Gender diagnostic of women SMEs’ access to finance in Côte d’Ivoire

Genesis was commissioned by KfW, the German Development Bank, to conduct a gender diagnostic of women SMEs’ access to finance in Côte d’Ivoire. 

The objective of the study was to support the design and implementation of a guarantee mechanism that would enable women entrepreneurs to access affordable and adequate financing for their businesses. The guarantee mechanism was part of the SGPME, a guarantee fund established by the Ivorian government to encourage SME lending. KfW committed to allocate funding to the SGPME, with a share dedicated to guarantee loans to women SMEs.

To maximise the effectiveness of the guarantee mechanism, the study looked at women SMEs' access to finance from both a demand and supply side perspective. From the demand side, the study sought to determine the size of the addressable market and the potential demand for funding, and to understand the challenges women face in running their businesses and accessing finance. From the supply side, the study sought to understand how financial institutions are financing SMEs, and to what extent they can leverage guarantees to increase lending to women SMEs.

Genesis engaged with 25 women entrepreneurs and 10 financial institutions to solicit their insights and experience. The team provided actionable recommendations to KfW and SGPME around the design and roll-out of the guarantee.

The study took place in a context where access to finance is the biggest challenge for SMEs and where women-owned and managed SMEs are more financially constrained than those of men. Women-led businesses face additional challenges and often fall short in meeting the criteria of financial institutions due to their informal nature, smaller size, sectors of operation or lack of collateral.

Guarantee mechanisms can play a crucial role in supporting women-SMEs by addressing some of the unique challenges and barriers they face in accessing financing. These mechanisms help mitigate the risks that lenders perceive when providing loans to women SMEs, in particular the risk of low collateral. 

Reduced risk for lenders can translate into lower interest rates for borrowers, making financing more affordable for women-led SMEs. 

Guarantees can also qualify borrowers for larger amounts, supporting business growth and expansion. Finally, guarantee mechanisms alleviate collateral requirements for women, who can have restricted ownership rights.