Despite important progress made in gender inclusive finance, women entrepreneurs and employers face greater challenges than men in gaining access to financial services.
90 percent of the 190 economies access to finance, according to the 2020 World Bank's Women, Business & the Law report have at least one regulation that impedes women-led MSMEs’ access to finance
100+ economies still prevent women from working in certain sectors
Men can legally prevent their wives from working outside the home in 18 countries
This Policy Framework proposes six pillars that regulators can adopt to facilitate access to finance for women-led MSMEs
Pillar 1 DEVELOP AN ENABLING ENVIRONMENT
Adapting financial services for women's businesses means ensuring that it is safe, reliable, convenient and cost-effective for women. Changes in monetary, fiscal, trade and industry polices, as well as those on family and taxation can create more conducive and enabling environment for women led and women-owned MSMEs.
Pillar 2 COLLECT SEX-DISAGGREGATED DATA
Collecting and analyzing sex-disaggregate data enables policymakers to identify who is and who is not being served by financial services. It is an opportunity for fine-tuning policy and reforming legal as well as regulatory frameworks to promote greater financial inclusion for women.
Pillar 3 BUILD SKILLS THROUGH TRAINING, MENTORING AND NETWORKS
Women-led and women-owned MSMEs require tailored support and skills to access and use financial services and grow strategically. Since women entrepreneurs operate different types of businesses, training content and methods needs to be differentiated.
Pillar 4 ALLOW ALTERNATIVE SOURCES OF COLLATERAL AND PROMOTE NEW WAYS OF BUILDING CREDIT Lack of access to physical collateral is a severe barrier for women-led MSME access to finance. Cases from Ghana, Liberia, and Argentina show that the use of informal instruments has been effective in helping to overcome women’s lack of access to formal credit.
Pillar 5 DEVELOP DFS FOCUSED ON WOMEN-LED MSMES
Digital financial services (DFS) are proving essential to the survival and recovery of women and small businesses as persistent economic uncertainty threatens the livelihoods of vulnerable groups.
Pillar 6 ENCOURAGE DIVERSITY AND FEMALE LEADERSHIP
An industry that intends to serve women but has no women in its leadership may miss complementary perspectives. Fostering women’s involvement in a strong and diverse MSME sector can have positive dividends for businesses and also community development.
Read the full report: POLICY FRAMEWORK FOR WOMEN-LED MSME ACCESS TO FINANCE
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