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Background

Mainstreaming Gender Responsive Investment through Public Private Partnerships David Ashiagbor Economic Adviser Commonwealth Secretariat. Background.

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Background

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  1. Mainstreaming Gender Responsive Investment through Public Private PartnershipsDavid AshiagborEconomic AdviserCommonwealth Secretariat

  2. Background Promoting investment is a core activity of the Commonwealth Secretariat. The programme aims to help member countries attract increased levels of investment, and expand access to finance for excluded groups. • Commonwealth Private Investment Initiative (CPII) • Support the development of local financial markets • Assist countries to improve their business environment

  3. Barriers to Gender Responsive Investment Based on the WEDI Report: • Lack of collateral • Lack of information • Smaller size of business compared to male owned business • Lack of access to business development services • Family obligations As a result, women entrepreneurs are perceived by financial institutions as being more risky than their male counterparts, and it is more costly for banks to lend to them than to an equivalent male owned business.

  4. Mainstreaming Gender Responsive Investment Mainstreaming gender responsive investment requires action by a variety of actors: • Policymakers – need to identify and understand which policies, laws and regulations hinder access to finance for women, and why; • Financial Institutions – need to be familiar with obstacles facing women entrepreneurs, understand the business opportunity and develop products and structures to service it; • Women – need to upgrade business skills and knowledge, organise themselves so that their voices can be heard. None of these on their own is sufficient – they all need to work in partnership

  5. Policy Makers Business procedures and legislation often have different impacts on women and men. • Barriers to formalisation often have a disproportionate impact on female entrepreneurs • Land allocation practices and property rights are fundamental constraints to women accessing finance Addressing these issues requires policymakers to work with women entrepreneurs and financial institutions to identify gender dimensions of business procedures and legislation

  6. Improving Business Procedures and Legislation Uganda Women comprise 39% of businesses with registered premises, yet their businesses remain small and employ fewer workers • The Ministry of Finance asked IFC to conduct a Gender Growth Assessment in 2005 to understand why • The GGA was a consultative process that involved stakeholders in both private and public sectors • The process identified gender dimensions of legal and administrative barriers to investment • Recommendations were incorporated into Uganda’s National Competitiveness Strategy and National Gender Strategy and the Companies Act redrafted to reflect international best practice Addressing these inequalities could increase GDP growth in Uganda by 2% per annum.

  7. Financial Institutions Few financial institutions are familiar with the obstacles female entrepreneurs face: • Under representation in the formal sector • Limited market data • Perceived credit risk Mainstreaming GRI requires working with financial institutions to develop and implement appropriate products instruments which help to mitigate risk and reduce costs.

  8. Case Study: Growth Oriented Women Enterprise Programme funded by AfDB and partners to support Kenyan women entrepreneurs with potential to access funding. • Risk sharing guarantees to selected banks to cover 50% of loan portfolio to target group • Business development services • Gender sensitive training to financial institutions and other service providers • Portfolio has a default rate of less than 5% • Increase of 15 – 20% in portfolio of target clients • Creation at least 500 jobs GOWEs results due to the structure of the guarantee, which encourages risk sharing, combination of capacity building and technical assistance.

  9. Financial Institutions Other products could include • Credit bureaus – to help build credit histories (personal and corporate). • Alternative methods of finance – such as leasing, factoring help to provide access for those without collateral and / or credit histories Financial institutions must also learn from each other: • The Global Banking Alliance for Women (GBA) is a worldwide consortium of best practice banks serving women and helps members to identify and share best practices (www.gbaforwomen.org) Key success factors include working with partners, gender sensitive delivery, leadership and availability of technical assistance and capacity building at all levels.

  10. The Role of NWMs NWMs have a key role to play through : • Supporting the development of vibrant and effective business associations • Working with colleagues in other government departments to identify and address gender dimensions of business legislation, administrative procedures and other policies which impact women owned businesses • Working with financial institutions them to identify opportunities and develop best practice models to service them • Creating a platform for continued dialogue between female entrepreneurs, policy makers and financial institutions

  11. Thank You

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