global challenges and opportunities for women entrepreneurs finance
DESCRIPTION
Presentation by Matt Gamser, Moscow 17 May 2013.TRANSCRIPT
Global Challenges and OpportunitiesWomen Entrepreneurs Finance
Matthew Gamser, HeadSME Finance Forum/ Women’s Finance Hub
Moscow – May 2013
An integral part of SME Finance Forum
Virtual Platform to share knowledge and promote best practices in women's access to finance
promote collaboration successful business models disseminate research, data information address goals of the G20 SME Finance Sub-Group
Accelerate Financial Inclusion for Women Owned SMEs
What is the Women’s Finance Hub?
There are 29-35M formal and 101-124M informal MSMEs with at least one female owners in developing world, representing 32-39% of total MSMEs
SOURCE: McKinsey-IFC MSME database; Enterprise Survey; ILO, Human Development Report; team analysis
Number of formal and informal MSMEs with 1+ female ownersMillions
Proportion of MSMEs with 1+ female owners Percent
130-15929-35
Middle East &North Africa 1-2
Total(ex-high income)
1
South Asia 5-64
Central Asia &Eastern Europe 7-84-5 3
Sub-Saharan Africa 10-133-4 7-9
Latin America 24-296-7 18-22
East Asia 84-10214-17 69-85
32-39
13-16
11-14
37-45
25-30
38-46
40-48
32-39
3-4
5-6
31-38
26-32
48-59
45-56
Formal Informal
• Largest proportion of women MSMEs come from East Asia• Women representation lowest in South Asia and Middle East & North Africa
3
101-124
1
1
Global Representation – Women Owned MSMEs
Data from 34 IFC client banks in 25 countries covering 6 regions shows that about 16% of our client bank SME portfoliosare loans to women-owned SMEs (with 51%+ women ownership)
Regional percentages allow for establishment of minimum regional thresholds Regional numbers also enable regions to fine tune SME and BOW strategies and establish IDG3 gender targets
Region % of women-owned SMEs in IFC
client bank portfolios
East Asia and Pacific 26.6%
Latin America and the Caribbean 22.2%
Europe & Central Asia 18.1%
Sub-Saharan Africa 15.1%
South Asia 9.5%
Middle East & North Africa 5.7%
Global 16.4%
Sizing the market: IFC Portfolio
Clients
Sizing the market: IFC Portfolio
Clients
IFC’s Gender Baseline Survey of Portfolio Clients
Low Access to Finance for Women
Credit Access and Gap
UnservedUnder served
Well servedDo not need credit
Latin America
Sub-Saharan Africa
53-65 8-10
5-6
23-29 27-33 23-28 12-15 28-34 21-25 31-38 17-21 21-26
Central Asia and Eastern Europe
East Asia
South Asia
MENA
14-17 43-53
15-18
18-22 11-13 55-68 14-17
10-12
4 62-76 14-17
11-13
55-67 18-22
6-7
12-14 49-59 17-21
7-8
18-22 24-30 33-40
15-18
18-22
17-21 35-43 13-16 24-30 24-30 31-37 13-15 23-28 11-13 43-53 19-23 17-20
25-31 11-14
11-14
42-52 21-26 14-17
12-14
43-53 27-34 19-23
10-12
34-41
18-22 36-44 10-12 26-31 29-35 27-33 7-9 27-33 19-24 46-56
9-11
16-20
Very small Small Medium
Credit needs and access for formal SMEs with at least one female owner by region1, Percent
• Sub-Saharan Africa and East Asia report the highest rates of unserved women enterprises• Underserved rates are highest among medium enterprises, since most already have access to finance
1 Definitions (see appendix): Unserved: Do not have a loan AND applied OR needed loan; Underserved: Have a loan but access to finance is a constraint (but not necessarily a “major” or “severe” constraint, which is a separate question); Well-served: Have a loan AND access to finance is not a constraint; No need: Do not have a loan AND did not apply AND did not need
SOURCE: IFC SME database, Enterprise Survey, team analysis
In ECA 50-65% un-or under-servedEstimated credit gap $40 – $80 billion
High-growthsegment
In Georgia women enterprises represent over
40% of registered businessesIn Moldova, women
entrepreneurs represent 53% of registered businesses
In developing countries Women-owned businesses represent 38% of the total number of registered small
and medium enterprises (MSME)
In Turkey women businesses represent over 40% of
registered firms, but less than 15% have access to
commercial Bank finance
Excellent repayment rates
Economic performance with most gender-
diverse management teams greatly
outperforms industry averages
Chart
Investing in Women Entrepreneurs is Good Business
Untapped market
In Russia women businesses represent over 33% of
registered firms, but less than 10% have access to commercial bank finance
Deposits
Personal Loans
Financial Planning
SME Banking
Financial Products for the Women-owned business segment – Opportunity for cross selling
7
Women-targeted marketing
Train Bank staff and managers
Tailor existing products
Business strategy
Enter untapped markets
Increase market share
Greater brand visibility
Enhanced profitability
• Provides source of market differentiation in competitive SME markets• Establishes reputation as an innovator • Entry and differentiation in specific sectors where concentration e.g. retail , mobile, youth, health• Creates strong community-based advocacy and enhances corporate social responsibility
Opportunities for Banks Targeting the Women’s Market
• Female customers have a higher propensity to save both as business and personal customers• Deposits from female customers typically grow at higher rate and stay with the Bank longer• Net funding surplus as a segment
Information Services
• Once main banker status achieved, higher cross-sell ratio’s (between 1 and 2 times)• Higher footings obtained per relationship and higher fee generation • Respond well to relationship management-based models and willing to pay for it• Demonstrate stronger retention rates in many clients
• Take the business relationship, high likelihood that will take majority of family wallet • High advocacy creates strong conversion rates for husband business and personal FS• Up to 85% of family financial decisions made by the women globally
Market Share Growth
• Female customers have lower risk tolerance as both business and personal customers• Women-led businesses outperform those led by men, including start-ups• Stronger business plans can create higher acceptance rates and reduced processing costs• Default rates are either the same or better than male counterparts depending upon market
Information ServicesHigher Cross-Sell
and Loyalty
Strong Savings Propensity
Positive Risk Behavior
Information Services
Linkage to Family Wallet
Factor* Description
* - Source: IFC Analysis
Gender Portfolio: $164M invested 20 clients with gender projects Strong pipeline: about $741M Gender champion structure
in place in HQ and Regions Gender SME Baseline established
A global footprint with investment & advisory projects supporting women entrepreneurs
$63 $80
$741
FY06 - 10 FY11-12 Pipeline
FM Gender Financing by Year($million)
IFC Results to DateIFC Results to Date
The Way Forward
and
Potential of both relationship and transactional-based strategies