(Just) One Step in the Right Direction: The Women Entrepreneurs Finance Initiative
Last week the leaders of the world’s most powerful economies gathered in Germany for the G20 summit. Among their many discussions, they spent some time focused on women entrepreneurs and the challenges they face. Acknowledging the $285 billion gender credit gap, G20 leaders announced the establishment of the new ‘Women Entrepreneurs Finance Initiative’ (WE-FI), which will be housed at the World Bank.
The initiative targets women-owned small and medium-sized enterprises (SMEs) and is expected to provide about $1 billion to improve women-owned SMEs’ access to capital, as well as provide them with technical assistance, market linkages and networks and mentors. The initiative has already raised $325 million in contributions from donor countries, including the United States, Germany, the UAE, Saudi Arabia, Canada, Australia, Denmark and Norway.
What’s our take on the Women Entrepreneurs Finance Initiative?
Overall, it’s a positive step toward promoting women’s economic empowerment — and it’s impressive to see a range of donors championing the issue and acknowledging women’s significant contributions as economic actors to global growth. But it’s also important to keep in mind that the initiative on its own is not a silver bullet. It will need to be governed carefully, as well as followed by significant additional investments in women’s health, education, access to quality jobs, and personal security and agency.
We’re glad to see donor governments recognizing the importance of women’s entrepreneurship. Promoting gender equality within the economy is an essential foundation for the eradication of poverty and the promotion of global economic growth, with positive impacts for children’s health and education, communities’ stability and security, and countries’ growth and prosperity.
It’s also encouraging to see that WE-FI will take a strategic, holistic approach to promoting women’s entrepreneurship — going beyond providing capital to engage with a broader range of gender-specific constraints women entrepreneurs face, from legal discrimination to limited access to procurement channels and market information.
What’s Still Left to Do…
Invest in other women entrepreneurs: That said, it’s important that while we celebrate this win for a segment of women, we don’t forget the bigger picture. Women-owned SMEs are just a subset of women-owned businesses; most women in the poorest countries work in the informal sector and many operate microenterprises. WE-FI will not be reaching these women directly, so additional investments will be needed to target the poorest.
Invest more broadly in women’s economic empowerment: Beyond entrepreneurship, many women need access to and protection within other types of jobs — whether they work as farmers or as employees in a factory, for example. Investments and interventions that improve the access to and quality of these workplaces will be equally necessary for all women to be truly economically empowered.
Invest in women and girls’ full range of rights: Economic empowerment is also dependent on investments in gender equality across a range of sectors. Women need to be healthy, educated, have autonomy over their bodies and feel safe and represented in their communities in order to thrive in business. Continued — and increased — investments in all of these areas are required in order for us to make meaningful progress toward achieving SDG 5 (‘Achieve gender equality and empower all women and girls’) and many other SDGs that depend upon its achievement.
There’s some cause for concern along these lines when we look at the initiative’s initial donors. WE-FI accepted an initial investment from Saudi Arabia (ranked 141 out of 144 countries in the World Economic Forum’s Global Gender Gap Index, where women have the legal status of minors). While pledging a US contribution to WE-FI, President Trump has proposed cutting over 30 percent of the overall aid budget, including the elimination of the budget for the State Department’s Office of Global Women’s Issues. Even Canada, with the recent announcement of its ‘feminist foreign policy,’ has not increased its international assistance budget to complement its new ambitious rhetoric around championing the rights of women and girls.
Bottom line: WE-FI has the potential to meaningfully increase women’s access to capital, markets, skills training opportunities and other resources that will allow them to thrive as entrepreneurs. But in order to ensure impact, the initiative must be developed with women’s full range of rights in mind, so donors and country governments must continue to prioritize gender equality-focused investments across all sectors.