'Women-Owned MSMEs face Gender Bias': IFC Report

A new report by International Finance Corporation has revealed that women-owned Micro, Small and Medium Enterprises (MSMEs) come across gender bias in terms of trade finance access. The report indicates the gender bias being the reason towards limiting economic growth as well as perpetuating poverty in emerging markets.

Despite substantial contribution by women-owned ventures to different sectors that includes agriculture and retail in countries such as Nigeria, they are facing disproportionate challenges in securing trade finance from banks, as stated by the global development institution.

The report mentioned, “Women-led businesses are often viewed as inherently riskier, leading to reluctance in extending credit as women prioritise household obligations over business commitments. Incomplete records, small business size, and lack of collateral exacerbate the challenges faced by women entrepreneurs.”

The mentioned factors exemplify why enterprises that are owned by women face problems in hard loan requirements in addition to frequent rejections from financial institutions.

RPA’s vice president of economic inclusion, Henrietta Bankole-Olusina said, “Men and women have similar rates of formal borrowing. On the surface, this suggests that men and women face similar preferences and challenges in accessing credit. However, the large gender gap in account ownership suggests that men and women have different financial behaviours. If gender is considered as the only differentiating factor between these consumers, there may be key characteristics that are obscured by gender, but that also affect access and use of financial services, particularly credit.”