Women-Owned SMEs: A Business Opportunity for Financial Institutions

A Market And Credit Gap Assessment and IFC's Portfolio Gender BaselineWomen-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 non-financial 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. One of the biggest barriers for increased access to finance for women-owned enterprises is the lack of reliable data disaggregated by gender: this further hinders the opportunity to make the business case to financial institutions on supporting women-owned enterprises. Commercial banks need to have a better understanding of the existing market potential as well as constraints facing women-owned SMEs—at a country and regional level—in order to design strategies and offerings that will allow them to better cater to the unmet financing needs of women entrepreneurs, and thus to profit from the commercial opportunities that this demographic presents.