Kick-off event pushes agenda on access to finance for female entrepreneurs in emerging markets
Access to finance is one of the major barriers for female entrepreneurs in emerging markets. The female entrepreneurs we work with every day tell us, and so do the statistics. 1 billion women remain outside the formal financial system and 80 per cent of women-led micro, small and medium enterprises are either unserved or underserved. This is equivalent to a $1.7 trillion financing gap. On Monday June 3rd, 2019, over 50 professionals and gender finance thought leaders gathered in The Hague for a kick-off event for the Global Entrepreneurship Summit 2019 (GES). The event focused on the way forward for access to finance for female entrepreneurs in emerging markets. Through round-table discussions, the group made seven recommendations to achieve progress for women entrepreneurs’ access to finance. The organizers plan to work on these recommendations in partnership with others in this ecosystem.
1. Invest in entrepreneurship education and information for all, from an early age
Education and training in support of female entrepreneurs should start at an early age and continue throughout vocational training and with professional training later on. This is needed to make women more comfortable with business development and risk-taking, which is now seen as something only men can do. These trainings could include innovative techniques like gamification, storytelling and role-modelling.
Reintje van Haeringen, Chief Executive CARE Nederland: “Investing in women entrepreneurs is a triple opportunity: there is a business case for financial institutions; it improves the enterprises and lives of women; and the domino effect of equality will be felt in their communities and beyond.”
2. Invest in visibility: build the stories, facts and statistics for the business case
We need to overcome the misperception that investing in female entrepreneurs is not worth the risk. There is not yet enough gender-smart market data available to build local and global business cases, making it difficult for financial institutions to act upon market potential. We need to collectively develop our capacity and that of financial institutions to collect more and better sex-disaggregated financial data and to track our performance on truly impacting the lives and businesses of female entrepreneurs.
Saskia Vossenberg, senior gender finance advisor at FMO:
The business case for financing female entrepreneurs is long term and needs pre-investment, especially with respect to that large group of women operating very small enterprises in informality and in the missing middle. We need more and better data in order to develop effective business models for these groups.
3. Invest in redressing harmful social norms that are holding women back
Next to legal barriers that restrict women’s economic opportunities, female entrepreneurs face unconscious social biases that limit their rights and decision-making power. By working together with both women and men at the community and business level, we need to raise more awareness about the economic contribution of women to the community and the constraints that they face in doing so.
4. Invest in bringing appropriate and affordable financial services to women entrepreneurs
Karen Miller, Vice President, Knowledge & Communications, Women’s World Banking: “By putting women at the center of product and solution design, we can ensure that women not only have access to the full suite of financial products they need but are using them to help reach their business and personal goals.”
Female entrepreneurs need more than credit to thrive in business and achieve security and prosperity. We need engagement in the customer journey, the full range of appropriate financial products and services (including microinsurance, savings and credit) that match women’s needs and are affordable for them.
5. Invest in financial sector accountability on diversity and inclusion
We need to hold the financial sector accountable for serving women-led micro, small, and medium enterprises. If policy makers enforce mandatory
disclosure of diversity and inclusion data, the financing gap and the social and cultural norms holding women back become visible, and therefore easier to change.
Peter van Mierlo, CEO of FMO: “If it was mandatory to report on diversity and inclusion data – including the number of female entrepreneurs in financial institutions’ portfolios – we could develop targets, quotas, KPIs and make the gender gaps visible.”
6. Invest in distinguishing and scaling the change-making interventions
We have decades of experience with banking on women and empowering female entrepreneurs and supporting their business growth across the globe. We need more research, impact evaluation and sharing to showcase good practices. Once we can identify those change-making interventions with most potential for improving women’s financial inclusion and business support, we can prioritize the design, funding, and implementation of those interventions that are most likely to benefit female entrepreneurs in emerging markets.
7. Invest in cross-sector partnerships and collaboration
To speak louder, push harder for a gender inclusive eco-system, we need collective efforts, innovative partnerships, carry joint responsibilities, engagement and action of multiple stakeholders –including female entrepreneurs themselves, the men and boys in their homes, markets and communities as well as financial institutions, women’s organisations, NGOs, business networks, cultural and religious leaders and policy makers. There are a lot of separate initiatives popping up, and these need to be linked in order to be effective and to explore scale-up. We need capacity to build cross-sector partnerships, build bridges between stand-alone initiatives and to support women organisations both at grassroots and international levels.
Saskia Vossenberg, senior gender finance advisor at FMO:
There’s a shift happening within the global financial institutions sector and momentum has been building up to partner with local NGOs, women’s business networks for financing female entrepreneurs more and better. We need to do this now and do it together, because we all represent pieces of the puzzle.
Narcisa Cruz Sosa, a ceramics artisan from Peru and one of the participants of CARE’s Women in Enterprise programme, travelled to the Netherlands to speak at this event. Read her story on Skillpower.