It is nearly impossible to sustain a business without access to capital. Estimates suggest that women-owned entities represent just over thirty percent of formal, registered businesses worldwide. Yet, seventy percent of formal women-owned Small and Medium Enterprises (SMEs) in developing countries are either shut out by financial institutions or are unable to receive financial services on adequate terms to meet their needs. This results in a nearly $300 billion annual credit deficit to formal women-owned SMEs. Lack of networks, knowledge, and links to high value markets further constrain female entrepreneurship.
Women entrepreneurs play a critical role in economic development by boosting growth and creating jobs, particularly for the poorest forty percent of the population. Yet, 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.
Women-led enterprises tend to be concentrated in retail and service sectors where profits and growth opportunities are lower, and rarely in more profitable industries such as construction, electronics, or software.
Lack of networks and knowledge also constrain female entrepreneurship. Studies show that men have more social connections that enable them to access business opportunities, information, and contacts than do women.
In this way, women are disadvantaged from the start, having fewer professional connections, role models, and mentorship opportunities, which can adversely affect their businesses in the long run.
To help unlock the potential of women entrepreneurs, the new Women Entrepreneurs Finance Initiative (We-Fi) will enable more than $1 billion in financing to improve access to capital, provide technical assistance, and invest in 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 of up to $200 million and mobilize up to $800 million or more in international financial institution and commercial financing, by working with financial intermediaries, funds, and other market actors, potentially through similar models as the International Finance Corporation’s (IFC) Women Entrepreneurs Opportunity Facility/Banking on Women program.
The We-Fi facility 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 improving the business environment for women-owned or women-led SMEs across the developing world.
We-Fi builds on the success of past and current programs of the World Bank Group and other partners, 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 entrepreneurs.
We-Fi fills a gap where there was no significant fund or facility committed to a holistic public and private sector approach to addressing the constraints faced by women entrepreneurs.
We-Fi provides dedicated resources to foster innovation and new approaches to removing these constraints for women entrepreneurs. It will also help elevate the issue to spur action by governments and private sector.
We-Fi is a Financial Intermediary Fund (FIF) housed at the World Bank, drawing on the Bank’s strong track record in designing and managing such Funds to ensure best practice in terms of governance and efficiency.
The Bank acts as the Trustee for the facility, drawing on its financial platform and extensive experience with the provision of such services for other FIFs; it would also serve as the Secretariat. Multilateral development Banks, including the World Bank and IFC, are eligible as implementing partners to propose private and public sector activities to be supported by the facility. A Governing Committee, composed of the founding contributors to the Facility will make allocation decisions.
The World Bank Group works with public- and private-sector clients to close gaps between males and females globally for lasting impact in tackling poverty and driving sustainable economic growth that benefits all. In the last two decades, the world has narrowed the divide between men and women, especially in primary education and health. Yet critical gaps remain.
Learn more about the World Bank Group’s work on gender.
World Bank Group Gender Equality Strategy
Gender equality is central to the World Bank Group’s goals of ending extreme poverty and boosting shared prosperity. No society can develop sustainably without transforming the distribution of opportunities, resources and choices for males and females so that they have equal power to shape their own lives and contribute to their families, communities, and countries.
The World Bank Group has deep experience working on gender equality and women’s economic empowerment in countries around the world. This includes:
2012 World Development Report on Gender Equality and Development
The 2012 World Development Report on Gender Equality and Development finds that women's lives around the world have improved dramatically, but gaps remain in many areas. The report examines progress to date, and recommends policy actions
Voice and Agency : Empowering Women and Girls for Shared Prosperity
This report identifies promising opportunities and entry points for lasting transformation, such as interventions that reach across sectors and include life-skills training, sexual and reproductive health education, conditional cash transfers, and mentoring.
Women, Business and the Law
Women, Business and the Law is a World Bank Group product that collects data on laws and regulations constraining women's entrepreneurship and employment.
Investing in Women
Investing in Women: New Evidence for the Business Case highlights how equal opportunities for women and men not only benefit the private sector, but also families, communities, and local economies.
EDGE Assess Certification for Gender Equality
Economic Dividends for Gender Equality (EDGE) is the leading global standard for gender equality in the workplace. The World Bank Group headquarters in Washington, DC, has earned the first level of EDGE certification, EDGE Assess, and is the first location of an international financial institution to attain this certification.
Banking on Women
Banking on Women works with an extensive network of financial institutions to increase access to finance for women entrepreneurs – especially those leading small-and-medium-sized businesses. As of June 2017, Banking on Women has invested, mobilized investment, and provided advisory expertise to 55 financial institutions in 36 countries, with a portfolio totaling US $1.44 billion. Banking on Women is strengthened by partnerships like the $600 million Women Entrepreneurs Opportunity Facility with Goldman Sachs and the US Overseas Private Investment Corporation.
