Using Portfolio Data to Uplift Women Entrepreneurs

Thursday 26th January 2023

By Kiki Del Valle, Mastercard’s Executive Vice President for Market development – Latin America & Caribbean, and Tessa Ruben, Knowledge and Advocacy Manager, Financial Alliance for Women
Despite upbeat talk of “leveling playing fields” and giving women a better “seat at the table,” the cold reality is that odds are still stacked far too high against women around the world.
As the pandemic fades, it is clear COVID-19 has set women’s economic progress back by decades. Women lost $800 billion in income in 2020 alone; more than the combined GDP of 98 countries. And many women are finding it hard to return to the workforce. 
Despite these setbacks, the pandemic hasn’t squashed women’s entrepreneurial spirits. In fact, women’s entrepreneurial activities surpass that of men in 10 economies around the world. Today, one-in-three small businesses are owned by women. As women aim to gain financial independence, we must help increase their chances to succeed as entrepreneurs.
To reduce the gap between men and women when it comes to earnings and ownership, we need to improve access to credit, financing and market opportunities women need to get businesses off the ground. 
Bottom Line Benefits
For financial service providers (FSPs), supporting women entrepreneurs can help grow their bottom lines. The untapped potential is immense; addressing the pandemic’s impact on women could add $13 trillion to global GDP by 2030. 
But while targeting this segment presents new business opportunities for FSPs, changes must be made to accommodate cultural and behavioral differences. Not surprisingly, women entrepreneurs think and behave differently than men, so FSPs need tailored strategies to target and support them. That requires a thorough understanding of the portfolio through a gender lens.
External market data can also help identify gaps for FSPs to fill. For example, the “InBrief: Gender Data that Matters” a collaboration between Mastercard Data & Services and the Financial Alliance for Women shows that only one-in-four women entrepreneurs in five Latin America and Caribbean (LAC) countries has a business credit card. And 75% of the women surveyed rely on a personal credit card to help run their business.
Interestingly, the report also underscores that more women use their personal savings to start their businesses and are less likely than men to use credit to grow. For nimble FSPs, this opens up a wealth of opportunities for offering tailored commercial products to better serve this segment.  
Better Data Can Drive Better Uptake with WSME Customers  
Let’s take the example of Ecuador’s biggest bank, Banco Pichincha, which has actively invested in women entrepreneurs for years. Deep analysis of its portfolio and market data performed by Mastercard Data & Services and the Financial Alliance for Women showed that, while the bank serves more women entrepreneurs than its competitors, these customers are less likely than their male counterparts to use business credit cards or cash management and trade finance solutions. 
The analysis showed reaching more women business owners with cards and loans, and increasing cross-selling of additional products, could bring the bank additional annual profit of $10 million per year. 
Non-Financial Services Are Also Key 
For women, accessing finance is only part of the challenge. Small businesses owners also need mentorship and training support to succeed. From basic business operations to marketing and electronic payments acceptance, women entrepreneurs need to be equipped with the right tools and learn the right skills to build and scale their businesses. That’s why all Financial Alliance for Women members offer a holistic value proposition to women that includes financial and business education, networking, and recognition. 
They often do this through partnerships. For example, Mastercard partnered with Costa Rica’s INCAE Business School to accelerate the growth of women-owned businesses across Central America through the LEADS Mujer program. In addition, through its Todas Conectadas project with UN Women, Mastercard is also helping millions of women in the region to digitize their businesses and improve their job prospects.
Next Steps for FSPs 
To better serve among women-owned businesses, FSPs must analyze portfolio data by gender. The Alliance offers support to help them do so. Its business case tool enables organizations to conduct market sizing, quantify market share, and estimate financial returns from targeting women—including for WMSMEs. And its Gender Data Learning Series, taking place again later this year, teaches teams how to analyze gender data in ways that drive decision-making. We encourage you to tap into these resources to learn how your organization can use data to support women entrepreneurs.
The latest UN Women Gender Snapshot shows that it will take an incredible 132 years for women to gain equal footing. With strong data analytics and market research, FSPs can work to improve that number and strive toward equity in this generation. 
Mastercard and the Financial Alliance for Women look forward to enabling more FSPs to become engines of growth for WSMEs, creating new futures for women and their communities.