The UN and the IDB have warned this week about the challenges that still exist in financing companies run by women. These challenges require investment that goes beyond capital. Here we explain.
Although there has been progress in recent years, there are still “challenges” in offering financing programs for women and their businesses , for which investments that go beyond financial capital are needed.
This was alerted by the Inter-American Development Bank (IDB) and UN Women through the report “Financing programs for the financial inclusion of women and access to financing for MSMEs: Results of a survey of public development banks”, which presented this Wednesday in Cartagena de Indias.
The document, revealed during the Finance in Common Summit (FiCS), the largest global development banking meeting, notes that ” while public development banks (PDBs) today offer a variety of programs to improve access to credit for women, investments are needed that go beyond financial capital.
This with the goal of “addressing the unique needs of women and their businesses and driving a more inclusive financial sector.”
“PDBs play a key role in improving access to credit for MSMEs and act as catalysts of change to achieve a more inclusive financial sector,” said the lead specialist of the IDB’s Connectivity, Markets and Finance Division, Gabriela Andrade. .
The expert highlighted that the report “found that the sector is investing in programs to improve access to credit for women, but there is still a significant opportunity to expand these types of solutions both in terms of their scope and the types of programs offered “.
To develop the report, a survey was carried out, completed by 54 public development banks, and it emerged that 91% of those questioned also included products designed for women as part of their programs for micro, small and medium-sized enterprises (MSMEs), for which they generally offer working capital and investment loans with lower interest rates and non-financial support.
However, the report points to the lack of sex-disaggregated data and limited understanding of the financial needs of women’s MSMEs as the main challenges in the sector.
Nor, the document says, are there guarantees, just as there is a problem with limited credit history, which is a barrier to expanding financing programs for women.
In that sense, the head of Economic Empowerment at UN Women, Jemimah Njuki, stated that “to really make a difference,” investments must go “beyond financial capital.”
“Capacity building, mentoring and access to networks are essential components that can drive women-owned businesses towards sustainable growth,” she added.
Njuki added that this involves designing “financial products and programs that address the unique needs of women and recognize their diverse roles.”
“Furthermore, impact must be measured not only in terms of economic outcomes, but also in terms of social and environmental benefits. We encourage public development banks to take a long-term perspective, aligning their strategies with broader equality goals. gender and sustainable development,” she said.
Businesses owned or run by women comprise 23% of the world’s MSMEs and face a $1.5 trillion funding gap, according to the SME Finance Forum.
Likewise, the Global Findex 2021 noted that 27.7% of women over 15 years of age borrowed money from a financial institution, compared to 30.6% of men.
For that reason, more than two-thirds of BPDs surveyed value positive social impact and growing market potential as opportunities to expand programs for women-owned MSMEs.