Women play a critical role in the global economy as entrepreneurs. They help create jobs, generate income, and boost revenue—driving economies while reducing inequalities between women and men. In many emerging economies, women are starting businesses at a faster rate than men, significantly contributing to the economic growth.
Yet women face greater obstacles, compared with men, in almost all spheres of economic activity—from access to finance and assets to technology and peer-to-peer networks. In more than one-third of economies, women do not have the same legal rights as men in freedom of movement and other areas, according to the World Bank Group’s 2018 Women, Business and the Law report. In some countries, women cannot register a business, sign a contract, or open a bank account.
Access to financial and nonfinancial services is one of the key barriers for women. A recent IFC study noted that the SME finance gap for female entrepreneurs in developing countries at $1.48 trillion. The private sector’s role is indispensable to bridge the gap.
That’s why IFC works with the private sector to improve the business environment, provide access to capital, as well as leadership training, market access, peer networks, and business management skills. We help promote women-owned or women-led SMEs by providing the tools and resources they need to enhance their confidence, capacity, capital, community, and access to contracts.
IFC invested almost $2 billion in women-owned and women-led SMEs through private-sector banks under its Banking on Women program and has provided advisory services to banks that want to better serve the women’s market.
The We-Fi initiative, launched in 2017 by the World Bank and IFC, seeks to expand access to financial services and markets for women entrepreneurs in emerging markets and boosts their access to networks, information, and mentors. The initiative also improves opportunities to link to domestic and global markets and Increases the business environment through policy and legal changes.
We-Fi announced the first round of financing in April 2018, with $120 million for three programs designed to address financial and nonfinancial barriers facing women entrepreneurs in developing countries. Of that amount, $49.3 million has been allocated to IFC. The first round of financing is expected to mobilize over $1.6 billion in additional funds.
In partnership with Goldman Sachs' 10,000 Women initiative, IFC launched the Women Entrepreneurs Opportunity Facility to increase access to finance to as many as 100,000 women entrepreneurs in emerging markets. The facility initially aimed at providing up to $600 million to improve access to capital for approximately 100,000 women entrepreneurs. But as of June 30, 2018, IFC has made over $1.1 billion in investments in 41 financial intermediaries in 29 countries--surpassing its original $600 million target. It has also funded nine advisory projects in nine countries with total project value of $4.2 million.
IFC's women's entrepreneurship training helps strengthen the management skills of owners, managers, and staff of small and medium enterprises. The training includes online and off-line modules on leadership, finance, and management. It also enables women entrepreneurs to flexibly tap into the knowledge of their peers and to receive business coaching.
Lack of access to markets is a key barrier to growth for SMEs owned or led by women. Large corporations spend less than 1 percent of their global procurement budget on women-owned businesses, leaving key business and development benefits untapped. IFC has partnered with WeConnect International to help boost women-owned businesses' access to markets and finance in emerging markets.
The SME Finance Forum is a global network for knowledge-sharing and promoting best practices that help increase access to finance for small and medium-sized enterprises. The G-20 countries’ Global Partnership for Financial Inclusion launched the Forum under IFC Management.
The program, undertaken by Bank of Palestine in West Bank and Gaza, combines access to tailored financial products with nonfinancial services, including networking, mentoring, coaching, and business information to boost the growth of women-owned small and medium enterprises and achieve business results for the Bank. The highlight of the program was the IFC-led Felestineya Mini-MBA program—whose results are highlighted in the case studies, English/Arabic, and the Full Evaluation Report.
The World Bank Group produces the Women, Business and the Law report each year, an analysis of global data on laws and regulations that affect women’s prospects as entrepreneurs in 189 economies.