Women Entrepreneurs Finance Initiative allocates first round funding

The Women Entrepreneurs Finance Initiative (We-fi) yesterday announced its first funding allocations that is expected to mobilize over US$1.6 billion in additional funds from an allocation of US $120 million for programmes designed to knock down the unique barriers facing women entrepreneurs in developing countries.

The first round includes funding for proposals from the Islamic Development Bank to complement and expand successful initiatives in Yemen, Mali and Nigeria; the Asian Development Bank to improve the business environment for women in Sri Lanka; and the World Bank Group for global, regional and country specific activities to increase public and private sector support for women in business, with a focus on the poorest and most fragile environments.

We-fi, which has received over US$340 million from 14 governments, initially set out to mobilize US$800 million in additional financing from the private sector, donors, governments and other development partners, but expected mobilization from today’s first round of allocations exceeds those expectations.

In addition, fifty-eight percent of the first allocations will go to IDA countries or states affected by fragility, conflict or violence, putting We-fi on track to exceed its commitment to devote half its portfolio to those areas.

“We know that everyone benefits when women have the resources they need to fully participate in economies and societies,” said World Bank Group President Jim Yong Kim.

“By harnessing the public and private sector, We-fi creates an unprecedented opportunity to maximize financing for women entrepreneurs in developing countries, so that they have a real and fair chance to start and run businesses, create wealth, share in prosperity, and achieve their highest aspirations.”

Some 70 percent of women who own small and mediumsized enterprises (SMES) in the developing world currently can’t get the financing they need. They are either shut out of financial institutions, or can only get high-interest, short-term loans, resulting in a US$1.5 trillion credit deficit for women entrepreneurs in emerging markets. Women also often lack access to the technologies, market connections, networks, and training necessary to build and maintain a successful business.

We-fi, announced last July at the G-20 Summit in Hamburg, Germany, is an innovative, new facility that supports womenled businesses and works with governments to improve the laws and regulations stifling women entrepreneurs in developing countries.

“The response from stakeholders in both emerging and advanced markets has been enthusiastic and immediate, clearly demonstrating the urgent need to scale up efforts to help women entrepreneurs in developing countries,” said Priya Basu, head of the We-fi Secretariat at the World Bank. “We-fi fills a critically important gap; it’s the first significant fund committed to tackling the full range of barriers facing women entrepreneurs across the developing world.”

Today at its Spring Meetings, the World Bank Group will host a session on closing the digital economy gap facing women entrepreneurs.

We-fi is supported by the governments of Australia, Canada, China, Denmark, Germany, Japan, the Netherlands, Norway, the Russian Federation, Saudi Arabia, Republic of South Korea, the United Arab Emirates, the United Kingdom, and the United States.

We-fi was established as a Financial Intermediary Facility (FIF), which allows the international community to provide a direct and coordinated response to global priorities. FIF funds can be raised from multiple sources, both public and private, and are usually transferred to external agencies (e.g. United Nations or Multilateral Development Banks) to implement activities.

Under the first round of funding ADB was granted US$12.6 million for a programme on “Enabling an Empowering Business Environment for Women Entrepreneurs in Sri Lanka”. ADB’S programme aims to improve the business environment for women-owned/led SMES in Sri Lanka, build the capacity of women entrepreneurs, improve access to finance, and strengthen evidence and data. The programme will contribute to reducing Sri Lanka’s gender credit gap, estimated at US $350 million. ADB will work closely with national-level partners including 10 participating financial institutions, the Government of Sri Lanka, and local chambers of commerce.