This panel included a discussion on a variety of policy interventions that have the potential to increase access to finance for women. The case of Colombia was presented as an example of a collateral registry used to help women access credit, and the importance of data and indicators such as “Women, Business and the Law” and “Doing Business,” both produced by the World Bank Group, in encouraging countries to make reforms was noted. Innovations such as collateral registries and risk-sharing agreements with development banks were also mentioned as a way to increase women’s access to the financial system.
- Access to collateral is especially challenging for women, as laws around inheritance and owning land still favor men in many countries.
- The US saw a shift in women’s access to finance in 1988, when the Women’s Business Ownership Act passed (HR 5050), as previously a male signature was required on a loan. Business development centers opened around the country to assist women with education, confidence and access. This year, the centers worked with 145,000 women entrepreneurs on how to make a business plan, how to access capital and other issues related to running a business.
- “Women Business and the Law” looks at the law, civil code, constitution and family law in 190 countries. They assess how the law in each country may disadvantage women (including control over assets, authorization required for access to finance or to travel, restrictions on types of jobs, etc.) and publish it. Countries can then compare themselves to their peers, and this has inspired many reforms.
- Countries such as Colombia, China and Ghana are beginning to develop reforms in collateral. Nine years ago China passed a reform that allowed women to use accounts receivable as collateral. In 2010, Ghana opened the first modern collateral registry in Africa. Forty percent of the people who registered were women.
- This year the World Bank has brought a gender component into “Doing Business.” Indicators had previously been gender blind, and now if it is harder for women to set up a business, it will be recognized in the results.
- This year saw 280 reforms in more than 100 markets to improve countries’ ratings in “Doing Business” – more than ever before.
- Collateral registries reduce risk, reduce the cost of the credit and provide broader access to finance.
- Colombia worked with the IFC to develop the legal infrastructure to be able to use moveable property, rather than fixed property, as collateral. The system is much faster and more flexible than in the past.
- In Colombia the registry is provided by a private entity that serves a public function. In Mexico, which also has a collateral registry, it is administered by the Secretary of the Economy, and it is managed by a public organization in Costa Rica.
- Risk-sharing with development banks can help motivate first-movers in countries. The African Development Bank worked with commercial banks in Kenya, Tanzania and Cameroon to share risk and offer facilities that provide credit to women-owned enterprises. New clients were brought in through the risk-sharing facility and then were converted to traditional clients, with credit history and not requiring the guarantee the second time around.