Kathmandu, Nepal, December 19, 2012—
IFC, a member of the World Bank Group, has released a study that finds women entrepreneurs could play a more significant role in Nepal’s economic growth if financial institutions address their financing needs with suitable offerings.
Currently, women own about 14,300 small and medium enterprises in Nepal, accounting for two percent of GDP and employing over 200,000 workers. The study suggests that meeting their current credit requirements of $106 million can increase their contribution to the economy. The SouthAsia Enterprise Development Facility, managed by IFC, in partnership with UK Government and the Norwegian Agency for Development Cooperation, carried out the study.
“The study is a much-needed initiative that provides banks and financial institutions with valid data to help design banking products and services, easing access to finance for women entrepreneurs,” said Barsha Shrestha, General Manager of Clean Energy Development Bank. “We are working to strengthen our product portfolio to support their businesses.”
According to the report,
Small and Medium Enterprise gender baseline estimation for IFC’s financial market portfolio in Nepal
, women are more entrepreneurial than men, generating 6 percent higher profits on annual sales even though they operate smaller businesses. Access to financing remains their biggest hindrance because banks prefer fixed assets as collateral that few women entrepreneurs possess. Other operational needs include improved access to markets and training for skill development. The study suggests credit rating and collateral registry should guide financial institutions, helping them tap into the $2.5 billion lending opportunity for small businesses.
“It is important that banks consider the requirements of women entrepreneurs an intrinsic part of their Small and Medium Enterprise strategy,” said Thelma Tajirian, IFC Program Manager for Access to Finance. “One solution is that banks allow use of movable assets as collateral when assessing their clients’ financial risks.”
IFC’s Access to Finance program facilitates growth of small and medium enterprises in Nepal, helping enhance their financing options through a supportive financial infrastructure, including institutions, financial product development, and improved payment regulations.
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. We help developing countries achieve sustainable growth by financing investment, mobilizing capital in international financial markets, and providing advisory services to businesses and governments. In FY12, our investments reached an all-time high of more than $20 billion, leveraging the power of the private sector to create jobs, spark innovation, and tackle the world’s most pressing development challenges. For more information, visit
www.ifc.org
.
Stay Connected
