What are we learning about supporting women-owned small businesses with digital finance?

Today is International Women’s Day, a day to recognize women’s achievements and take action to drive gender parity. This year’s theme is #EmbraceEquity, with a focus that gender equity needs to be part of every society’s DNA.

At Strive Community, we couldn’t agree more. Globally, one in three businesses are owned by women, who often face major financial and non-financial constraints. For instance, women encounter obstacles in financing, owning, and growing a business. IFC estimates a $1.7 trillion gap in financing for formal, women-owned small businesses worldwide (approximately one-third of the total financing gap), who account for an outsized share of the overall finance gap for micro- and small businesses.

We recently published an insight brief that explores digital finance for women-owned businesses. The brief takes a closer look at how digital financial services (DFS) are offering opportunities to micro- and small women-owned businesses around the globe. We provide examples of positive impacts that women business owners have experienced through adopting and using DFS and outline where more work needs to be done. We also highlight what we are learning about how to support women-owned businesses with DFS, including:

• Collecting and using data on women and women-owned small businesses. Gender-disaggregated data is critical for building the business case for targeting women-owned small businesses as providers that collect and analyze this data develop a more accurate picture of the opportunity to serve women. For example, KCB Bank in Kenya began tracking gender data among their micro- and small-business customers, enabling them to better support women. Now, 51% of loans go to women, compared to just 22% in 2015.
• Designing products that meet the needs and behaviors of women-owned small businesses. One way DFS providers can design products for women-owned small businesses is by considering a women-centered design approach, such as that developed by Women’s World Banking. For example, DFS products could be designed to strengthen women’s financial control and privacy. Providing women with mechanisms to set aside money for their business can help insulate these funds from other household financial demands.
• Building familiarity and confidence with training and trusted channels. Reaching women through networks and channels that they already use and trust is one way to encourage their use of DFS. For example, CARE, which partnered with the Mastercard Center for Inclusive Growth on its Ignite program, found that a balance between digital and in-person support can help gain the trust of women entrepreneurs.

We remain committed to promoting the meaningful use of relevant financial services, especially for women-owned small businesses, which often experience significant financial and digital constraints. In Nigeria, we’re working with Boost Technology to develop and test how data analysis, behavioral science, and conversational commerce can empower female small retailers to digitalize their businesses and increase their digital confidence. In Colombia, we’re working with Open Contracting Partnership, building on their ongoing work to create a solution to unlock financing for small businesses, particularly women-owned businesses that are awarded government contracts. More recently, we’ve partnered with Accion to digitally empower MSEs throughout Kazakhstan and Uzbekistan, with a particular focus on women.

Looking ahead, we invite you to explore this insight brief in more detail and share with us what you’re learning about supporting women-owned small businesses with DFS. As we uncover insights and best practices about digital financial services for women-owned small businesses, we will continue to share our learning.

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