Women Entrepreneurs Drive Growth
For years, women entrepreneurs in emerging markets have faced significant barriers when seeking access to finance, despite playing a vital role in driving economic growth and job creation. While many financial institutions continue to view women-owned businesses as a challenging market segment, new evidence suggests the opposite may be true. Data collected over the past decade indicates that women-owned small and medium-sized enterprises (SMEs) are not only reliable borrowers but also represent one of the most promising opportunities for sustainable business growth.
A decade-long survey conducted by the International Finance Corporation (IFC) among financial institutions across emerging markets reveals a compelling reality: women-owned SMEs consistently demonstrate strong repayment performance and lower credit risk, yet they remain significantly underserved by the financial sector.
A Financing Gap That Persists
Women-owned SMEs account for more than one-third of all micro, small, and medium-sized enterprises in emerging markets. Despite their substantial presence in the economy, they continue to receive a disproportionately small share of available financing.
According to IFC data, women-owned SMEs represented just 19% of the total outstanding SME loan volume among surveyed financial institutions in 2024. This funding gap persists despite growing recognition of the important role women entrepreneurs play in fostering innovation, employment, and economic resilience.
Several factors continue to limit access to finance, including insufficient collateral, limited credit histories, weak digital footprints, regulatory constraints, and financial products that often fail to meet the specific needs of women-led businesses.
Stronger Loan Performance, Lower Risk
One of the report’s most significant findings is the consistently strong credit performance of women-owned SMEs.
Among 153 reporting financial institutions in 2024, women-owned SMEs recorded a non-performing loan (NPL) ratio of 3.6%, compared with 3.8% for the overall SME portfolio. While the difference may appear modest, it reflects a pattern that has remained consistent over the past ten years.
The data demonstrates that women entrepreneurs repay their loans at higher rates than the average SME borrower, challenging long-held assumptions about risk and highlighting the strength of women-owned businesses as a lending segment.
Smaller Loans Despite Strong Results
Despite their positive repayment records, women-owned SMEs continue to receive smaller loans than their peers.
The average loan extended to a women-owned SME is 28% smaller than the average SME loan. In addition, women-owned businesses accounted for only 27% of the total number of SME loans issued in 2024.
These figures underscore a persistent disconnect between the proven performance of women entrepreneurs and the level of financial support they receive.
Regional Differences Highlight Untapped Potential
Access to finance for women-owned businesses varies significantly across regions.
In Asia, women-owned SMEs accounted for approximately one-third of total SME loan volumes among participating financial institutions in 2024. By contrast, their share dropped to just 9% among financial institutions in the Middle East and Central Asia.
This disparity points to substantial untapped opportunities for banks and policymakers seeking to expand financial inclusion and unlock new sources of economic growth.
The Power of Better Data
According to IFC, one of the most effective tools available to financial institutions is the data they already possess.
Collecting and analyzing sex-disaggregated data allows banks to better understand the needs, behaviors, and financial performance of women-owned businesses. Armed with these insights, institutions can develop targeted products, improve customer engagement, and identify new growth opportunities.
Since 2023, IFC’s Banking on Women program has been supporting financial institutions in strengthening their capacity to collect, analyze, and act on gender-disaggregated data, helping transform information into actionable business strategies.
Targeted Strategies Deliver Results
The survey also demonstrates that financial institutions with dedicated strategies for serving women entrepreneurs achieve stronger outcomes.
Among the 51 institutions participating in IFC’s Banking on Women initiative, 75% reported growth in the share of women-owned SMEs within their loan portfolios. In comparison, only 48% of institutions without a dedicated strategy experienced similar growth.
The findings suggest that tailored financial products and services are not only advancing financial inclusion but also helping banks expand their customer base, improve portfolio quality, and strengthen long-term profitability.
As financial institutions search for new avenues of growth, the evidence is becoming increasingly difficult to ignore: investing in women-owned SMEs is not merely a social objective—it is a sound business strategy.
Source: International Finance Corporation (IFC)