• As we rebuild the post-COVID global economy, we must invest in women and women-led small and micro businesses (SMBs).
  • Equitable access to capital and digital payments can ensure a more inclusive recovery.
  • Collaborative public-private partnerships are bridging gender gaps in underserved communities.

As world leaders determine a path forward for the global economy, we must ensure women and women-led small businesses are not left behind. Investing in women-led small and micro businesses (SMBs) pays dividends in communities around the globe because women use their resources to reinvest in the health, education and well-being of their families and neighbors.

To fully support women SMBs and build a more resilient and inclusive global economy, we need to consider the role of three things: capital, digital payments and innovative public-private partnerships.

1. Access to capital

Addressing the inequitable distribution of capital for women and women-owned SMBs – especially minority-led businesses – is one of the single most important and effective opportunities for both the private and public sectors to propel inclusive economic recovery from the COVID-19 pandemic.

Recent reports show women are disproportionately affected by the pandemic globally, especially those working in the informal economy. Before the pandemic, there was already a $300 billion annual credit deficit in funding for women-owned SMBs. Closing the gender gap in credit access could improve developing economy growth rates by 1.1%.

Female informal workers in sectors most affected by the crisis
Women in the informal economy are most affected by the COVID-19 crisis.
Image: ILO

2. Access to digital payments

It is also essential to consider women’s access to financial services. For most people in emerging countries, their access to the global economy begins with a mobile phone, which provides access to digital payments that can be used for all transactions, such as receiving wages and government subsidies, or paying school fees.

Digital payments added $296 billion to the GDP of 70 developed and emerging markets between 2011-2015, equivalent to the creation of 2.6 million jobs on average per year. Accessing digital payments requires access to digital technology. Half of the world’s population do not have access to the internet, even though 90% live within range of mobile-cellular networks. In the least developed countries, only 15% have access to the internet, with women generally having less access than men.

Digital equity is critical for addressing gender gaps. For women who disproportionately face barriers to credit, digital payments have the power to unlock to capital, resources, networks and financial knowledge.

3. Collaborative public-private partnerships

Visa Inc. and the Visa Foundation are committed to women’s economic advancement, working with local partners to address the increased challenges women are facing in terms of access to capital, financial/business skills and knowledge, and networks.

Collaborative public-private partnerships are the foundation by which innovative solutions can reach underserved communities. These programs have pivoted and adapted to the new challenges emerging from the pandemic, as well as helped bridge the gap in digital equity for women and women-led small businesses.

Here two some examples:

Women’s World Banking

Since 2017, the Visa Foundation and Women’s World Banking have used the power of cross-sector partnerships to address systemic barriers affecting women and women-led SMBs’ access to and usage of financial services.

During the COVID-19 lockdown in India, government to person (G2P) transfers were deposited into women-held PMJDY accounts. Prior to the pandemic, Women’s World Banking was working with the Bank of Baroda to increase women’s activation and usage of those accounts; now, they are positioned to help women access an important source of income that is crucial to their economic recovery.

Women’s World Banking’s partnership with Bank of Baroda is currently in pilot in Mumbai, Delhi and Chennai. The bank’s efforts have ensured that 72% of their female clients to date have accessed the funds in their accounts. In addition, the pilot seeks to nudge women to use their accounts for savings, and provides them with access to savings-linked overdrafts and micro-insurance.

Hand in Hand International

Visa Inc.’s partnership with Hand in Hand International is a three-year program that aims to empower more than 10,000 individuals in the greater Nairobi area – at least 75% of whom will be women – with business and financial skills training, mentorship and access to markets and financial services. Some 1,600 businesses with the highest growth potential will receive specialist training to help them scale up – a cohort and an aim that livelihood programs have traditionally overlooked.

While COVID-19 caused all in-person activities to be suspended for more than two months, the Hand in Hand team in Kenya pivoted resources to provide reliable information about the coronavirus and local resources, as well as advice on reorienting businesses towards producing and selling items such as face masks and soap.

Hand in Hand also checked in on members and their economic well-being, finding that at least 25% of respondents’ enterprises had closed, average savings had fallen by 69% and 40% had no savings at all, up from only 5% before the pandemic.

To meet the increased need among beneficiary communities, Hand in Hand resumed in-person recruitment and trainings with groups of up to seven participants as soon as it was permitted, following social distancing and health guidelines. It also moved training sessions outdoors and, in response to widespread fears that newcomers would bring the coronavirus to local communities, recruited 11 Community Resource Persons from inside target communities – many of them former Hand in Hand members themselves – to speed up member recruitment.

What's the World Economic Forum doing about the gender gap?

The World Economic Forum has been measuring gender gaps since 2006 in the annual Global Gender Gap Report.

The Global Gender Gap Report tracks progress towards closing gender gaps on a national level. To turn these insights into concrete action and national progress, we have developed the Closing the Gender Gap Accelerators model for public private collaboration.

These accelerators have been convened in ten countries across three regions. Accelerators are established in Argentina, Chile, Colombia, Costa Rica, Dominican Republic, and Panama in partnership with the InterAmerican Development Bank in Latin America and the Caribbean, Egypt and Jordan in the Middle East and North Africa, and Kazakhstan in Central Asia.

All Country Accelerators, along with Knowledge Partner countries demonstrating global leadership in closing gender gaps, are part of a wider ecosystem, the Global Learning Network, that facilitates exchange of insights and experiences through the Forum’s platform.

In 2019 Egypt became the first country in the Middle East and Africa to launch a Closing the Gender Gap Accelerator. While more women than men are now enrolled in university, women represent only a little over a third of professional and technical workers in Egypt. Women who are in the workforce are also less likely to be paid the same as their male colleagues for equivalent work or to reach senior management roles.

In these countries CEOs and ministers are working together in a three-year time frame on policies that help to further close the economic gender gaps in their countries. This includes extended parental leave, subsidized childcare and removing unconscious bias in recruitment, retention and promotion practices.

If you are a business in one of the Closing the Gender Gap Accelerator countries you can join the local membership base.

If you are a business or government in a country where we currently do not have a Closing the Gender Gap Accelerator you can reach out to us to explore opportunities for setting one up.

These examples illustrate some of the global innovations underway to reach underserved women and increase their access to capital. Visa and the Visa Foundation are committed to continue to work closely with our partners and to adapt to the ongoing needs of their members as we advance solutions to address the inequitable distribution of capital for women and women-owned SMBs, and lead the way towards an inclusive economic recovery.