Alliance members have shown time and again that investing in collecting data on women-led micro and small-to-medium-sized enterprises (WMSMEs) can drive growth in this market, underscoring the need for more robust sex-disaggregated data management across the board.
It is through the data collected across the Alliance network that we know financing for WMSMEs has grown rapidly over the past three years, with WSMEs’ share of loan volume growing at a compound annual growth rate of 16 percent, compared to 4 percent among women retail customers.
It cannot be overstated how important sex-disaggregated data collection has been to accelerate this growth, by enabling financial service providers (FSPs) to refine their segment strategies, demonstrate their business cases and prove return on investment.
While a growing number of FSPs globally have taken their first steps to collect data, many are yet to take the next steps to leveraging it to inform business decisions. This has been highlighted in early results from the Supply-Side Sex-Disaggregated Data Survey, commissioned by IDB Invest and covering more than 250 FSPs across 13 countries in Latin America and the Caribbean. The survey has found while 75 percent of commercial banks in the region collect sex-disaggregated data, more than half (52 per cent) still use manual reporting processes raising concerns about data quality. And most have not established key performance indicators, meaning the data is not being used to drive the business.
Bridging that gap is critically important, particularly with the rollout underway of the Women Entrepreneurs (WE) Finance Code across 20+ countries to expand the amount of financing available to WMSMEs. Monitoring and reporting data annually is a core part of the pledge. To support the successful implementation of the Code in country, the Alliance is curating an international peer learning community of WE Finance Code Champions in each country.
In addition, to support FSPs – and national data aggregators – on this front, the Alliance is delivering the 2024 Gender Data Learning Series, to be launched in September. Running over five weeks, the series will have a strong emphasis on equipping MSME segment leads and business intelligence leads of FSPs and national data aggregators to collect, analyze, and—importantly—to utilize high-quality WMSME data. Participants will have access to an expanded curriculum on WMSME data, from setting definitions, establishing a baseline and setting KPIs, to developing gender data dashboards and using the data to inform business decisions and policy design.
At a policy level, innovations are emerging that will ease the path forward. For example, during the latest meeting of the Gender Data Task Force, we learned some countries including Morocco and Honduras are creating a formal registration process for all workers, including those in the informal economy, such as corner store business owners and rural farmers. This initiative can help FSPs to collect data on unregistered businesses, a long-time barrier to measuring and addressing the finance gap to WMSMEs, many of whom operate in the informal economy.
There is no doubt that investing in robust data on WMSMEs pays off in winning over a highly loyal, engaged, and growing market. The commitment to data-driven strategies from the Alliance network and its partners is paving the way for many more FSPs to see the business case. To learn more, check out some of the relevant resources on the new-and-improved Alliance website:
- Female Economy Analytics survey results and report
- The Alliance Business Case Tool
- More case studies, in-briefs, and research in our Resource Hub
1https://consumercentrix.com/2024/06/28/assessing-key-financial-inclusion-barriers-in-the-lac-region/