Business & Economy

UN, IDB warn of funding challenges for women and their businesses

Cartagena, Colombia, Sep 6 (EFE).- Despite recent progress, there remain “challenges” in providing financing programs for women and their businesses that require investments beyond just financial capital, Inter-American Development Bank (IDB) and UN Women warned in a report unveiled on Wednesday in the Colombian port city of Cartagena.

The report, centering on financing programs for women’s financial inclusion and access to Financing for SMEs, was released during the Finance in Common Summit (FiCS), the world’s largest gathering of development banks.

It indicates that while public development banks (PDBs) currently offer a variety of programs to enhance credit access for women, there’s a need for investments that go beyond financial capital to address the unique needs of women and their businesses and foster a more inclusive financial sector.

“PDBs play a pivotal role in enhancing credit access for SMEs and act as catalysts for change to achieve a more inclusive financial sector,” said Gabriela Andrade, lead Specialist of the Connectivity, Markets, and Finance Division at the IDB.

Andrade stressed that the report found “the sector is investing in programs to improve credit access for women, but there remains a significant opportunity to expand these solutions in terms of both scope and the types of programs offered.”


To compile the report, a survey was conducted, completed by 54 public development banks. It revealed that 91% of the respondents also offer products designed for women as part of their programs for women-owned micro, small, and medium-sized enterprises (SMEs), typically providing working capital, investment loans with lower interest rates, and non-financial support.

However, the report indicates that the lack of gender-segregated data and limited understanding of the financial needs of women-owned SMEs are the major challenges in the sector. The report also highlighted the absence of guarantees and issues with limited credit history, which pose barriers to expanding financing programs for women.

Jemimah Njuki, Head of Economic Empowerment at UN Women, said that for investments “to truly make a difference, they need to go beyond financial capital.”

“Capability development, mentorship, and access to networks are essential components that can propel women-owned businesses toward sustainable growth,” she said, noting the importance of designing “financial products and programs that address women’s unique needs and recognize their diverse roles.”

“Moreover, the impact should be gauged not just in economic outcomes but also in terms of social and environmental benefits. We encourage public development banks to adopt a long-term perspective, aligning their strategies with broader objectives of gender equality and sustainable development,” she said.

Companies owned or led by women account for 23% of SMEs globally and face a financing gap of $1.5 trillion, according to the SME Finance Forum. Additionally, the 2021 Global Findex indicated that 27.7% of women over 15 borrowed money from a financial institution, compared to 30.6% of men.

More than two-thirds of surveyed PDBs view positive social impact and the growing market potential as opportunities to expand programs for women-owned SMEs. EFE



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