Giving Women Better Access to Finance Could Unlock $330Bn in Annual Global Revenue
CARE is firmly convinced that financial inclusion is one of the best ways to break the cycle of poverty for women. The international development organisation highlights stark differences in the access provided to men versus women. CARE recently released encouraging data from its recent work and global research, showing that women are a high value investment.
A lack of access to finance is one of the major barriers facing women entrepreneurs in low-income communities. 80% of women owned businesses with credit needs are either unserved or underserved – a $1.7 trillion financing gap. By working with women on how to collectively save money, develop their business skills and facilitating access to affordable loans, CARE has seen an astounding uplift in success rates.
In Ethiopia, CARE has recently supported 5,000 women entrepreneurs in this way, resulting in an increase in their income of 500%. The programme supported women entrepreneurs from the slums of Addis Ababa to set up or expand their own businesses. Approximately 70% did not have any savings in the beginning of the project – this number was reduced to 3.6% when the project concluded three years later.
All data points in the same direction: investing in women’s economic empowerment is critical to unlock their economic and social potential. Women are shown to be stronger savers, more prudent borrowers and calculated risk-takers. Giving women better access to financial products and services could unlock $330 billion in annual global revenue.
CARE is therefore calling on the global financial sector to improve products and services for women. This will not only have a positive impact on individual women, but also their communities and, ultimately, national economies.
Through CARE’s ‘Access Approved’ campaign, women from Sri Lanka, Ivory Coast, Jordan and Peru share their stories on film for the first time, telling the banks what they think is needed to open up access to finance for women. These new films aim to bring the real issues to the fore, providing clear and personal recommendations to the financial sector including:
- Develop products and services that are specific to women’s needs (Martha from Peru)
- Offer alternative solutions to collateral requirements, such as loans based on savings group activities, and introduce loans with more flexible repayment terms (Jeanne from Ivory Coast)
- Train and employ more women within the financial industry (Sarojini from Sri Lanka and Bara’a from Jordan)
Women face all kinds of hidden barriers to accessing finance – just because they are women. Take Yeo Nakoni, a female vegetable farmer from the Ivory Coast: “I’ve worked this land now for 35 years, but the land doesn’t belong to me. In our community women don’t own land, it belongs to men.” This systemic inequality is then compounded when women try to access finances to grow their businesses: “When we go to the bank to ask for a loan, we’re denied because we have no collateral.”
Yeo is part of CARE’s Women in Enterprise Programme, supported by H&M Foundation, which has reached 133,000 women entrepreneurs globally since 2014. Yeo is a member of a savings group, based on CARE’s flagship Village Savings and Loans Association model. In her words: “This approach allowed us to strengthen our group spirit, savings and especially the repayment of loans taken out from the group. Every Sunday we each put in 500 francs (0.86 USD) and from that we are able to give each other loans. We repay our loans with interest, so our fund can grow. Within the group we can help each other. What we can do as a group, you can’t do by yourself.”
However, sometimes group members require larger loans and other financial products to meet their business needs. This is why CARE also supports savings groups to link safely to formal financial service providers. Thanks to CARE’s partnership with a local microfinance provider, Yeo was able to take out a low-interest loan of around 2,500 USD to expand her enterprise. She is now confidently repaying her loan and she is extremely proud of what she has achieved.
Laurie Lee, Chief Executive, CARE International UK comments: “Investing in women entrepreneurs is not just the right thing to do. It’s the smart thing to do. Women represent an enormous untapped market for financial institutions and we want to work with them to open up new opportunities. This makes business sense for both financial institutions and the women we support.”