Thursday 29th June 2023
The fact that 400 million women entrepreneurs globally still lack access to finance from formal financial services providers (FSPs) is a major focus of this year’s Annual Summit. Closing this gap represents a $1.7 trillion growth opportunity for FSPs, and doing so will take nothing less than concerted efforts to rally stakeholders and create meaningful action at the national level.
This is the impetus for the WE Finance Code, a high-impact new initiative that the Alliance has been working with We-Fi to design and is now beginning to implement in countries around the world. The Code promotes collaboration between FSPs, regulators and other ecosystem players at the national level to accelerate financing and non-financial support for women entrepreneurs. FSPs that sign on to the Code in their countries will make a voluntary pledge to work towards closing the WMSME financing gap by:
Trusted bodies such as regulators or trade associations will aggregate data reported through the Code and use it to create annual national reports that identify financing bottlenecks for WMSMEs and help FSPs and ecosystem partners address them.
The Code is not only about data; it’s also about articulating shared values, signaling priorities internally and externally, identifying opportunities for collaboration, and catalyzing resources toward advancing women’s entrepreneurship at the national scale (and, multiplied across countries, at the global scale). Ultimately, this adds revenue for FSPs and value to economies.
The UK’s Investing in Women Code is the blueprint for this model, and it has already begun to help close the entrepreneurship gap: In 2022, 35 percent of all venture capital deals made by Investing in Women Code signatories were in female-founded companies, compared to the market average of 27 percent.
As NatWest has done in the UK, private sector financial institutions can act as “anchors” for the Code in their countries. They do this by signing the Code, reporting data, leading national conversations, sharing best practices and working with regulators to build an enabling environment. They stand to benefit not only by enhancing their bottom lines but also by solidifying their reputation as champions of the female economy at the national and global levels.
Alliance members are obvious choices for private sector “anchors” in their countries. They already serve the women’s market, have strong champions at the top, are set up to report sex-disaggregated data and know how to share best practices. Indeed, we are already seeing them step up to the plate. The first financial institution to lead the Code in a country outside the UK is this year’s Summit host Banco BHD, which has long been known as the “benchmark bank for Dominican women” and has a strong champion in CEO Steven Puig. We expect their galvanizing action will become a benchmark for other countries, as well.