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Co-funded by the European Union

Investing in Women Entrepreneurs in ACP Countries: an Opportunity Awaits

Investing in women-led businesses not only helps these enterprises to thrive, but it’s also good for society in terms of gender equality and ECONOMIC GROWTH. For lenders, investing more in women entrepreneurs can mean tapping into an important segment of the market at the same time as gaining LOWER RATES OF NON-PERFORMING LOANS while meeting targets on gender and financial inclusion.

Development finance institutions (DFIs), with their focus on sustainable economic development, are particularly well placed to lead on investing in women. And they are increasingly looking to tap into this underserved market: the PARIS DEVELOPMENT BANKS STATEMENT, which calls for more action on gender equality and women’s empowerment through finance, is increasingly attracting signatories from developing and emerging country DFIs. Multilateral banks and other DFIs are influencing national and sub-regional DFIs to adopt gender policies. What’s more, gender expert and report co-author Cathleen Tobin reports that she has seen traction at a regional level: a recent joint workshop by the Association of African Development and Finance Institutions and Affirmative Finance Action for Women in Africa is one example of this.

But what is often referred to as ‘gender finance’ – that is, deliberately considering gender in investment analysis and decisions, and removing the barriers that women face in accessing or using financial services – doesn’t happen automatically. It requires re-examining policies, processes, products and more. That takes effort and commitment.


In African, Caribbean and Pacific countries, action is limited or not very visible yet. Research published by the INVESTMENT CLIMATE REFORM FACILITY in April 2022 – ‘TRENDS IN GENDER FINANCE IN ACP DEVELOPMENT FINANCE INSTITUTIONS: OVERVIEW AND SELECTED EXAMPLES’ – found that fewer than 20% of the DFIs identified in the region showed evidence of planning or implementing gender policies or programmes. In many cases, gender-related work appeared to be “chronically under-resourced”.


The question that keeps coming up, says gender expert and report co-author Cathleen Tobin, is: where do we start? The report, which aims to showcase good practices and challenges in implementing gender finance and women’s economic empowerment, shares a whole range of approaches – suggesting that there are many answers to this question.

Multiple paths 

For example, the Development Bank of Nigeria set a target in 2018 to disburse a minimum of 40% of its lending to women in 2018, and increased this to 80% in 2020. To achieve this, the bank has an incentive scheme that allows financial intermediaries such as commercial or microfinance banks to reclaim some of the interest when they serve women clients; intermediary staff can also join an ‘ambassador programme’, under which they get perks, such as funding for personal development, if they meet certain targets.


The Caribbean Development Bank, meanwhile, takes a multi-pronged approach through its gender action plan – from creating gender-responsive training and policy guidelines for infrastructure projects, to monitoring its impact through sex-disaggregated data. Senior leaders provide visible support (a success factor highlighted by several other DFIs): for example, the bank’s vice-president is the gender champion. And project analysis through a gender lens is the responsibility of all staff, not only of the six-person gender team.


Many other initiatives are under way. Some are internal: the Development Bank of Southern Africa includes gender-related indicators in its corporate reporting. Others are client-facing: for the Federated States of Micronesia Development Bank, one important change has been to hire more female loan officers. “Women, especially in the informal sector, feel more comfortable discussing their proposals with other women,” says Anna Mendiola, president and CEO. And the Citizen Entrepreneurial Development Agency (CEDA) in Botswana, which lends directly to consumers, has introduced greater flexibility for the many women borrowers who lack collateral. So, rather than a blanket rule which would exclude many potential clients, each loan application is appraised case-by-case; lender and client might agree a way to secure the loan without land or other assets as collateral.

From intention to action

The latter is one example of how gender-responsive does not mean gender-exclusive. As Otlaarongwa Chilume, executive coordinator to the CEO at CEDA, says, it’s less about “ringfencing” women to specific products, and more about making the whole environment more conducive to their needs. Lenders do not need to develop entirely new products: they can adjust existing ones with the needs of women in mind, while making them available to men too. They can also add a gender quota or target to existing programmes – the Federated States of Micronesia Development Bank targets 50% women participants in its credit and business development support for informal businesses.


DFIs examined in the report approach gender finance in different ways, and for different reasons. The key point, say the researchers, is that there is no ‘one-size-fits-all’ solution: “The important thing is to start and to have an intentional approach.”


The challenges of getting from intention to action are real, however. Capturing reliable, sex-disaggregated data is essential to understand who is being served or not – but is “so much more difficult than we often realise”, Tobin says. And while moves have been made towards developing a clear definition of a ‘woman-led business’, putting it into practice universally has not yet been achieved.


More broadly, some remain unconvinced of the business case of serving women – seeing this market as higher risk (a perspective that has been DISPROVEN) and bringing lower financial return (because women tend to borrow smaller amounts than men). That can make it tough for gender advocates within DFIs to get the resources they need.


So while the Investment Climate Reform Facility report has already sparked discussion on this topic, that’s just the start of the wider journey that needs to take place. Online training sessions have presented real-life case studies and aim to inspire, encourage and guide DFI staff to take the next steps. A corresponding online training module will be launched by the ICR Facility in early 2023, building on the Facility’s existing expertise with DFIs – for example, its WORK WITH THE TANZANIA AGRICULTURAL DEVELOPMENT BANK to develop a new gender strategy and revised market approach to women and young people.

A hot topic

Gender and women’s empowerment are hot topics, and they’re only going to get hotter. International bodies such as the European Union have COMMITTED TO AMBITIOUS TARGETS. Institutions including the Asian Development Bank and the Green Climate Fund have begun to outline gender-related requirements as a condition for support. And dozens of organisations worldwide, including many DFIs, have joined the 2X COLLABORATIVE, raising billions of dollars to invest in women.



Meanwhile the need – and the opportunity – remains clear to see.


“Persistent gender disparities continue to place women at a substantial disadvantage, even as entrepreneurs make significant contributions to the economy,” says Thembi Khoza of the Development Bank of Southern Africa. Gender finance means taking on “deeply embedded social and cultural norms”, adds Jessica Harris, gender specialist at the Caribbean Development Bank. “We need to do this continuously, building awareness. It’s not just one workshop that necessarily will lead to systemic change.”

Next steps

“We’ve noticed in our country the biggest impediment for women in accessing finance is meeting collateral requirements from financial institutions. […So] our basic rule is: if we had the last dollar in the bank, and… if a man and woman come at the same time, same business concept, and if the man has security and the woman doesn’t, we’d rather fund the woman. We don’t want to disqualify her because she doesn’t have security.”
– Otlaarongwa Chilume, 

CEDA (Botswana)

“One of the key things is that the institution as a whole is passionate about lending to women: it’s one of our core mandates, it’s one of the core goals, it’s part of our strategic priorities as an institution. Everybody pretty much is on board, from the operations team to the legal team – everyone basically understands that this is where DBN wants to be.”
Theresa Lawal
Development Bank of Nigeria
“We’re starting to collaborate with gender-focused organisations, even women’s groups, to see how we can better serve women, instead of just saying, ‘we’re here for you’. We’ve got a lot to learn.”
Anna Mendiola
Federated States of Micronesia Development Bank

The ICR Facility supported the production of this article. It is co-funded by the European Union (EU), the Organisation of African, Caribbean and Pacific States (OACPS) under the 11th European Development Fund (EDF), the German Federal Ministry for Economic Cooperation and Development (BMZ) and the British Council. The ICR Facility is implemented by GIZ, the British Council, Expertise France, and SNV. The contents of the article are the sole responsibility of the authors and do not necessarily reflect the views of the EU, OACPS, BMZ or of the implementing partners. 

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