The International Finance Corporation (IFC) has teamed up with investment bank Goldman Sachs to launch a $600 million (€432.8 million; £360.7 million) facility for female entrepreneurs.
The Women Entrepreneurs Opportunity Facility is aimed at increasing finance to as many as 100,000 women in emerging markets. The first facility of its kind to be dedicated exclusively to financing women-owned SMEs in developing countries, it will extend lines of credit and share risk with local banks.
IFC will invest an initial $100 million and the Goldman Sachs Foundation will provide $32 million. The IFC, also part of the World Bank Group, will manage the facility and expect to raise an additional $468 million from public and private investors.
The arrangement is part of a wider push to promote gender equality and ensure the social and economic welfare of one-half of the population, a recent statement read.
IFC research estimates that a $300 billion credit gap exists for women-owned enterprises. Findings from an IFC study released Tuesday suggest that in India alone financial institutions meet only 27 percent of the financing demand of women-owned SMEs, estimating a gap of $116 billion.
“This new initiative will create opportunities for tens of thousands of female entrepreneurs to thrive and prosper,” World Bank Group president Jim Yong Kim said.
Lloyd Blankfein, chairman and chief executive of the Goldman Sachs Group, said: “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. By partnering with IFC, we will address one of the biggest obstacles to growth for women-owned small and medium businesses: access to capital.”
The IFC and the 10,000 Women programme will also provide training and advice to women entrepreneurs and provide $18 million in grants, $11 million of which will go to provide advisory services.
Through its Banking on Women programme, launched in 2010, the IFC has made 17 investments amounting to $800 million in 17 countries.