WASHINGTON: The World Bank’s private finance arm and Goldman Sachs teamed up to launch a $600m fund to increase access to
capital for female entrepreneurs in emerging-market countries.
The partners will invest a total of $132m to seed the new Women Entrepreneurs Opportunity Facility, billed as the first global finance fund exclusively aimed at women-owned small and medium enterprises (SMEs). The International Finance Corporation, an arm of
the World Bank which focuses
on the private sector, will provide an initial $100m and the Goldman Sachs Foundation will invest $32m.
The fund will allow about 100,000 women to gain access to capital, helping them to overcome a major hurdle to growing their businesses, they said.
According to IFC estimates, about 70 percent of women-owned SMEs in developing countries are either not served or underserved by financial institutions. The resulting credit gap was valued at about $300bn.
The fund, which will be managed by the IFC, was expected to attract $468m from public and private investors.
It will extend lines of credit and share risks with local banks to promote credit access for female entrepreneurs.
The World Bank said the project was part of its overall strategy to promote gender equality and social and economic opportunities for women.
“This new initiative will create opportunities for tens of thousands of female entrepreneurs to thrive and prosper,” World Bank President Jim Yong Kim said in a statement.
“We cannot afford to exclude half of the world’s population from their rightful role in helping to change the face of the global economy,” the World Bank president said.
Goldman Sachs, the powerful Wall Street investment bank, said the partnership deepens the commitment of its 10,000 women educational programmes that promotes female entrepreneurship.
“Through the experiences of the 10,000 Women graduates, we have seen first-hand that investing in women is a key source
that leads to economic growth,
but there is clearly more
that can be done,” Lloyd Blankfein, Goldman Sachs chairman and chief executive, said in the statement.
The Goldman Sachs Foundation also will provide $18m in grants — $11m of which will go to the IFC — to provide advisory services for banks and female borrowers.
AFP
