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Women are at the heart of sustainable business
February 20, 2017
By Mary Ellen Iskenderian, President and CEO
Last year, I was invited to be a part of the Business & Sustainable Development Commission which brings together leaders from business, finance, civil society, labor, and international organizations to develop a private sector response to the challenges presented by the Global Goals. Specifically, the Commission has the “twin aims of mapping the economic prize that could be available to business if the UN Sustainable Development Goals (SDGs) are achieved, and describing how business can contribute to delivering these goals.” The fruit of our labors was released this month in the form of the Better Business, Better World report. In the report, the commissioners offer a prescription for a new, socially focused business model that can bring new resources and energy to parts of the global economy previously left largely to public aid.
I was struck while working with the Commission by how much the work of Women’s World Banking and our Network sits at the crossroads of two of the most important crosscutting themes of the SDGs: financial inclusion and women’s equality. Of the four SDGs the Commission has identified as “hotspots” of private sector opportunity, two of them—reduce hunger and food security (SDG 2) and achieve good health and well-being (SDG 3)—have been focal points of Women’s World Banking and our network for years. Together, we have shown the value, both socially and economically, of serving low-income women with financial services.
For instance, in the area of food security, we know that globally only 10% of rural residents use credit and that only half of them have access to a formal bank account. More importantly, women, who make up about half of the world’s farmers, are even more excluded. Recognizing this market opportunity, we worked with Banco Interfisa (Paraguay), Fundación delamujer (Colombia) and Caja Arequipa (Peru) to develop rural lending products with features tailored to the types of businesses and financial needs of the rural woman, as well as marketing and consumer outreach strategies designed to reach her. This work allowed these Network Members to broaden their footprint in rural areas, while giving their women clients the opportunity to grow their businesses and bring more stability to their household finances. Collectively, these institutions reached more than 100,000 clients with these loans, and in one of the institutions, more than doubled the percent of women in their portfolio. A recently completed outcomes study revealed that women who received this economic lifeline were empowered in their lives as well, increasing their assets and reporting stronger decision-making positions in their household and the ability to make investments in their home and the education of their children. The effects spread to their communities: whether they had shops or farms, women created local employment in their communities as well.
Health and well-being is another area where giving women access to meaningful financial services can make a huge difference. Insurance can prevent low-income families from falling deeper into poverty when health emergencies strike. We first developed Caregiver, a hospital-cash health microinsurance product, with Microfund for Women (Jordan) with a specific focus on covering maternal health issues. We have since expanded this product to Caja Arequipa (Peru), Al Amana (Morocco), Finance Trust Bank (Uganda) and Lead Foundation (Egypt), collectively reaching nearly 1.5 million clients. Women in the emerging markets represent an important untapped market opportunity for insurers: the IFC’s SheForShield report found that in the emerging markets, the value of health insurance premiums paid by women has the potential to grow from $5 billion today to $29-46 billion by 2030.
We also know that women’s financial inclusion will contribute to the achievement of the Global Goals beyond these so-called “hotspots.” We know that when women have control over discretionary income, they spend it on their families, particularly their children’s education: key to succeeding in SDG 4, fostering quality education. And for the first time, we have evidence that financial inclusion helps eliminate poverty (SDG 1): new research in Kenya has shown that M-Pesa helped an estimated 186,000 households (around 2 percent of Kenyan households) to move out of poverty. The impact for women was even more pronounced: women-headed households were twice as likely to be lifted out of poverty and researchers also found women shifted from subsistence farming to starting their own small businesses.
As the commissioners gathered to launch our report in Davos during this year’s World Economic Forum , I realized that the Commission had spent the past year identifying something that the Women’s World Banking network has known for nearly 40 years: development objectives cannot be sustainably achieved without placing women at the center. This report quantifies the economic prize of achieving the Global Goals (up to $12 trillion in additional GDP growth by 2030) and its recommendations underscore the centrality of women and financial inclusion: to truly reach the SDGs we can’t let them out of our sights.