Some two-thirds of women entrepreneurs in Russia are inadequately serviced by banks, needing an average of $42,000 in financing, according to a recent IFC study. All told, the credit gap faced by the country’s women-owned small and medium enterprises (SMEs) is a stunning $11.5 billion.
Working to expand the women’s banking segment, IFC recently provided Transcapitalbank with a $50 million loan to expand access to finance for SMEs, with a quarter of the loan earmarked for women-owned and women-run businesses.
“Transcapitalbank always strives to create opportunities for its clients,” said Olga Gryadovaya, Transcapitalbank’s CEO and part-owner, who was recently named Russia’s Most Successful Woman Banker by the magazine Bank Review. "The loan provided by our partners, IFC and the International Investment Bank, will strengthen our efforts to provide banking services tailored to the needs of female clientele.”
Developing new products and market niches is a focus for IFC and Gryadovaya and her management team. The Transcapitalbank loan is just the first step in IFC’s effort to help build a commercially viable women’s banking segment in Russia.
“IFC’s long-term loan will allow Transcapitalbank to increase access to finance for women entrepreneurs in Russia,” said Greg Alton, Senior Investment Officer IFC. "But it's the combination of the IFC loan and the workshop run by IFC Advisory Services that provides the incentive and the tools to help our client meet their long-term strategic goal of 'embedding' best-in-class service to female customers across all business lines.”
In the first strategy workshop, held with the Transcapitalbank leadership team and local branch officers in Moscow in January, IFC helped define the market opportunity and presented best-practice examples from around the world. Going forward, IFC is looking to repeat this program with other banks in Russia.
The need is considerable. While more than half of Russia’s population is female, just 28 percent of Russian businesses are women-owned, and only one out of every five businesses has a woman in top management.
At recent IFC-led focus groups, Russian women entrepreneurs said they felt held back by cultural factors (questioning attitudes of male suppliers and customers), social norms (acceptance of traditional family roles), and their own skills and mind-sets (risk aversion, poor self-confidence) as well as less access to networks and resources.
Yet Russian banks have largely ignored this sizable, untapped market segment. A recent IFC survey, conducted jointly with the Association of Regional Banks of Russia (ASROS), found that around 70 percent of Russian banks see no difference between male and female customers. And more than four out of every five Russian banks (82 percent) have no strategy for working with women.
IFC started its relationship with Transcapitalbank in 2009. Since then, IFC has provided $100 million worth of loan financing and advisory services for energy efficiency lending, now an area of expertise for the bank. IFC became a Transcapitalbank shareholder in 2011.