Among the 17 Sustainable Development Goals, one particular goal stands out to achieve gender equality and empower all women and girls. Goal #5 aims to empower women globally and in the process of doing so, hopes to tackle the many issues that women have been facing, and this includes financial access for women.
Tackling the challenges that women face will not only help to achieve Goal #5 but also others goals to further improve the communities women live in around the world as well as for the progress of gender equality.
“Achieving gender equality and women’s empowerment is integral to each of the 17 goals, according to UNWomen.org, but we have chosen to highlight two big ones (5 and 11) that we feel are particularly good examples,” says Michael Tsarev, CEO of the WomenImpact Network.
He further adds that there is no enough awareness on this important issue, as data also shows that not enough actions are being taken.
According to the International Finance Corporation (IFC), improving woman’s access to finance could boost global economic output by up to $28 trillion by 2025. The same research also found that small and medium enterprises (SMEs) run by women are better at reinvesting profits in the business, investing in their families’ health and education, and strengthening local communities.
However, the sad reality is that only about 2.3 percent of the world’s startup funding from venture capital is being allocated to enterprises owned by women. The IFC also estimates that 68 percent of women-owned businesses in emerging economies have unmet credit needs.
Fostering Gender Equality In The Ecosystem
With global banks, asset managers and investors now prioritising environmental, social and governance (ESG) frameworks to inform their capital allocation decisions, Michael and his team are of the view that supporting and investing in women must be considered a key part of the ‘S’ in ESG.
On a similar note, Aleksandra Yurchenko, Head of Investor Relations at Kilde says she would like to see more being done in the financial services ecosystem to include female small business owners and entrepreneurs under the Social pillar of ESG, especially when it comes to allocation of capital and access to financing, something the team at Kilde is trying to support through their partnership with WomenImpact Network.
“It is a two-pronged approach: firstly, raising awareness about the shortcomings of the existing situation for women in business and the challenges they face, and secondly, taking tangible steps to improve access and equality through partnerships and programmes that make a real impact in the community,” she tells Disruptr.
She also highlights that it is vital for business leaders in their respective business sectors to appoint women into senior positions, but also to ensure – in the case of banks – that enough loans/capital are reaching female entrepreneurs and business owners.
The IFC estimates that worldwide a $300 billion gap in financing exists for women-owned small businesses, while more than 70 per cent of women-owned SMEs have inadequate or no access to financial services.
Meanwhile, research by the Financial Alliance For Women found a $1.7 trillion unmet demand for credit among female-owned micro SME in developing markets, while Citigroup estimates that closing the gender gap for women-led businesses could boost global GDP by $2 trillion.
“The roadblocks preventing women from achieving their entrepreneurial potential are rooted in social norms and customary practices that prescribe how much capital, time, and autonomy a woman will be able to devote to entrepreneurial activities,” says Michael.
He also shares that unconscious bias, rather than active discrimination, may explain why women dominate low-skilled clerical employment and are poorly represented on company boards of directors.
Additionally, the extensive documentation required to apply for a loan also disadvantage women, who are less likely to possess the required application documents or to understand them.
“Our position is clear: we believe that a more equal role for women in society, including in business and access to finance, will result in increased economic stability, employment, and overall health,” says Michael.
Supporting Progress In The Business Ecosystem
Through their new partnership, Singapore-headquartered fintech Kilde and WomenImpact Network are hoping to make a real difference to female entrepreneurs in Southeast Asia in 2022 and beyond.
Both organisations are looking to work closely with micro-financing companies and non-banking financial institutions across the region to channel more funds to the female entrepreneurs who need it most – facilitating access to investments, education, and consulting.
“If we succeed, the outcome will be a more inclusive entrepreneurship environment and global supplier diversity with measurable impact. We are optimistic that this initiative will help bolster confidence and support women-friendly supply chains, and we are actively looking for like-minded partners to join us on this ESG impact and investment journey.