The Women Entrepreneurs Finance Initiative, also known as We-Fi is a $1 billion dollar fund and potential game changer in accelerating the further expansion of women’s entrepreneurship in developing countries beyond the micro level.
Launched at the G20’s leaders’ summit in July, the fund, administered by the World Bank and International Finance Corporation will be allocated to programs initiated by multilateral organizations such as the Inter- American Development Bank (IDB), Asian Development Bank (ADB), African Development Bank and others.
But will it work? Beyond the initial investment… will it be able to create more opportunities for women to start, grow and reap the benefits of successful entrepreneurship? Three issues are important to consider in the process before actual funding takes place: Ensuring longevity, Avoiding ghettoization, and Target group identification.
$1 billion USD is substantial amount but not a limitless supply of money. Past experiences have shown that similar types of programs such as guaranteed loans for women entrepreneurs disappear once the project funding has been spent.
The issue is embedding a new gender aware mindset within the implementing institutions.
- This approach should include gender training for all decision-making levels and departments, not only the directly affecting staff. Brainstorming how other services could also be offered, developed and integrated.
- A timeline for the stages of integration should be developed prior to project approval so that only institutions that are committed to integrating and ensuring the continuation as well as expansion of services receive funding.
- See also the next point below….
2. Women entrepreneurs are ‘ghettoized’ and only considered for funding earmarked for women entrepreneurs
An important sub-component of the We-Fi should be raising the visibility of women entrepreneurs through metrics and data collection:
- Metrics need to be systematically integrated and increase the data on women entrepreneurs (who get funding and outcomes) what works and what doesn’t work.
- There should be an individual skilled in data collection included in the project team and budget.
- Before data collection, the needs of three key stakeholders must be incorporated: 1) What types of metrics do fund managers need? 2) What type of data helps in further project development and implementation? 3) What type of data would be useful for policy making at the regional/national level?
- The collected data should be compiled and developed into analytics.
- The resulting analytics are made available to other institutions (banks, funding agencies, multilaterals) as tools to screen/access potential candidates for funding (similar to the use of psychometrics for bank loans).
3. Maintaining a focus on high growth women entrepreneurs
Surprisingly, this may be the most difficult issue to address. Operationalizing ‘growth oriented’ entrepreneurship is especially tricky since existing definitions tend to be vague or difficult to measure. Yet it is of paramount importance that the growth aspect not be lost in the administration of programs and initiatives. Clear definitions of growth-orientation need to be developed since traditional micro-finance programs are not able to meet the funding or capacity building needs of growing businesses.
Working definitions should be developed prior to project funding and incorporate elements of business track record (employees, revenue, profits), sector viability, innovativeness (current and potential) entrepreneur human and social capital (skills, networks, experience, education, etc.) as well as aspirations for growth. See earlier blog on Defining high growth/high impact entrepreneurship.