with savings accounts enabled large increases (over 45 percent) in business investment.<sup>39</sup> Offering tailored insurance products can provide better downside protection for female‐owned SMEs.<sup>40</sup>

- **Using innovative credit scoring models that better assess the risk of female borrowers.** Evidence from microfinance and other lending models in developing countries suggests that women are more reliable borrowers than men, but misconceptions exist that can impede access to credit. New credit scoring models, such as those based on psychometric testing, result in significantly fewer rejections of creditworthy would‐be female borrowers than traditional scoring that relies solely on credit history and collateral.<sup>41</sup>

- **Supporting development of viable lenders that can sustainably meet lending needs of borrowers** . The credit market for female‐owned SMEs is relatively untapped and represents a significant opportunity for lenders. Female entrepreneurs account for between 2 and 10 percent of commercial bank finance customers. Coupled with evidence that indicates that women are more creditworthy borrowers than men, this suggests there is significant unmet demand for financing models that would be beneficial for both lenders and female borrowers, and would encourage other lenders to enter the market.<sup>42</sup> Government‐supported programs should aim to become self‐sufficient within a reasonable time period, so lenders do not have to rely indefinitely on government subsidies.

- **Tailoring credit products to the specific needs of female entrepreneurs and local context** . For example, simply providing lower‐than‐market rate credit may not help female entrepreneurs who lack collateral or credit history. In this case, offering products that allow use of non‐traditional assets such as farm equipment or jewelry as collateral may be an option to expand access (see Country Example 3). Governments can also partner with local organizations (such as NGOs), which often have more accurate and comprehensive information on borrowers and market conditions, and can serve as lending partners.

- **Pairing lending with training and advisory services** for female entrepreneurs. A 2015 study in Sub‐Saharan Africa suggests that simply alleviating female entrepreneurs’ credit constraint does not seem to be sufficient to help women grow their businesses, without complementary services.<sup>43</sup> Such services can include both business skills, as well as education on credit and financial services to overcome lack of knowledge that deters women from applying for financing.<sup>44</sup>

# **Country Example 3. Nigeria and Uganda: Targeted credit products, complemented by training, show success in growing female‐owned businesses**<sup>45</sup>

**Program:** In 2006, two large African banks—Access Bank in Nigeria and Development Finance Company of Uganda (DFCU)—partnered with the International Finance Corporation (IFC) to design and launch Women in Business programs in their respective countries. Both banks were interested in serving more female entrepreneurs, but had little experience lending to women borrowers.

> 39 Campos and Gassier, “Gender and Entrepreneurship in Sub‐Saharan Africa.”

> 40 “Giving Credit Where It Is Due: How Closing the Credit Gap for Women‐Owned SMEs Can Drive Global Growth” (Goldman Sachs Global Markets Institute, February 2014).

> 41 “Giving Credit Where It Is Due: How Closing the Credit Gap for Women‐Owned SMEs Can Drive Global Growth.”

> 42 “Giving Credit Where It Is Due: How Closing the Credit Gap for Women‐Owned SMEs Can Drive Global Growth.”

> 43 Campos and Gassier, “Gender and Entrepreneurship in Sub‐Saharan Africa.”

> 44 “Giving Credit Where It Is Due: How Closing the Credit Gap for Women‐Owned SMEs Can Drive Global Growth.”

> 45 “Gender Equality and Development.”

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