The World Bank announced the creation of what it describes as innovative new facility for women entrepreneurs at the G20 summit in Germany.
The Bank in a press release said the facility “aims to enable more than $1 billion to advance women’s entrepreneurship and help women in developing countries gain increased access to finance, markets, and networks necessary to start and grow a business.”
While the facility is likely to be helpful, the volume of financing is a drop in the ocean considering the financing gap for women entrepreneurs even in Africa alone. The financing gap is currently estimated at $42 billion. According the African Development Bank, $15.6 billion of that is lacking for women in agriculture.
The Bank however, further indicated that the Women Entrepreneurs Finance Initiative (We-Fi), which is the first World Bank-led facility to advance women’s entrepreneurship at this scale, will work to enable more than $1 billion of financing to improve access to capital, provide technical assistance, and invest in other projects and programs that support women and women-led SMEs in World Bank Group client countries.
“The goal of the facility is to leverage donor grant funding – currently over $325 million – to unlock more than $1 billion in International Financial Institutions and commercial financing by working with financial intermediaries, funds, and other market actors,” it said.
The Bank acknowledging, that women entrepreneurs face numerous challenges to financing, owning, and growing a business, including limited access to capital and technology, a lack of networks and knowledge resources, and legal and policy obstacles to business ownership and development, noted that the We-Fi will work to break down barriers to financial access and provide complementary services such as capacity building, access to networks and mentors, and opportunities to link with domestic and global markets as well as improve the business environment for women-owned or women-led SMEs in supply chains across the developing world.
It stated that We-Fi builds on the success of past and current Bank Group programmes while reaching into new areas, supporting women-led businesses at earlier stages of growth, and unlocking access to equity and insurance services. At the same time, the facility aims to support complementary public sector interventions that strengthen the enabling environment and enhance market opportunities for women-owned businesses.
“We-Fi differs from current efforts in that it represents a platform to align country-level reforms and private investment, build on and implement lessons learned about what works for starting and growing female owned/led firms, collect key data from the public and private sector on female entrepreneurs and their firms, and support innovation and learning for results at scale,” it said.
World Bank Group President Jim Yong Kim was quoted as saying, “Women’s economic empowerment is critical to achieve the inclusive economic growth required to end extreme poverty, which is why it has been such a longstanding priority for us.This new facility offers an unprecedented opportunity to harness both the public and private sectors to open new doors of opportunity for women entrepreneurs and women-owned firms in developing countries around the globe.”