Banking on Women in Egypt

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Empowering women entrepreneurs is good for development and business. Tune in to World Bank Live on October 11, 2012 10:30 a.m JST. to hear Liberia President Ellen Johnson-Sirleaf and World Bank Group President Jim Kim talk #womenbiz at this year's Annual Meetings.

Research has shown that gender equality makes good business sense, and is key to promoting economic growth. But women continue to be excluded from the economic sphere. This is certainly the case in Egypt, which could use an economic boost in a time of transition—especially as millions of famAccess to finance is changing lives of Egyptian women, and their families for the better. (Credit: World Bank)ilies that rely on the slumping tourism industry are having trouble making ends meet.
Indeed, our research has found that would-be Egyptian women entrepreneurs face many obstacles.  For one, being approved for financing can be a challenge for Egyptian women entrepreneurs. Businesswomen in Egypt are also disadvantaged when it comes to the cost of finance. Banks have stricter collateral requirements for loans to women entrepreneurs, which are perceived as higher-risk. Providing collateral is also an obstacle for many women who are under the guardianship of male relatives and unable to independently manage their assets.

As a result, women’s access to finance is very limited in Egypt. Women account for only 10 to 25 percent of bank borrowers, and the majority of them are microfinance clients. In fact, only 20 percent of women entrepreneurs rely on commercial banks for credit.

So in our work, we are constantly asking ourselves--how do we begin to level the playing field? Giving women greater access to finance is one of the routes we’re taking at the World Bank, in order to unlock more economic opportunities for women.

The World Bank’s Enhancing Access to Finance for Micro and Small Enterprises Project has given women the opportunity to pursue their entrepreneurial dreams with a $300 million line of credit that lends to micro and small enterprises, especially those that are run by women in poor villages. Currently, the program is being expanded to include a new product line for loans around the sectors of poultry, livestock and handicrafts—which are popular and potentially sustainable home-grown enterprises. Given the context, we’re also taking care to customize products to the local culture—a Shar’iah-compliant lending product, which women in rural areas have been asking for, is in the works.

We’re happy to report that our work to level the playing field seems to be paying off.  With their microloans, our women clients have been able to open small grocery stores and sewing businesses that are sustainable and profitable. Even with only half the loans disbursed so far, over 15,000 women have already become empowered entrepreneurs in Alexandria, Upper Egypt and beyond.

Indeed, the benefits are many, and they have the potential to spillover beyond individual families. We’ve found that for our clients, access to finance has not only brought economic independence. It has also empowered them to take control in other areas of their lives and improve the welfare of their families. We’ve seen that women entrepreneurs have begun to make their voices heard in family spending decisions, choosing to spend on healthcare and their children’s education.  They are also taking a more active role in their communities and providing jobs to others. Indeed, our experience in Egypt has shown that when you bank on women—and give them access to finance—the returns can be immense. And I’m willing to bet that expanding economic opportunities for women makes good business sense, not just in Egypt but for women around the world.



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