Women-owned SMEs : a business opportunity for financial institutions - a market and credit gap assessment and IFC's portfolio gender baseline

Abstract

Women-owned small and medium enterprises (SMEs) make significant contributions to the economies in which they operate. However, female entrepreneurs face a range of financial and nonfinancial challenges in realizing their growth potential, and are more likely than their male counterparts to cite access to finance as a major or severe constraint on their business operations. In addition, financial institutions have not yet realized the business opportunities of meeting the specific financing needs of women entrepreneurs as a distinct customer group. On this basis and building off of the existing research on women’s entrepreneurship, the first section of this report seeks to estimate the global and regional size of the market for financial services represented by women-owned SMEs operating in the formal (registered) sector. It looks at the financing gap they face, as well as common financial and non-financial barriers faced by women entrepreneurs. The second section of the report provides an estimate of IFC’s global reach to formal women owned SMEs including the share of lending to formal women-owned SMEs across IFC’s Financial Institutions Group portfolio, while highlighting the financial and operational characteristics for women–owned SMEs that have received financing from IFC client financial institutions. While the market and credit gap assessment presents a global assessment, IFC’s reach is related to IFC’s specific experience through its client bank portfolio and not a global representation.