Closing the Gender Finance Gap through the Use of Blended Finance
Women-owned and women-led SMEs (WSMEs) face major barriers to accessing capital, particularly in emerging markets. Blended finance—concessional public or philanthropic funding combined with commercial capital—can help overcome these market failures by de-risking investments in WSMEs through tools like loans, bonds, and equity.
Despite lower default rates among female borrowers, WSMEs face a $1.4–1.7 trillion credit gap and receive only 7% of private equity/venture capital funding. Contributing factors include unconscious bias, lack of collateral, and underrepresentation of women in financial leadership.
Post-acceleration funding gaps persist, with male-led startups raising 2.6 times more equity than female-led ones. Addressing these disparities through gender-smart investment strategies and inclusive networks could significantly boost income, job creation, and productivity. Closing the WSME credit gap alone could increase annual incomes in emerging markets by 12% by 2030.
