July 20, 2017
From the op-ed:
Last week at the G20 Summit, the World Bank announced the creation of a new $1 billion fund to help support women’s entrepreneurship in developing nations, thanks in part to the work of Ivanka Trump. According to the World Bank, currently 70% of small and medium-sized businesses in developing countries owned by women simply can’t get the financial services to meet their needs, or they are altogether shut out by financial institutions. This fund is a very important step in addressing some of the challenges women in developing nations are up against when starting and growing a business. If it is done right, the fund has the potential to improve the economic outlook for all citizens in these countries.
The fund should be commended for its broad approach to addressing the barriers that women entrepreneurs face. It will include a range of services for women entrepreneurs, including access to loans, insurance, and training. And it will engage government leaders to change policies that make it harder for women to start businesses. These are important ingredients for success.
But in this time of growing inequality and polarization, it is critical for the fund to reach poor women in order to have the needed impact. Women who own small and medium-sized businesses (10-500 employees) are not typically among the poorest segments of the population, and so it is important that the fund makes a concerted effort to reach microentrepreneurs who are the vast majority of women business owners in developing nations. Some microenterprises have significant potential to grow and create jobs, especially if this initiative can help them connect to the supply chains of larger businesses. It is promising that this fund commits to supporting businesses at early stages of growth, which means that it can reach women who own or want to start smaller businesses. But time will tell how much it focuses on poorer women, who often require a grant of seed money, rather than loans. With the right design, the fund could benefit businesses along the spectrum by helping women make the transition from micro to small businesses, and by increasing access to financial and other resources for all women.