WASHINGTON — A much-vaunted new financing facility to support women-owned businesses in the developing world announced the first round of funding on Thursday as gender experts came forward with suggestions for how the World Bank-managed fund can best operate in the sector.
The Women Entrepreneurs Finance Initiative, or We-Fi, officially launched in October at the suggestion of United States President Donald Trump’s daughter and adviser Ivanka Trump, is to hand out $120 million in funding split between the World Bank, Islamic Development Bank, and Asian Development Bank to support work on women’s economic empowerment.
The money is expected to leverage an additional $1.6 billion in financing from the private sector, according to a World Bank press release.
The inaugural grants were announced during the World Bank Spring Meetings in Washington, D.C., this week, and are coming out of We-Fi’s $340 million pot raised from 14 governments.
See more coverage of the World Bank Spring Meetings:
We-Fi aims to help address the fact that approximately 70 percent of women-owned small and medium-sized businesses in the developing world are unable to access the funding they need to grow their enterprises, resulting in a $260 to $320 billion per year financing gap, according to World Bank estimates. Women in business also face other barriers, including difficulties in accessing the technologies, market connections, networks, and training they need to grow and manage their enterprises.
The World Bank will take the lion’s share of the first pot of We-Fi funding, receiving $75 million in total, to be split between the International Finance Corporation, which will receive $49 million for private-sector initiatives, and the World Bank which is getting $26 million for public sector activities.
Some $32 million in funding will also go to the ISDB to complement and expand existing projects in Yemen, Mali, and Nigeria. The ADB will receive $12.6 million in funding to improve the business environment for women in Sri Lanka, according to a press release.
Priya Basu, head of the We-Fi secretariat hosted at the World Bank, described We-Fi as the “first significant fund committed to tackling the full range of barriers facing women entrepreneurs across the developing world,” and is thus filling a “critical gap.”
“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,” World Bank Group President Jim Yong Kim said in a press release.
On the same day that the inaugural We-Fi grants were announced, gender experts from civil society offered insights and recommendations to We-Fi’s secretariat about how to make We-Fi as effective as possible for women in developing countries.
Here are five key recommendations:
1. Don’t just focus on supply and input solutions
Speaking at a civil society forum session held alongside the Spring Meetings, Oxfam America’s director of policy and research Gawain Kripke said that most economic empowerment interventions are overly focused on “supply-driven initiatives” such as increasing access to finance and other inputs. Instead, they need to dedicate more time to thinking about other constraints facing women such as whether they are safe going to and from work, and women’s agency.
“There is a lot of energy and increasing resources being put around women’s economic empowerment … but there is a risk that the focus is too much on … supply through the formal elements … and less on the enabling environment,” Kripke said.
Instead, the Oxfam policy director wants interventions to focus more on things “behind the contract,” such as whether a woman is allowed to travel unaccompanied or is experiencing gender-based violence at home or at work. “If we don’t make progress on that, we are not going to see women’s economic advancement,” he said.
2. Social norms and how to engage men
Sarah Gammage, director of gender, economic empowerment, and livelihoods at the International Center for Research on Women, said economic empowerment programs need to be more thoughtful about how they engage in economic empowerment initiatives, including interrogating the root causes of violence and “engaging men in a collaborative way.”
“We need to think a lot more about social norms … couples communication … and behavioral and social change and how you to begin to crate the factors that move that forward in a way that is enhancing for everybody’s welfare.”— Sarah Gammage, director of gender, economic empowerment, and livelihoods at the International Center for Research on Women
She pointed to ICRW research in Nepal which showed that contrary to expectations, women who entered the formal workforce were often more exposed to sexual violence in their homes — not less — as a result of “disempowered men … trying to retrieve power by exerting more violence” on their partners.
“We need to think a lot more about social norms … couples communication … and behavioral and social change and how you to begin to crate the factors that move that forward in a way that is enhancing for everybody’s welfare,” she said.
3. The care economy is the biggest barrier
The “care economy and how it interrelates with the formal economy” is the “challenge of our time” and will have the biggest impact on driving women’s economic empowerment, according to Kripke. On average, women spend twice as many hours performing unpaid care work than men and this is directly correlated to women spending fewer hours working in the formal economy, Kripke said. However, the issue of unpaid care work is “missing in a lot of policy measures” aimed at promoting women’s economic empowerment, he said.
Considering its focus on women-owned businesses and its aim to “unlock finance with great expectations of spillover” benefits, We-Fi must therefore “recognize, reduce, and redistribute” the burden of unpaid care work, Gammage said. This can be done by supporting “an enabling environment to redistribute care between the market and the state, between households, and between men and women,” she added.
4. Think about market structures
“Power is something deeply embedded in the market,” Gammage said. As We-Fi seeks to channel finance to women entrepreneurs it needs to examine the market structures they engage in, she said. We-Fi’s grantees must pay attention to governance, regulation, and transparency of markets which are all “critical for that enabling environment,” she said.
Reforming public procurement policies to make them more gender-responsive and easier for women-owned businesses to access and win government contracts could be one proactive way of doing that, Gammage added.
5. Property rights and social protection are key
The ICRW director also made a plea to We-Fi bosses not to forget about the importance of a woman’s right to own and dispose of property and also rights to health and other social protections.
“Businesses thrive when they are less subject to shocks, and insurance markets aren’t the only way to reduce your exposure to shocks; social protection, health care, access to different types of transfers that allow you to overcome ill health or unemployment are going to be critical too,” she said.
“So, let’s make sure we’re not channeling credit into economies to make more informal employment, let’s really think also about that underpinning in terms of social protection,” Gammage added.