Lending to women and women-led businesses has always made sense. Data from lenders in developing countries across the world has shown time and again that non-performing loans to women SMEs are consistently lower than in portfolios comprising men and women.
In a similar vein, data from leading listed companies in the US and UK has also demonstrated that a more diverse board will generate better returns for investors. Christine Lagarde, then head of the IMF, famously said, in reference to the Lehman Brothers collapse, that had it been Lehman Sisters, the outcome for the bank would have been different. The firm would most probably have been better run, more conservative in its risk taking and would have avoided massive gambles on products it didn’t understand.
Yet female entrepreneurs face structural and cultural barriers to expanding their businesses. As a result, women accounted for just 33% of the continent’s GDP in 2018 and the African Development Bank estimates the financing gap for women-led businesses at $42bn a year. Closing this gap requires a concerted and deliberate approach, according to Josephine Anan-Ankomah, Ecobank’s Group Executive for Commercial Banking.