What We-Fi looks for in proposals to help women

ABIDJAN, Côte d’Ivoire — Last week, the Women Entrepreneurs Finance Initiative held its first regional summit in Côte d'Ivoire, bringing together entrepreneurs, the private, and public sector and a U.S. delegation, including the daughter of U.S. president, Ivanka Trump. Just weeks before We-Fi is expected to announce its second allocation of funding, Devex sat down with the head of the We-Fi secretariat, Priya Basu, to learn more about how We-Fi operates and what it looks for in proposals. “One thing we are quite clear about is that we are not a fund that is doing microfinance and we are not supporting microentrepreneurs.” --— Priya Basu, head, We-Fi secretariat How it works We-Fi was launched in 2017 with initial contributions of $350 million — with a goal of leveraging those funds to over $1 billion. These goals were surpassed in the first round of funding of $120 million, which leveraged over $1.6 billion. We-Fi, according to Basu, is the first significant fund of its kind to take an “ecosystems” approach to address the barriers facing women entrepreneurs. This includes targeting access to finance and markets, as well as tackling the legal, regulatory, and policy barriers that stunt the growth of female entrepreneurs. The fund is hosted by the World Bank and includes a partnership between 14 governments, eight multilateral development banks, and public and private sector partners. The fund was initially dubbed the “Ivanka Fund” after former World Bank President Jim Yong Kim credited Trump’s daughter for suggesting the initiative in 2017. But she does not play any formal role in its operations. We-Fi only accepts proposals from its partner multilateral development banks. This includes the African Development Bank, Asian Development Bank, European Bank for Reconstruction and Development, Inter-American Development Bank, IDB Invest, International Finance Corporation, Islamic Development Bank Group, and World Bank. After a proposal is submitted, an independent panel of technical experts review and score it. The panel then makes recommendations to the governing committee of We-Fi, which makes final decisions on funding. The governing committee is currently chaired by the U.S. and consists of representatives from the 14 partner governments. We-Fi then provides the funding to the MDBs, which usually blends those grants with nongrants. In some cases, these grant funds are not blended and are allocated directly to areas such as technical assistance. The implementing MDB then reports to We-Fi on progress. We-Fi’s secretariat serves as a go-between for the implementing partners and the governing committee in collecting this data. To ensure there is scale and impact with the initiative, We-Fi only considers proposals over $10 million for funding, Basu said. “One thing we are quite clear about is that we are not a fund that is doing microfinance and we are not supporting microentrepreneurs,” she said. The focus is on women-owned and led SMEs with at least five employees. What We-Fi looks for When the We-Fi team examines proposals, it first looks for the three-pronged approach that addresses barriers in the “ecosystem” around women entrepreneurs, Basu said. Secondly, she said, it is looking for proposals that demonstrate the project can leverage funds through blended finance. For every $1 of grant money We-Fi provides, the partner must mobilize at least $5 in additional funding from commercial, government, and other sources, she said. In some cases, this includes the MDB’s own resources. In the first round, the World Bank’s IFC used some of its funds for projects focused on risk-sharing and de-risking. The We-Fi capital was used as a credit guarantee for performance-based incentives for commercial banks. “The commercial bank, when it has this guarantee, is encouraged to lend more to women-owned SMEs that it otherwise might see as risky clients,” Basu said. Thirdly, one of We-Fi’s overarching goals is to allocate at least 50% of funds over its lifetime to the poorest and most vulnerable countries, she said. It looks for proposals that can help hit these targets. The technical evaluators also examine the strength of partnerships on the ground. Innovation is a factor when examining proposals, Basu said. “We don’t want to do things that the MDBs can normally do in their standard business procedures,” she said. Some product innovations that We-Fi finances include guarantees, performance incentives, risk-sharing facilities to de-risk commercial bank lending to women-owned SMEs and gender bonds. For example, in Côte d’Ivoire, the World Bank and IFC are implementing a project focused on increasing access to markets and financial products and services for women-led cooperatives and SMEs operating in horticultural value chains. The project aims to connect buyers with higher-value food crops and partners with financial institutions to design financial products targeted at women-led cooperatives and SMEs in horticulture. The second round of submitted proposals included higher levels of innovations, she said. Finally, We-Fi wants to ensure proposals demonstrate how the funds could impact women — in areas such as job creation. One of the successful proposals in the first round was a project submitted by the Islamic Development Bank for its value-adding enterprises for women program. It received $32 million to expand existing programs in Yemen, Nigeria, and Mali that include training, technical assistance, and business grants. Moving forward While We-Fi currently only accepts proposals from its partner MDBs, there has been internal discussion over whether that could change, Basu said. The advantages of working through the MDBs is that it’s more efficient and there are fewer proposals for We-Fi to review, she said. The costs to broadening the scope include questions around financial accountability. “The MDBs already have the track records,” she said. “That was the main thinking behind starting off with them.” A call for proposals for the third round of funding is expected next year. It’s not yet clear yet if there will be another round of fundraising after the initial $350 million in grant funds is depleted, Basu said. The 14 government partners will ultimately have control over this decision.