Gender Innovation Lab
Gender Innovation Lab (GIL) conducts impact evaluations in four key areas including agriculture, private sector development, land & assets and youth employment, as well as a handful of impact evaluations that explore new areas of research or provide specific support to an ongoing project. The lab is currently working on more than 50 impact evaluations across Sub-Saharan Africa.
Making A Difference
Building up women-owned businesses in the Dominican Republic
Bertha Souri and her sister made all their daughters’ dresses at home. They received so many compliments about their home-sewn dresses that they decided to try selling to a local store. Like other women entrepreneurs in the Dominican Republic and around the world, the Souris had difficulty securing the loans to fund their business. Backed by a World Bank Group program, the bank extended the sisters a loan to order their first shipment of imported fabric. The loan was critical, enabling the company to work with the quality fabrics they needed to stay competitive with larger manufacturers.
Getting to yes in India
Dr. Seema Garg quit her well-paying job and used her life savings to launch SB Hospital and Healthcare Private Limited, a company that designs, builds and renovates hospitals. In 2014, she won a large contract for a 150-bed hospital in Delhi. In order to get the funds needed to get the project off the ground, Seema approached several banks only to hear that they were wary of extending credit to a single woman. Then, YES Bank stepped forward with the financing. The World Bank Group provided YES Bank with US$50 million to boost its efforts to lend to women such as Seema and unleash the potential of women entrepreneurs.
Increasing monthly profits in Ethiopia
Serkalem Belay owns an industrial machinery workshop. In Serkalem’s workshop, old vehicle parts are refurbished for re-sale. Under the Women’s Entrepreneurship Development Program (WEDP), Serkalem applied for a loan from Wasasa, one of the program’s microfinance institutions. In three months, Serkalem’s workshop has grown from six to twelve full-time employees, and her monthly profits have increased by 50%.
Knocking down barriers in Pakistan and Nigeria
Thanks to their business acumen and determination, Ishaq and Alim have become successful entrepreneurs. But their path wasn’t easy. Pakistan is a tough place for women entrepreneurs; in 2012, only 5% of the entrepreneurs in the country were women. Among other social and economic challenges, lower rates of education, limited access to finance, and limited exposure to professional networks represent key obstacles for women entrepreneurs in the country. To help women like Ishaq and Alim overcome these issues and launch their businesses, the World Bank Group launched WomenX. A key component of the program is a four-month business training designed to teach women core business skills, such as accounting, marketing, operations management, and basics of legal affairs. WomenX has launched similar initiatives to support 300 women in Lahore, 50 in Peshawar, 100 in smaller districts across Punjab, and 400 in Nigeria.
Getting technical in Albania
Erlisa Zherka is a 22-year-old finance math student from Kosovo. She recently landed a full-time contract with a US-based startup through the Women in Online Work (WoW) program, a World Bank pilot program funded by the Korea Green Growth Trust Fund and implemented by Danish firm CodersTrust and that aims to train beneficiaries on technical (information technology) and soft skills, which are in high demand.
A sample of WBG women’s economic empowerment projects around the world
The World Bank
India: A decade of World Bank support to the state of Bihar has transformed the lives of rural women who previously struggled to access credit from formal sources. More than 7,000 participated in groups self-help groups that saved nearly $64 million and leveraged $511 million from the formal financial sector. The project paved the way for a national women’s economic empowerment initiative in 13 of India’s poorest states. Delegations from more than 30 countries have visited the project, interested in replicating its success.
Nicaragua: 458,557 people, more than half women, benefited from a project to strengthen property rights through improved land titling and registry services from 2012 to 2015. More than 42,000 families have received legal documents for their property.
Pakistan: From 2009 to 2016, 359,887 new borrowers accessed micro-credit loans through the Pakistan Poverty Alleviation Fund. Women made up 78 percent of borrowers.
Senegal: 870,902 hectares of forests in Senegal were being sustainably managed in 2014, up from 400,000 hectares in 2008. The project led to an increase in charcoal-making revenue going to villages from 6 percent in 2009 to 52 percent in 2013, and also helped increase the share of income going to women from 3 percent in 2009 to 12 percent in 2013.
Solomon Islands: From 2010 to 2016, construction of community infrastructure employed 12,000 young people from vulnerable communities and created more than 664,000 days of employment in the Solomon Islands. 60 percent of the people employed were women and 53 percent were between the ages of 16 and 29.
