The World Bank has launched a public-private loan programme to support women entrepreneurs in developing countries.
Initial funding of $325 million for the project includes large donations from Germany, the United States, Saudi Arabia and the United Arab Emirates.
The United States and Germany invited the Bank Group to establish the facility. We-Fi is a collaboration among the governments of Australia, Canada, China, Denmark, Germany, Japan, Netherlands, Norway, Saudi Arabia, South Korea, United Arab Emirates, United Kingdom, and the United States.
Women entrepreneurs play a critical role in economic development by boosting growth and creating jobs, particularly for the poorest 40 percent of the population. Yet, women face numerous challenges to financing, owning, and growing a business, including limited access to capital and technology, a lack of networks and knowledge resources, and legal and policy obstacles to business ownership and development.
The Women Entrepreneurs Finance Initiative (We-Fi) seeks to address barriers to financial access and to provide complementary services that address constraints at multiple levels from legal reforms to skills enhancements and market access for women-owned and women-led small and medium enterprises (SMEs), which are key sources of potential job growth in developing countries.
This is the first major global fund or facility dedicated to a holistic public and private approach to eliminating barriers to women’s economic empowerment. We-Fi will enable more than US$1 billion of financing to improve access to capital, provide technical assistance, and invest in other projects and programs that support women and women-led SMEs in World Bank Group client countries.
We-Fi originally targeted $200 million in grants from donors, with an additional $800 million in IFI and commercial financing by working with financial intermediaries, funds, and other market actors.
What would it finance?
Given the need for both public and private sector interventions to address the constraints women entrepreneurs face, We-Fi will support complementary approaches through both the public and private sector. We-Fi will also enable innovation around new financial and non-financial services for women entrepreneurs in emerging markets.
We-Fi would not only provide dedicated resources to foster innovation and new approaches to removing these constraints for women entrepreneurs, but also help to elevate the issue to spur action by governments and private sector.
How will it be governed?
We-Fi will be established and managed as a Financial Intermediary Fund (FIF) at the World Bank, drawing on the World Bank’s strong track record in designing and managing Funds to ensure best practice in terms of governance and efficiency.
A Governing Committee would set the Facility’s operational policies, eligibility and resource allocation criteria, approve allocations to Implementing Partners, provide regular monitoring, and review evaluations. Those who contribute above a threshold to be determined by the founding contributors, would occupy voting seats on the Committee.