The World Savings Bank Institute (WSBI-ESBG), with the substantial support of its Indian member, the State Bank of India, and in collaboration with the World Bank’s SME Finance Forum and the International Finance Corporation’s Women Entrepreneurs Finance Initiative (We-Fi), organized and hosted the WSBI’s G20 India Side Event & Reception on the 14th of September 2023. This event was officially recognized as part of the G20 side events under this year’s presidency in Mumbai.

In accordance with its long-term objectives and reflecting the urgent concerns of its 95 global members, the WSBI panel delved into the pivotal role the banking sector can assume to bolster women entrepreneurs. The panel, named “Gender equity and SME financing in a digital landscape,” was inaugurated by WSBI Managing Director, Peter Simon. Distinguished panellists included Wendy Teleki , Head of Women Entrepreneurs Finance Initiative (We-Fi) The World Bank, Saloni Narajan, Deputy Managing Director & COO of  State Bank of India, Colin Daley, Senior global Advisor from IFC – International Finance Corporation, Nina Fenton, Head of Regional Representation, South Asia  European Investment Bank (EIB) and Syel Abdul Momen, Deputy Managing Director & Head of SME BRAC Bank Limited.

Mr. Simon (WSBI) explained how women, especially those leading SMEs, face distinct challenges that must be addressed by the Savings and Retail Banks as key players in the financial sector.

Some of the hurdles that women face ranges from accessing finance, navigating intricate regulations, to balancing climate goals with immediate concerns like high energy expenses, inflation, and fluctuating commodity markets. Such challenges are even more pronounced for women led MSMEs, especially within financial systems dominated by banks.

Women-led SMEs (WMSMEs) remain underrepresented in the financial sector, representing a mere 28% of its clientele. This disparity was emphasized by Ms. Teleki, WeFi, who commended the WSBI’s dedication to address it.

The gap between financial need and availability is huge. Of the 8.9 trillion USD required for MSME finance, only 3.7 trillion USD is on offer, with WSMEs accounting for a stark 32% of this deficit. Barriers from both demand and supply sides exacerbate these disparities. According to Mr Memon, Brak Bank, solutions to those issues do exist, as BRAC’s experience and pioneering work in Bangladesh is showing.

The Women Entrepreneurs Finance Initiative (WEFI) led by the World Bank, estimates a staggering $5 trillion loss in global value due to this financial neglect.

WSBI in collaboration with the Mastercard Foundation, the WSBI’s Scale2Save Partnership, similarly points out the undervaluation, informality, and reduced job creation by female-owned enterprises. Mr. Daley (IFC), drawing from his extensive African experience, echoed these sentiments, spotlighting the necessity for more accessible funding avenues for female entrepreneurs.

On the other hand, OECD’s research highlights that women entrepreneurs in advanced economies face strikingly comparable hurdles. Ms. Fenton (EIB) expanded on this, discussing EIB’s initiatives in Europe, particularly their efforts to foster gender data availability.

Yet, there’s optimism for the future. As emphasized by Ms. Soloni (State Bank of India), digital financial services customized for women led MSMEs, coupled with universally acknowledged digital identities, could redefine financial inclusion.

Mr. Simon (WSBI) , explained how, given the absence of gender-specific data, it’s imperative for policymakers, the entire industry, and the banking sector for a better understanding of their female customers, to compile exhaustive gender-centric data and standardize definitions for women-driven businesses.

Peter Simon also stressed how banks are key to this transformative journey, and they need to address the following challenges:

1. Cultivate gender sensitivity by building meaningful relationships with women clients. WSBI members are very well-positioned to do this under the well-respected 2X Criteria on leadership, staffing and market as it is shown on the WSBI’s members pilot data survey.
2. Establish and monitor gender-focused targets by amplifying women’s credit access and evaluating progress through global benchmarks.
3. Offer holistic non-financial services surrounding women with a spectrum of resources from financial assistance to mentorship.
4. Utilize technology for enhanced services by modernizing data management and enriching customer experiences with state-of-the-art platforms.
5. Adopt non-traditional collateral through facilitating women’s access to credit by recognizing diverse collateral forms.

In conclusion, the panel concluded there is a clear need to drive a transformative shift towards financial equity unleashing the potential of women entrepreneurs across the globe