World Bank starts initiatives to improve funding access for female entrepreneurs
The Washington-based lender aims to help address the gender financing gap in emerging markets
The World Bank is rolling out two new initiatives to facilitate access to financing and and e-commerce markets for female entrepreneurs in developing and emerging economies.
The ScaleX programme will incentivise accelerators in emerging markets to support start-ups led by women, the Washington-based lender said in a statement on Sunday. The bank is also teaming up with UPS to help female entrepreneurs in the Middle East and North Africa grow their businesses by leveraging e-commerce platforms.
“Starting and growing a business is one of the most powerful tools for women to overcome poverty and build better lives for themselves, their families, and their communities,” David Malpass, the World Bank Group's president, said. “Removing regulatory barriers along with obstacles to access to finance and markets can give women-led businesses the opportunity to succeed.”
The initiatives address the "daunting" gender gap that female entrepreneurs in emerging markets face and the difficulty of securing financing. Only 11 per cent of start-ups that secure seed-funding are led by women, according to research by the International Finance Corporation (IFC). Research also shows that despite women leading half the start-ups that participate in accelerators, they continue to face greatly unequal access to capital. Accelerators are entities that train and support start-ups in their development until they become ready for investment.
The ScaleX programme was launched by the Women Entrepreneurs Finance Initiative (We-Fi), which is based at the World Bank, and the IFC at the Global Women’s Forum Dubai 2020 held in the emirate this week.
To date We-Fi has allocated nearly $250 million (Dh918m) to tackle challenges businesswomen face in developing countries, the World Bank said. The allocations are set to reach 114,000 female entrepreneurs.
The programme will offer incentives to accelerators in emerging markets to work with women-led businesses by providing performance-based payments of $25,000 for every female entrepreneur that raises $1m from investors in start-up funding.
"We are launching the ScaleX programme to help women entrepreneurs in emerging markets to access funding at a crucial stage to grow their businesses,” Sérgio Pimenta, IFC regional vice president for Middle East and Africa, said. “This is a win-win for accelerators, investors, and women entrepreneurs.”
Through its other initiative, in which the World Bank partnered with UPS, the lender will help female entrepreneurs in the Mena region to access e-commerce markets more easily.
“By making e-commerce platforms more accessible, this partnership addresses a key constraint faced by women business leaders in reaching new markets,” Ferid Belhaj, World Bank Mena vice president, said. “E-commerce platforms create opportunities, and we must ensure these opportunities are open to women-owned businesses across the region.”
UPS will provide e-learning modules on various e-commerce topics to help women-owned and women-led small and medium enterprises seeking to expand their businesses across borders, according to the statement.
The project will support an estimated 750 women entrepreneurs and train e-commerce advisers in each country who will help and coach businesses. The partnership will work with entrepreneurs in Algeria, Djibouti, Egypt, Jordan, Lebanon, Morocco and Tunisia.
We-Fi has made allocations to programmess being implemented by the African Development Bank, the Asian Development Bank, the European Bank of Reconstruction and Development, the Inter-American Development Bank, the Islamic Development Bank and the World Bank Group.
The World Bank and IFC's We-Fi programmes, which have $75m in allocations, are working with private and public partners in 24 countries through 27 investment and advisory projects to enable women entrepreneurs to access finance and markets.
The initiatives come amid a grim backdrop of economic gender inequality.
Women will have to wait a shocking 257 years to close the “economic opportunity gap” with men, even worse than the 202 years predicted for this category in 2018, according to the World Economic Forum's Global Gender Gap Report 2020.
Published: February 16, 2020 02:46 PM