Brazilian business women just got a big boost – a half-million dollar one, in fact. IFC, a member of the World Bank Group, announced yesterday an investment in Itau Unibanco to expand financial access for businesses owned by women in Brazil.
Through the deal, IFC will provide US$470 (roughly one million Brazilian reals) in funding, consisting of a US$100 million loan and US$370 million syndicated loan. Participants in the latter include Bank of America, Bank of Tokyo Mitsubishi, National Bank of Abu Dhabi and Development Bank of Japan.
“We very much welcome IFC’s partnership and support to help Itaú Unibanco expand its women owned SMEs base while providing additional long-term capital from important partner financial institutions,” said Cândido Bracher, CEO of Itaú BBA.
This investment comes as part of IFC’s Banking on Women program, which launched in 2010. Its aim is to promote inclusive growth and job creation while at the same time increasing access to education, healthcare and housing by improving credit options for women. To date, IFC has made 20 investments through the initiative, totaling US$165 million, in Eastern Europe, Africa and Asia. This Brazilian investment marks its first operation in Latin America.
IFC is responding to an issue that is critical in Brazil and throughout Latin America. According a World Bank-IFC Enterprise survey, more than 40% of businesses registered in Latin America and the Caribbean are owned by women. However, the credit gap for these women-owned businesses has yet to be closed. In fact, in Brazil, 45% of SMEs owned by women say that access to finance is a major roadblock for their businesses.
”Gender equality is at the center of the development agenda in Brazil, and expanding access to finance for women-owned SMEs, is a critical part of IFCs strategy to expand opportunities and inclusion in the country,” explained Jin-Yong Cai, IFC CEO and EVP. “This partnership will bring IFC’s successful Banking on Women program to Latin American.”
Beyond financing, IFC will also provide consulting services to help in the development of financial products that better fit the needs of businesses built and led by women.
Andrea Pinotti, Director of Itaú Unibanco, highlighted the need to better address women-specific issues. She elaborated, “Women behave, think and act differently than men, so there is a need to consider new ways to serve this important sector. This transaction with IFC is another important step to consolidate Itau Unibanco’s project in providing more access to women entrepreneurs.”
It’s been a good week for women entrepreneurs in Latin America. COMPITE +1000 Mujeres, an initiative to support small businesses owned by women, launched this week in Chile. Moreover, it was also revealed that over 40,000 women applied to Chile’s Capital Abeja program, an initiative to fund women in business.