Afghanistan: The World Bank and the Afghanistan Reconstruction Trust Fund support rural enterprise groups and small to medium-sized enterprises through the Afghanistan Rural Enterprise Development Program. The program helps strengthen market linkages and value chains for rural enterprises across Afghanistan by providing technical support to over 1,400 enterprise groups (63 percent female) and 500 small and medium-sized businesses (14 percent female), selected for their potential as key drivers of rural employment and income generation. The project also supports the Microfinance Investment Support Facility for Afghanistan, which provides microfinance to about 2,500 customers, 35% of which are women.
India: With 400 million people cut off from the electricity grid, IFC helped build a market for off-grid lighting products under its Lighting Asia/India program. Women entrepreneurs helped built a network of “solar sisters” to distribute low-cost solar products to thousands of people in remote areas.
Turkey: IFC partnered with the country’s largest retailer, Boyner Group, to help train women-owned suppliers in financial management—boosting their ability to obtain finance and improve business performance.
West Bank/Gaza: The IFC and the Bank of Palestine launched the Felestineya Mini-MBA program, an initiative to boost access to finance for female entrepreneurs and spur economic growth by promoting women-led businesses. Forty women graduated from the first cohort.
India: The IFC partnered with the with mobile-payments company FreeCharge to encourage more women entrepreneurs to sell their products on online retailer Snapdeal, improving their financial access through technology and digital payments.
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Financial Intermediary Funds (FIFs) are financial arrangements that typically leverage a variety of public and private resources in support of international initiatives, enabling the international community to provide a direct and coordinated response to global priorities. Most FIFs have supported global programs often focused on the provision of global public goods, preventing communicable diseases, responses to climate change, and food security. FIFs often involve innovative financing and governance arrangements as well as flexible designs which enable funds to be raised from multiple sources, both sovereign and private. Funds can be channeled in a coordinated manner to a range of recipients in the public and private sectors through a variety of arrangements. FIF structures are customized, depending on the needs of the partnership and agreements with the World Bank.
The World Bank's distinctive role across FIFs is the provision of financial intermediary services, as Trustee of the funds. For all FIFs, the World Bank provides a set of agreed financial services that involve receiving, holding and investing contributed funds, and transferring them when instructed by the FIF governing body. Under some FIFs, the Bank also provides customized treasury management or other agreed financial services; some examples include bond issuance, hedging intermediation and monetization of carbon credits.
FIF Trusteeship does not involve overseeing or supervising the use of funds. This is the role of other implementing agencies that receive funding and are responsible for project or program implementation. Transfers are generally made by the Trustee to external agencies (e.g. United Nations agencies or Multilateral Development Banks) for the implementation of activities. In the case of FIFs whose governing bodies have the legal and other required capacities to take on responsibility for the use of funds (e.g. Global Fund to Fight AIDS, Tuberculosis and Malaria), the Bank transfers funds received from donors directly to multiple third party entities, usually in recipient countries, based on instructions from and on behalf of the governing body.
There are two basic models in the Bank’s trusteeship portfolio, which currently includes more than 22 FIFs:
• In some FIFs (e.g. the GEF), the Bank as trustee enters into transfer agreements with implementing or supervising agencies, and transfers funds to these agencies upon instructions from the governing body. In turn, the implementing or supervising agencies enter into grant agreements to disburse funds to beneficiary recipients. The implementing or supervising agencies appraise and supervise the implementation of projects by such recipients and are responsible for monitoring the use of funds.
• In other FIFs (e.g. the Global Fund), the Bank as trustee makes direct transfers to recipient entities upon instructions from a governing body which has legal, oversight, and other essential capacities and assumes overall responsibility for the use of funds.
The Bank's technical, financial, and legal expertise is employed in designing and establishing FIFs. This includes legal and Treasury services, donor contribution management, accounting, reporting capabilities, prudent financial management policies, procedures and internal controls. The investment of liquid assets of FIFs is managed by the Bank's Treasury, with the primary objective of capital preservation. An emphasis has also been placed on IT systems infrastructure to support FIFs. The Bank uses integrated information systems that provide end-to-end financial transaction processing and support FIF governing bodies, implementing agencies and secretariats with required data and customized financial reporting.
In addition to its trustee role, the Bank may also be involved as an implementing agency responsible for appraisal and/or supervision of projects or programs financed by the FIF; by providing secretariat services to the FIF; and as a FIF donor.
For some FIFs, the Bank has provided upstream advisory support during the design phase (e.g., for the AMC and IFFIm). For others (e.g., the Global Fund), Bank operational teams provide downstream technical assistance to build local capacity for implementation. In cases where the Bank has been selected as an implementing agency by the FIF governing body, resources may be received by Bank operational units for the implementation of activities through IBRD/IDA trust funds. These roles are managed by different Bank vice-presidencies. In general, because different entities play different roles within the FIF structure, a key aspect of governance is the clear separation of roles and responsibilities within the Bank.