Reflections from the World Bank
The World Bank recently hosted a meeting in Côte d’Ivoire to help address the perception that loaning to women is risky for financial institutions and that removing collateral requirements is key to helping women entrepreneurs in the developing world.
A Staggering Statistic
According to the World Bank, some 70% of women-owned small and medium enterprises in developing countries can’t access the capital they need.
One attendee noted, “In some countries there are legal barriers for women to own property. In some countries there are barriers in the formation of companies entering into contracts. All of this in combination makes for greater difficulty accessing capital and being able to act on a great idea.”
Much of the discussion at the summit revolved around the need to change perceptions that women are a financial risk, which prevents many women from starting or expanding their businesses.
Overcoming Barriers
We are grateful that in Five Talents savings groups, these barriers are addressed and overcome. Women and men from the same community grow to know and trust one another better. Those who take out loans have developed the “social collateral” necessary to convince their neighbors they will be able to apply their new business skills well and pay back their loans with interest, benefitting the whole community. We are proud that eighty percent of Five Talents members are women, and they repay over 90% of loans from their groups.
Until next Monday morning,
Dale Stanton-Hoyle,
Executive Director