Creating Opportunity Where It's Needed Most
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IFC Sustainability

Women's SMEs


IFC aims to provide loans through financial intermediaries to small and medium sized enterprises in developing countries; at least a quarter of them women-owned.


The Engine of Growth


Small and medium enterprises (SMEs) account for about 90 percent of businesses and more than 50 percent of employment worldwide. They are the engine for economic growth and poverty reduction in developing countries.


This is also the sector where women business owners are most heavily concentrated, along with microenterprises. Addressing women SME owners’ specific challenges in accessing finance must be part of any overall SME growth strategy.


Common Constraints in Accessing Credit


Common constraints faced by women entrepreneurs include a lack of traditional collateral, such as land, often registered in men’s names and a lack of credit history because family spending is in the husband’s name.


This can dissuade even the savviest women from applying for business loans, leading to a lack of experience in dealing with banks and their requirements. Compounding the issue in many countries is women’s lack of access to the kind of business training that will help them manage growth.


What Works for Women


IFC has pioneered solutions to these issues. The secret lies in finding the right combination of financial product innovation, financial skills training for women clients, and institutional capacity-building to better reach the women’s market.


In some cases, alternative products must be emphasized, such as equipment leasing instead of traditional loans. Customer training in banking processes and financial literacy can also bring in new women clients, as can women-only banking outlets or dedicated women’s banking employees. General staff training on customer care and gender awareness can make a difference as well.



Strengthening Access to Finance for Women-Owned SMEs in Developing Countries


This report explores the role of women-owned SMEs and looks at available data to explain key questions, such as why women are overly represented among smaller and informal enterprises, and what might be done to realize their high growth potential. Produced by IFC on behalf of the G-20 Global Partnership for Financial Inclusion (GPFI).


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