WASHINGTON (Reuters) - A Goldman Sachs-World Bank Group partnership to provide capital to women entrepreneurs in emerging markets has reached $1 billion in investments, the institutions said on Friday, far surpassing their original goal of $600 million.
The Women Entrepreneurs Opportunity Facility, launched in 2014 by Goldman and the World Bank’s International Finance Corp private-sector development arm, had initially set a goal of providing capital to 100,000 women entrepreneurs over 10 years, but has reached 50,000 in just four years.
The institutions said $1 billion in investments were made in 26 financial intermediaries in 26 countries, including some of the world’s poorest and most conflict-affected states.
These so-called “anchor” investments in small banks and non-bank financial institutions provide capacity and incentives to boost lending to women-owned businesses, which typically have a hard time gaining financing, particularly in emerging market countries.
The World Bank Group estimates that some 70 percent of women who own small and medium-sized enterprises in the developing world are either shut out of financial institutions, or can only get high-cost short-term loans. This has resulted in a $1.5 trillion credit deficit for women entrepreneurs in emerging markets.
“The fact that we have surpassed our original target by 40 percent this early on shows that there is huge demand for these investments,” said Cristina Shapiro, global head of Goldman’s 10,000 Women program, which provides access to capital, mentoring and education to women entrepreneurs.
IFC initially contributed $100 million towards the Women Entrepreneurs Opportunity Facility, along with a $43 million investment from the Goldman Sachs Foundation.
Reporting by David Lawder; Editing by Bernadette Baum