A joint initiative of Goldman Sachs and the World Bank, the new $600M fund will support female-founded small businesses in the developing world.
By Jessica Stillman (Editor, Women 2.0)
Investing in women in developing countries pays outsized dividends. Why? Studies show that as women earn more, they invest a larger percentage of those new-found resources in their families and communities. In other words, help a woman and she is likely to pass that help on, multiplying its effect. A new $600 million fund created by the World Bank and Goldman Sachs aims to take advantage of that fact.
The Women Entrepreneurs Opportunity Facility has been set up to support female-founded small and medium enterprises in the developing world and will will be seeded with anchor investments of $50 million from the Goldman Sachs Foundation and $100 million from the World Bank’s International Finance Corporation. Philanthropy News Digest lays out the specifics:
IFC estimates that about 70 percent of women-owned SMEs in developing countries are unserved or underserved by financial institutions, while new research by Goldman Sachs shows that increasing women's access to capital can boost per capita income in developing and emerging markets. "There is a credit gap," Dina Powell, president of the Goldman Sachs Foundation, told the Financial Times.
Closing that gap isn’t just about empowering female entrepreneurs themselves, but also about transforming the communities around them, as Lloyd C. Blankfein, CEO and chair of Goldman Sachs, highlighted in a release announcing the new fund: “investing in women leads to economic growth and job creation, but there is clearly more that can be done to unlock the potential of women-owned businesses.”
The new fund builds on Goldman’s business training program, 10,000 Women, which was started in 2008.
Jessica Stillman (@entrylevelrebel) is an editor at Women 2.0 and a freelance writer with interests in unconventional career paths, generational differences, and the future of work. She writes a daily column for Inc.com, contributes regularly to Forbes and has blogged for CBS MoneyWatch, GigaOM and Brazen Careerist, among others.
Image credit: World Bank Photo Collection via Flickr.