Since childhood, Gircilene Gilca de Castro dreamed of owning her own business, but struggled to get it off the ground. Her fledgling food service company in Brazil had only two employees and one client when she realized she needed deeper knowledge about what it takes to grow a business. To take her business to that next level, she found the right education and mentoring opportunities and accessed new business and management tools.
In 2009, armed for the first time with a business strategy and newfound confidence, she successfully applied for two loans to purchase new equipment, upgrade her facility and hire staff. Gircilene's business revenue has now increased by 900 percent and her team has expanded to 45 employees, most of whom are women.
Gircilene from Brazil was able to grow her business after graduating from the Goldman Sachs 10,000 Women program, and is just one example of what is possible when ambitious women entrepreneurs have the resources and capital they need to grow their businesses. We are encouraged by these stories and the many organizations, institutions and innovative public private partnerships that are working around the world to empower women entrepreneurs and address the challenges they face in growing their businesses. But extensive research shows that access to capital still remains the biggest obstacle to the growth of women-owned SMEs.
Currently, 70 percent of women owned businesses globally do not have access to financial products and services, such as savings accounts and loans. This leads to a global credit gap for women that IFC estimates to be close to $300 billion. Goldman Sachs research Giving Credit Where It Is Due, shows that closing that gap could increase per capita income in emerging markets by an average of 12 percent by 2030. This gain could be as large as 25-28 percent for Brazil and Vietnam, where the credit gap in the formal SME sectors are currently widest.
On Saturday at the Global Entrepreneurship Summit in Kenya, President Barack Obama announced that the Overseas Private Investment Corporation (OPIC), the U.S. government's development finance institution, plans to join Goldman Sachs' 10,000 Women and International Finance Corporation (IFC) in the first-ever global finance facility dedicated to women-owned SMEs with a proposed $100 million commitment to help finance new projects in the many global markets where there is great potential empower women and grow economies.
The Women Entrepreneurs Opportunity Facility (WEOF), launched last year, aims to increase access to capital for 100,000 women around the world by working with banks in local markets to expand their lending to women-owned businesses. In its first year, the Facility has made progress towards that goal, completing nine deals totaling $180 million in nine countries that will reach 25,000 women entrepreneurs and this new partnership will help increase the reach of the facility and the number of women who have access to much-needed formal credit.
One example of the WEOF's promise is an investment made in Chase Bank Kenya. This lending facility, uniquely targets women entrepreneurs through women-only branches and specially-designed loan products. IFC estimates that only 7 percent of women-owned MSMEs in Kenya have access to formal credit so this focus on women is filling a significant market gap.
Thanks in part to the loan from WEOF, Chase Bank Kenya recently has been able to decrease the interest rates paid by women-owned businesses and is working to dramatically grow their portfolio of loans to women entrepreneurs. All of these efforts can help enable more women entrepreneurs to affordably invest in their businesses. This creates new jobs and contributes to local economic growth.
We are excited about the collaborative work being done to help close the gap, an effort that is aided by the United States government joining our partnership to invest in women entrepreneurs. This new support will extend the reach of the facility and help bring us closer to our goal of getting more capital into the hands of women entrepreneurs. Our hope is that many other investors and governments around the world will join this effort. By continuing to partner and innovate, more women will have access to these opportunities and their collective impact will help transform their communities and countries, to the benefit of us all.
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Jin-Yong Cai is the Executive Vice President and CEO of the International Finance Corporation, a member of the World Bank Group and the largest global development institution focused on private sector development.
Elizabeth Littlefield is the President and CEO of the Overseas Private Investment Corporation, the U.S. Government's development finance institution.
Dina Habib Powell is the Head of Goldman Sachs' Impact Investing Business and the President of the Goldman Sachs Foundation.