World Bank Launches Women Entrepreneurs Finance Initiative

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HAMBURG — The World Bank has launched its first facility to promote women-led enterprises, the Women Entrepreneurs Finance Initiative (We-Fi). The program, headed by World Bank President Jim Yong Kim, aims to break down barriers for women-run businesses in developing countries. The initiative plans to mobilize more than $1 billion to support women entrepreneurs in World Bank-supported countries.

Worldwide, only 30 percent of formal businesses are owned by women. Additionally, women-run businesses overwhelmingly belong to the retail and service sectors. These industries traditionally have lower profit margins and less opportunity for growth and advancement.

Approximately 70 percent of women-owned small- and medium-sized enterprises (SMEs) in developing countries do not receive financial services required for business growth. Unfavorable regulatory environments in many developing countries prevent women from gaining unimpeded access to markets and capital.

However, women entrepreneurs are crucial drivers of economic development for the poorest 40 percent of the world’s population. Women-run SMEs spur growth and create jobs in their home countries. Linking these women business owners with necessary capital and support can boost economic conditions in the targeted countries.

We-Fi will provide loans and mentoring to women entrepreneurs with a focus on clients in Africa, Latin America and the Middle East. Loans will vary in size from hundreds to hundreds of thousands of dollars depending on the individual needs of applicants. The initiative will also support gender equality advocacy and target policies that inhibit women’s access to business capital in client countries. This is the first World Bank-led project that aims to change public policy in countries with legal gender discrimination.

By its launch at the Women-20 summit, the project had already surpassed its target of $200 million in grant donations. We-Fi has raised about $325 million in donor support from Australia, Canada, China, Denmark, Germany, Japan, Netherlands, Norway, Saudi Arabia, South Korea, the United Arab Emirates, United Kingdom and United States. The U.S., a founding member of the facility, has pledged to contribute $50 million. The project intends to leverage the grant donations into $800 million in additional funding from financial institutions.

Ivanka Trump, advisor to the Trump administration, played an integral role in the conception and development of the initiative. The Women Entrepreneurs Finance Initiative formed as a collaborative effort between Trump and the World Bank’s Kim to promote women’s empowerment. Trump will continue advocating for the project but will not serve any official advisory capacity.

U.S. leadership in the facility accompanies a series of cuts by the Trump administration to other foreign aid programs. The White House proposed budget includes cuts to the State Department and the U.S. Agency for International Development. Additionally, the U.S. has withdrawn support from organizations that combat HIV or promote maternal health if these groups also perform or provide information on abortions.

Despite recent cuts to foreign aid, the U.S. has demonstrated strong support for the Women Entrepreneurs Finance Initiative. “This incredible facility will have a significant impact on women’s economic development around the world,” President Donald Trump said. “It will help increase opportunities and economic growth while addressing unique barriers women entrepreneurs face. I am proud the United States is helping to lead support of this unprecedented initiative.”

Katherine Parks
Photo: Flickr

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