On the occasion of the G20 leaders’ summit, the World Bank Group on July 8 announced the creation of an innovative new facility that aims to enable more than US$1 billion to advance women’s entrepreneurship and help women in developing countries gain increased access to the finance, markets, and networks necessary to start and grow a business.
According to the press release issued by the World Bank Group, the United States initiated the idea for the facility and will serve as a founding member along with other donor countries.
“Women’s economic empowerment is critical to achieve the inclusive economic growth required to end extreme poverty, which is why it has been such a longstanding priority for us,” World Bank Group President Jim Yong Kim said. “This new facility offers an unprecedented opportunity to harness both the public and private sectors to open new doors of opportunity for women entrepreneurs and women-owned firms in developing countries around the globe.”
The Women Entrepreneurs Finance Initiative (We-Fi), the first World Bank-led facility to advance women’s entrepreneurship at this scale, will work to enable more than $1 billion of financing to improve access to capital, provide technical assistance, and invest in other 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 – currently over US$325 million – to unlock more than $1 billion in IFI and commercial financing by working with financial intermediaries, funds, and other market actors.
The World Bank Group was reportedly invited to create the facility by the United States and Germany, given the Bank Group’s deep experience, track record, and strong learning and innovation agenda. The initiative received strong donor support Australia, Canada, China, Denmark, Germany, Japan, Netherlands, Norway, Saudi Arabia, South Korea, United Arab Emirates, United Kingdom, and the United States, enabling the Bank Group to take the facility from concept to Board endorsement within the year of the German G20 presidency.
We-Fi builds on the success of past and current Bank Group programs 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-owned businesses.
We-Fi differs from current efforts in that it represents a platform to align country-level reforms and private investment, build on and implement lessons learned about what works for starting and growing female owned/led firms, collect key data from the public and private sector on female entrepreneurs and their firms, and support innovation and learning for results at scale.
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.
We-Fi 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 improve the business environment for women-owned or women-led SMEs in supply chains across the developing world, the press release said, noting that one of the major constraints limiting female-led enterprises is access to financial services. Nearly 70 percent of women-owned SMEs in developing countries are reportedly either shut out by financial institutions or are unable to receive financial services on adequate terms to meet their needs.
The facility will be established as a Financial Intermediary Fund (FIF) at the Bank, drawing on the Bank’s extensive experience housing such Funds.
The Bank and IFC will be Implementing Partners, as well as other Multilateral Development Banks that would propose private and public sector activities to be supported by the We-Fi facility.
