Giving Credit Where it is Due

This paper discusses the return opportunities available through investing in women and girls in the developing world. It reports that women have higher propensity to use their earnings and increased bargaining power to buy goods and services that improve family welfare can create a virtuous cycle.

The paper looks at the role of women-owned small- and medium-sized enterprises (SMEs) in raising labor force participation and boosting economic growth in emerging markets. Findings include:

• Only one-third of the world's SMEs in the formal sector are currently run by women, with a wide variation across countries and plenty of scope for growth;
• Women-owned SMEs face barriers to entry and business growth that include access to education and training, legal and cultural barriers and infrastructure-related challenges;
• Access to finance is typically identified as a critical constraint;
• closing the credit gap for women-owned SMEs in the BRICs and N-11 countries over the next few years could boost real income per capita growth rates in those countries by around 85bp on average
• Initiatives to expand SME financing exist, but few have a gender-specific component.