Lindy Mtongana: Championing Women’s Economic Inclusion at IFC Audio Stories
Welcome to IFC Audio Stories, where we delve into private sector solutions for global development challenges. I’m your host, Lindy Mtongana, and today, we’re shining a spotlight on a critical issue: women’s economic inclusion. While Women’s Month may conclude in March, the imperative to advance women’s economic participation is a year-round commitment. In this episode, I’m joined by Jessica Schnabel, the International Finance Corporation’s (IFC) Global Head of Banking on Women. Together, we’ll explore how the IFC and the World Bank Group are prioritizing gender to foster a more sustainable and inclusive future.
The Importance of Investing in Women
As we discuss the theme of this year’s International Women’s Day, “Invest in Women: Accelerate Progress,” Jessica emphasizes the significance of the word “accelerate.” She explains that sustainable economic development hinges on the inclusion of women—not just as entrepreneurs but also as leaders, employers, and employees. To truly accelerate progress, a collective effort is required from all sectors—public, private, and multilateral development banks. The call to action is clear: we must focus on integrating women into economic solutions to meet our global goals.
Navigating Global Crises with Gender Inclusion
The World Bank Group is currently developing a new gender strategy amidst a backdrop of global crises, including pandemic recovery, climate change, and conflict. Jessica highlights that including women in crisis response is essential. Addressing gender gaps is not just a matter of equity; it’s a necessary strategy for tackling economic, social, and climate challenges. The overarching goal of the World Bank Group’s Gender Strategy is to promote gender equality as a pathway to a sustainable, resilient, and inclusive future.
Banking on Women: A Tailored Approach
Turning our attention to the “Banking on Women” initiative, Jessica explains how gender-focused financial instruments can help close the gender gap. The key takeaway? Financial institutions must design their services with women in mind. By tailoring products and services to meet the unique needs of women, banks can enhance their value and profitability while simultaneously contributing to economic development. Jessica notes that women-owned small and medium-sized enterprises (SMEs) are particularly valuable customers, often demonstrating lower non-performing loan ratios and higher repayment rates.
The Financial Commitment to Women
This year alone, the IFC has committed approximately $2 billion to women and women-owned SMEs through its financial institution investments. Jessica stresses that a gender-neutral approach is insufficient; financial institutions must actively design for women. The Banking on Women initiative aims to catalyze sustainable financial services for women and women-owned SMEs in emerging markets. This includes offering a range of financial products and advisory services to help institutions better understand and serve their female clientele.
The Role of Fintech in Empowering Women
As we discuss the role of fintech in empowering women economically, Jessica addresses a common misconception: that fintech companies, due to their digital nature, inherently understand and cater to women’s financial needs. While there has been progress in digital financial services, women still represent less than 25% of fintech customers. Although many fintech firms collect sex-disaggregated data, fewer than one-third utilize this data to design products specifically for women. Jessica emphasizes that the business case for serving women is strong, and there is significant potential for growth in this sector.
Impactful Programs Driving Change
Jessica shares insights into various programs and initiatives that are making a tangible difference for women in the markets where the IFC operates. One significant challenge is the $1.5 trillion finance gap for women-owned SMEs, compounded by legal barriers and a lack of access to startup capital for women entrepreneurs. The IFC is committed to a gender-inclusive investment approach, focusing on solutions across the public and private sectors.
One notable initiative is the “Women, Business and Law” report, which highlights legal disparities between men and women. Understanding these differences allows the IFC to develop targeted programs, such as housing finance for women. Another impactful program is “She Wins Africa,” which supports early-stage women entrepreneurs by providing training, funding, and access to business incubators and accelerators. This initiative aims to bridge the gap in financing for women-led startups, ultimately fostering a pipeline of successful SMEs.
A Passion for Gender-Inclusive Growth
As our conversation wraps up, Jessica’s passion for advancing women’s economic inclusion is evident. The IFC’s commitment to gender-inclusive growth is not just a strategic priority; it’s a vital component of sustainable development. By investing in women and designing financial services that cater to their needs, we can create a more equitable and prosperous future for all.
Thank you for joining us on this enlightening journey into the world of women’s economic inclusion. Stay tuned for more discussions on how the private sector can address global development challenges.