As we celebrated Women’s International Day, women’s empowerment is gaining greater recognition as a means to increase access to economic opportunities globally. Support for women’s empowerment has grown in all sectors of society driven by both public and private sector initiatives.
The World Bank, for example, has called for ending poverty and boosting shared prosperity by 2030 by empowering women and girls. Microfinance has demonstrated that over the past 20 years poor women benefit from financial services (credit, savings, and insurance). Women’s ability to generate and control their own income can empower poor women in many ways resulting in significant impact on their families (e.g. education, health care). However, microfinance only partly fills the credit gap for women entrepreneurs. More concerted initiatives are now looking to move beyond microfinance as many women-owned businesses need more varied services and products.
Of the 2.5 billion people living on $2.50 a day, nearly 1 billion women in the next 10 years will be entering the global economy as entrepreneurs and employees. Studies have shown that women’s participation in the economy is a means to increase a country’s GDP. Based on a recent G20 report, the United Nations estimated that gender equality and women’s economic empowerment could prevent a reduction of per capita income rates by .1-.3 % points. In other words, if women participated in the labor force at a rate similar to men’s participation, then about 203 million more women would be employed and this would contribute $1 trillion to GDP in the Emerging Markets.
Furthermore, according to the International Finance Corporation (IFC) 70% of women-owned SMEs in developing countries are either unserved or underserved by financial institutions, resulting in a credit gap valued at about $300 billion in the emerging markets that poses an obstacle to economic growth.
Some key Facts and Figures:
- Women control more than $20 trillion in consumer spending globally
- By 2018, in the U.S over 50% of the new jobs in the SME sector will be created by women entrepreneurs
- In the emerging markets, women’s income is growing at 8.1% compared with 5.8% for men
- Closing the gender gap in employment alone will increase:
- American GDP by 9%
- Eurozone GDP by 13%
- Japan GDP by 16%
- Closing the credit gap for women business owners will increase per capita income by 12%
Stepping up a global effort towards women’s empowerment, the IFC and Goldman Sachs announced a $600 million financing program for women entrepreneurs to help accelerate women’s entrepreneurship and growth potential in emerging markets. The goal is to enable 100,000 women gain access to capital and help them overcome a major hurdle. CL/NdeSW