Global Best Practices in Banking Women-Led SMEs

Suggesting steps to implement best practices in reaching women-led SME markets

This paper studies global practices of financial institutions in serving women-led small-to-medium enterprises (SMEs) and provides recommendations to enable banks to adopt a few best practices. It identifies approximately 90 financial institutions that have focused efforts to reach women’s market. The paper states that in 2012, around 126 million women were starting or running new businesses in 67 economies around the world but despite the growth and contribution of women-owned businesses there is tremendous gap in their access to finance. It also suggests that around 70% of women-led SMEs are either unserved or underserved financially. The paper notes that banks that have been most successful were early adopters in targeting the women’s market, driven by executive leadership understanding the market opportunity and committing resources. Beyond financial products, these banks also offered non-financial services for women entrepreneurs, mentoring and networking opportunities, and developed key performance indicators to demonstrate success. Best practices highlighted include:

  • Know your market and customer;
  • View women-led SMEs as a distinct group;
  • Build internal capacity;
  • Adapt your credit processes, lending methodologies, and delivery models;
  • Offer women a comprehensive mix of financial and non-financial products and services;
  • Invest in proving the business case through disaggregated data.