Finance in Motion Director Iveta Tancheva-Nikolova delves into how the impact investors harnesses capital and capacity building to empower women economically.
In many emerging markets, limited access to capital, discriminatory lending practices, and rigid societal norms keep women entrepreneurs from realizing their full potential and fully participating in the economy. This is especially evident in the Middle East and North Africa (MENA) region, where women face significant challenges in economic participation. Impact investing is emerging as a powerful catalyst in creating economic opportunities for this group.
Broadening access to finance
Impact investing presents a viable solution to expand access to finance for micro, small, and medium-sized enterprises (MSMEs), particularly to women-led businesses, allowing investors to obtain both financial and social returns.
One such example of an impact investment fund is the SANAD Fund for MSMEs (SANAD), advised by Finance in Motion, which operates in the MENA region.
The SANAD experience
Leveraging its long experience and market insights, SANAD works closely with financial institutions to provide responsible finance and technical assistance to MSMEs, with a specific emphasis on empowering women. The fund collaborates with local banks and microfinance institutions to improve their understanding of gender-related challenges and create financial products that meet the particular needs of women entrepreneurs. Since its inception, SANAD has supported over 328,0001 jobs in the region, 34% of which are held by women.
Because access to finance alone is not a guarantee for business success, SANAD works with its Technical Assistance Facility (TAF) to ensure both partner institutions and end-borrowers get the support they need to thrive. The Womenpreneur Tour, an initiative for facilitating investment in women and girls in the MENA region, illustrates how the TAF strengthens entrepreneurship – and contributes to maximizing the impact of SANAD’s investments.
A recent study sponsored by SANAD – “Growing the gender lens investing landscape in the Middle East and North Africa” – points to the tremendous potential of women-led businesses in Egypt. The study proposes concrete strategies to address the financing gap they face, including capacity building for financial institutions, targeted mentorship programs, and a dedicated network for women entrepreneurs. Such research-backed insights, actively supported by SANAD and Finance in Motion, are vital for developing effective measures to promote women’s economic empowerment.
Mobilizing the investor community
Beyond the efforts of individual funds like SANAD, the impact investing community as a whole has recognized the importance of empowering women in business. Initiatives such as the 2X Challenge, Data 2X, and the GIIN’s Gender Lens Investing Knowledge Hub aim to enhance targeted financing for women-led enterprises.
"When women do better. Economies do better.”Christine Lagarde, President of the European Central Bank
Promoting women in business matters because it brings diverse perspectives, innovative ideas, and inclusive leadership to the forefront. When women are given equal opportunities to thrive and succeed in the business world, it not only benefits them individually but also uplifts communities, paves the way for a more equitable and prosperous society and comes with an substantial economic benefits: Estimates show that increasing the share of labor participation among women to match the male employment rate, it could increase GDP in the MENA region by 57% - or as much as USD2 trillion.2
Empowering women for economic success
Through initiatives like SANAD, Finance in Motion as well as many other impact investors are actively working to empower women in business. By leveraging the power of finance to foster women's economic empowerment, impact investing becomes a catalyst for sustainable development and inclusive prosperity.
1 Cumulative figure since SANAD‘s inception
2 PwC (2022): Women in MENA workforce could increase GDP by $2 trillion: PwC Middle East survey (https://www.pwc.com/m1/en/media-centre/2022/women-in-mena-workforce-could-increase-gdp-by-2-trillion-pwc-me-survey.html#:~:text=The%20economic%20prize%20from%20getting,as%20much%20as%20%242%20trillion).