Sharmila Raj Jain, owner of PD Fluted Cartons and graduate of Goldman Sachs <i>10,000 Women</i> business education program in 2009, speaks at a Goldman Sachs event in New York City, March 2023.

The gender credit gap is holding back growth worldwide

Published on23 MAY 2023

Sharmila Raj Jain, owner of PD Fluted Cartons and graduate of Goldman Sachs 10,000 Women business education program in 2009, speaks at a Goldman Sachs event in New York City, March 2023.

The case for encouraging, empowering, and enabling women entrepreneurs is straightforward: around the world, female entrepreneurs drive both economic growth and help to reduce poverty. According to the World Bank, there are now about 8 million to 10 million formal small and medium enterprises (SMEs) with at least one female owner in developing countries.

Yet a massive global credit gap persists for women-owned businesses, estimated at $1.5 trillion. More than 100 countries still have legal barriers to women’s entrepreneurship, including laws forbidding women from signing contracts, registering their business, or opening bank accounts, while gender-based credit scoring and investors’ cultural biases compound the issue further.

Even then, many banks in developing markets demand fixed assets – like land titles or property deeds – as collateral for loans. This creates a further hurdle for women whose assets are often held under their male relatives’ names. In fact, women only own approximately 1% of registered land titles.


Sharmila Raj Jain, a graduate of Goldman Sachs 10,000 Women business education program in 2009, had to confront many of these issues early on: “The immediate problem is, unless you have collateral, you can't get a loan,” she said. “So initially, my first loan was just a very small working capital loan, which I got with the support of a relative who was willing to guarantee for me. It was a very, very minor amount.”

Sharmila’s packaging business, headquartered in Hyderabad, India, has grown from two to 50 employees and her ability to serve larger international customers has expanded. Still, as her needs for financing have grown, so have the complexity of her dealings with banks: “I was looking at buying the land for a plant, and so I got a loan for that. But then when it came to disbursement of the money, the banker said, ‘Okay, now give us the land papers.’ They thought I was there to mortgage the land, rather than build on it,” she said

“In the end, I asked for an appointment with the bank’s managing director. I said to him, ‘I'm a woman entrepreneur. I'm a small entrepreneur. It's a small business. I have saved up enough to put in my initial advance for this land, but I cannot go further without your support. And if you don't help me, how am I going to grow? You talk about getting more women in business, so what is this about?”

The Women Entrepreneurs Opportunity Facility

In 2014, recognizing that one of the most significant barriers for women entrepreneurs is access to finance, Goldman Sachs 10,000 Women and the International Finance Corporation’s (IFC) program launched a first of its kind finance facility dedicated exclusively to financing women-owned small and medium enterprises in emerging markets.

Designed to enable 100,000 women entrepreneurs to access capital through local banks in emerging markets, the Women Entrepreneurs Opportunity Facility (WEOF) has now successfully catalyzed co-investments totaling nearly $3 billion and has worked with financial institutions in 55 countries to deploy capital through 95 financial institutions. Under this scheme, the IFC extends lines of credit to local banks, which in turn make loans to women entrepreneurs and, in some cases, the IFC also takes a share in the credit risk of women entrepreneur borrowers.

Uchenna and Reem

For Uchenna Ibe in Nigeria, a graduate of 10,000 Women in 2021, banking services that center female entrepreneurs and respond to distinct local market dynamics are crucial: “When I started my interior 

Even among female entrepreneurs who have participated in 10,000 Women, the asymmetries of how banks treat female entrepreneurs can differ vastly. As Uchenna explains: “You see the women in India telling you that they got over $100,000, $200,000, $300,000 for their businesses. And in Nigeria, you may not even get $20,000 for your business. The situation is tough, and the government policies for lending are not as friendly.”

In countries around the world, durable economic stability is not a given, and so flexible banking options become particularly critical.

Reem Fawzy, a graduate of 10,000 Women program in 2011, established Pink Taxi in Egypt in the immediate aftermath of the Arab Spring to match highly trained female drivers with female and child passengers.

As Reem explains, “After the revolution, of course the tourism sector was a very risky sector for the bank to lend into – international travelers stopped coming to Cairo. The bank didn’t give me any loans at all for my new business.” Instead, Reem borrowed against her existing fleet of cars to seed the funds for her new venture.

The Opportunity

At a recent World Bank event on Empowering Women as Entrepreneurs and Leaders in Washington D.C., David Solomon noted the success so far of programs like 10,000 Women, which has now positively impacted more than 200,000 women, but stressed there’s more that can be done: “We all have platforms. We all have resources. We all have things that we can do to try to advance economic participation. I think we all have an obligation to try to find ways to encourage investment and growth.”


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