Goldman Sachs Group Inc. and the World Bank said they will invest $132 million to push banks in developing economies to lend to women-owned businesses.
The money will fund a new facility run by the World Bank’s private-sector arm that will extend lines of credit and share risks with local banks to ensure they give female entrepreneurs access to financing for their small and medium-size companies. The two contributors plan to raise an additional $468 million from other investors, the World Bank said today in an e-mailed statement.
“Gender equality is smart economics and a key driver of development,” World Bank President Jim Yong Kim said in a speech in Washington announcing the partnership today. “We need to do more so that investing in women becomes mainstream by businesses and financial institutions alike.”
The bank estimates that women-owned companies face a $300 billion credit gap, made worse in some countries by unfavorable regulation. Closing that gap would raise income per capita across the main developing economies, with Brazil and Vietnam gaining the most, according to Goldman Sachs research.
The World Bank’s International Finance Corp. unit will invest $100 million in the so-called Women Entrepreneurs Opportunity Facility, with Goldman Sachs providing $32 million, the World Bank said.