus, we provide micro-loans, mentoring services and peer support networking opportunities. As more women successfully grow their businesses with our assistance, WVF will seek to determine what additional tools and resources can assist these entrepreneurs to operate more efficiently and strategically. For example, WVF is currently assessing how to assist our clients to better incorporate the new technologies that could significantly benefit those with mobile office needs. Our focus will continue to center on providing those tools and services that will help women effectively develop themselves as entrepreneurs and their businesses --- in responding to changes in the market.
What factors should an entrepreneur consider when evaluating a new business opportunity?
I think the most important factor is assessing the demand for the product or service to be offered. Too often women launch businesses because they love to produce a certain product or offer a particular service without a clear understanding of the market. In short, if you believe “everyone” is your market – then chances are you have not really figured out what your market segment or niche is. Too often women learn this expensive lesson in the school of hard knocks. Participating in an entrepreneurial training program, like those offered by WVF, can significantly expedite the learning curve and ultimately saves money. Since so many women are uncomfortable with financial data, they under calculate the start-up costs and launch without adequate capital reserves. WVF works with women to understand the financial requirements of launching or expanding a business. Where appropriate, WVF approves micro-loans to women entrepreneurs.
In general, what are the greatest opportunities for women in business today, and what are the greatest challenges?
As the world moves further into this information age on a global basis, women who carve out a niche that connects them to this and/or other major trends will have the strongest growth potential. Nonetheless, for those women savvy enough to focus on a business idea with growth potential their ultimate success will depend on their ability to build up their executive skills and financial knowledge. As various national studies conducted by the Center for Women’s Business Research as well as the Milken Institute have demonstrated, women continue to experience difficulties in growing their businesses because they are unable to access credit and because they lack the skills necessary to effectively manage a growing firm. Minority women are especially subject to these challenges as oftentimes they launch a business without adequate capital or much formal business education. WVF focuses on helping women access credit and develop the skills necessary to success.
Top |
|
FWA 2005 Private Sector Woman of the Year
|
Marge Magner
Chairman and Chief Executive Officer
Global Consumer Group Citigroup
|
What are the influences in your life that have brought you to where you are today?
There are probably three things. First and foremost, my grandmother - she helped raise me and shared with me her gift for caring about people, for listening to them and for always doing the right thing. Secondly, the people I have chosen to associate with in business. In determining which jobs to take, I’ve always based my decision more on the people involved than on the job responsibilities. That instinct has, thankfully, served me well. Third, and while not glamorous, is simply the ability to work hard and the courage to never ask anyone to do anything I wouldn’t do myself.
If you were to build a new consumer financial services business from the ground up, what attributes would be vital to its success?
You mentioned the key word in your question --- consumer. The business would be totally consumer-focused, targeting the full spectrum of consumer economic groups, addressing a full range of financial needs through compelling and innovative value propositions, providing multiple access points with well-trained staff. This, of course, all starts with a sound business model - one that has a strong operating model, the right platform, is scalable and has a robust and sound governance and compliance structure. The model would be built to recognize each customer’s unique requirements, deliver products that meet their specific needs and consistently deliver a superior service experience. The model would also be transferable and scalable globally while having the flexibility to be tailored to local market requirements. A superior brand that is recognized and valued by current and prospective customers and that differentiates and sets apart the business from other consumer financial services competitors would be the final critical component of the business.
What, in your view, are the most important developments in consumer lending over the past 12 months?
What impact will they have on consumers and the health of the economy overall?
I believe there are two main developments in the consumer-lending environment over the past 12 months. The first is the Macroeconomic Environment. The low interest rate environment is making it favorable for consumers to borrow at lower interest rates, resulting in an increase in lending, particularly in mortgages and home equity loans.
The second major factor is the level of lending product innovation taking place in the consumer financial services industry. Better risk management practices, supported by improved technology, marketing innovations and a proliferation of distribution channels has led to greater availability of consumer-lending options delivered more efficiently to a broad range of customer economic and social groups.
Both of these factors have provided consumers with an ability to achieve goals and improve their lifestyles at a level that was previously unattainable – and in a financially responsible way, as consumers are consolidating and paying down their higher interest loans at the same time. Consumer finance companies have benefited through growth in loan volumes, particularly in home equity and improved credit-loss experience. Consumers also expect more from lending institutions in terms of value, recognition and rewards. We are positioned to help meet consumer needs and provide them with the values, recognition and rewards.
Does a business opportunity need to be creditworthy before it can be investment worthy? Is there a difference between the two qualities?
For a big consumer franchise like Citigroup’s Global Consumer Group, I would say that a business opportunity needs to be creditworthy before it can be investment worthy. In many ways, our business is credit. In recent years, the definition of what is considered “creditworthy” has broadened, providing the industry (and Citigroup) more “investment worthy” opportunities. For example, with improved risk management capabilities, better technology and better industry infrastructure (credit bureaus and other information resources), we are now able to provide credit to a deeper and wider sector of the consumer market than before. This allows us to develop consumer finance markets in economies like India that would have been more difficult to access previously. And, the scale opportunities result in a very positive investment.
In your opinion why has micro lending produced a better ROI than more traditional loans such as World Bank loans to foreign countries? How would you compare micro lending to consumer lending?
There are many factors that result in micro lending delivering a superior ROI to traditional loans. Among these factors are the business models of microfinance institutions (MFI), as well as the behavior patterns of microentrepreneurs.
In general, MFIs grow faster and are more profitable than the commercial banking sector. Most of their success comes from the very close relationships the MFIs form with their borrowers. MFIs understand their clientele and provide high-touch service. During difficult times, they allow for more flexible lending procedures. Another key factor is the strong repayment ethic of most microentrepreneurs. The close ties with the MFIs and other borrowers reinforce the repayments.
What do you see as the biggest opportunities and the greatest challenges in financial services over the next ten years?
The continued consolidation of the financial services industry, both in the U.S. and globally, will be both the biggest opportunity and greatest challenge of the future.
There are many opportunities for continued growth and performance improvement over the next 10 years. The most significant opportunity for growth is in the international markets. Citigroup is well-positioned in markets that are expected to realize significant economic growth over the next ten years, including Korea, China, Brazil, India and Russia. As these economies grow, consumer needs for financial services will grow at an accelerated rate. We fully expect to grow with these markets, and in some sectors to lead the growth. We also see significant opportunity for further consolidation in some of our more mature markets. The U.S. retail banking market and Europe have significant opportunity for further consolidation.
In terms of challenges, regulatory and compliance requirements will continue to be prominent in the financial landscape over the next ten years. Issues like privacy, know your customer, accounting fraud, and risk management requirements must be addressed and effectively managed by our industry. While these issues pose challenges, I am confident that Citigroup has the management talent, governance structure, and supporting systems to continue to effectively address these requirements. |
|
