This week, top economic thinkers and policymakers will descend on Washington for the 2024 World Bank Annual Meetings. Heading into events like these, it’s all too easy to lock in on the hot-button issues of the day and forget about the important unfinished business of past sessions — none more urgent and impactful than efforts to create a just economy that includes the full financial inclusion of women.
One person whose focus on this topic never wavers is Melinda French Gates, a fierce advocate of women’s empowerment on the international stage year after year. As the world moves on to the latest “shiny object,” she remains steadfast in her message that supporting women is the most effective way to grow local and global economies and usher in prosperity and peace. At FINCA, we share French Gates’s unshakeable commitment to women’s full financial inclusion and make it one of the core drivers of all our work.
Economic Benefits of Gender Equality: What’s at Stake
Despite incremental progress in this area, there’s so much left to do. The World Bank calculates a $1.7 trillion gender financing gap — a colossal shortfall between the amount of capital women need and what they receive. Closing that gap could add $5-6 trillion to global GDP.
Meanwhile, 2.4 billion working-age women are not afforded the same economic opportunities as men, and in several parts of the world, only one in five women participate in the workforce. Eliminating gender inequality in employment and entrepreneurship could raise long-term GDP per capita by an average of nearly 20% across countries.
That’s why investing our time, energy, and resources into closing these gaps is not just the right thing to do, it’s an economic imperative. But at the current rate of progress, experts claim that it will take 131 years for women to achieve full parity with men. Not only is this unfinished business, it’s fair to say we’ve just gotten started.
Women’s Financial Inclusion: More Than Just Access to Capital
French Gates joined a panel at the 2023 World Bank Spring Meetings to make the case for helping women realize their economic power. “The data tells us that when you invest in a woman, she invests in everyone around her. Women are economic engines and agents of change,” she emphasized. That’s because women are more likely to channel their earnings back into their families and communities, driving education, health, and overall well-being.
Like French Gates, FINCA understands the urgent need for women’s full financial inclusion, which is why we put women at the center of everything we do. Women run 57% of FINCA-funded businesses in Africa, 47% of the start-ups we have invested in have women founders, and women make up 44% of FINCA’s global staff. Our programs provide women with the resources and agency they need to keep food on their tables, pay for their children’s education, and pursue their ambitions.
We know that a lack of access to capital constrains the growth of many women-led enterprises. Women also face other barriers that hinder their full economic participation, including financial literacy gaps and cultural norms. Technology offers enormous benefits for increasing banking access, affordability, and services, but it also brings along its own difficulties and biases.
I saw a clear example of this when I was in the Democratic Republic of the Congo to help launch a fee-free mobile banking application. I met two women in line to make a transaction at a FINCA branch and excitedly told them how the new app would save them time and transportation costs by eliminating trips to the bank. One of them looked at me and said, “I don’t have a phone.” The other pulled out her phone and said, “I don’t know how to read.”
Addressing these complexities requires a holistic and systematic approach that encompasses the entire life cycle, including education, mentorship, and community support, as well as an understanding of the forces — like extreme weather events — that can knock women off track. Financial service providers like FINCA that are deeply rooted in communities are best poised to listen to women’s unique needs and aspirations and design solutions to respond accordingly.
Changing the Rules: A Need for New Approaches
Unfortunately, the dollars directed toward women are still paltry. Despite the evidence of lower risk, higher returns, and better performance, gender bias persists. French Gates talked about this in a PBS NewsHour interview coinciding with the World Bank Spring Meetings earlier this year. “I’m arguing for fixing the system,” she said, explaining that she is currently channeling her efforts to have funding flow directly to women.
Putting money into the hands of women takes innovative strategies. In many countries, women still need their husbands or a male family member to sign off on a loan and lack the collateral to prove creditworthiness under traditional funding structures. French Gates advocates for “grant-making at the beginning to get women organized, and then mentorship and sponsorship to [teach them] how to start their business,” followed by the removal of structural barriers to increase access to credit. Institutions like FINCA can support these efforts by collaborating with regulators, funders, and partners to address the challenges women face — whether through advocacy or product design.
I also wholeheartedly support French Gates’s call for the development community and donors to create guarantee funds that incentivize players in Africa’s capital markets to work with us. When we can borrow in local currencies rather than hedging against volatile international exchange rates, we will be better positioned to lower our sustainability threshold and offer reduced interest rates. When we can design funding vehicles that prove resilient through crises, our customers and institutions will be better prepared to weather shocks and get back on their feet afterward. Making a lasting impact requires a longer-term commitment.
If we work together from international to local levels, a future where women’s economic power achieves its full potential is not out of reach. French Gates cites India as a great example: “They’ve looked at the gender gap and are trying to get more women to have their own bank account. They’re now scaling and getting resources out to women — and they’re starting to see [the country] on the economic rise in a huge way.”
The journey towards full economic inclusion for women is complex and ongoing. It requires the collective effort of organizations, governments, and individuals to create an ecosystem that provides tools for financial independence and addresses the underlying social and educational barriers. “Spend money on gender because it’s well-spent money that makes a difference,” French Gates concluded at the 2023 World Bank Spring Meetings. Her focus has not wavered since then, and neither should ours.