Women’s World Banking (WWB) is a non-profit institution. It was established in 1979 with the primary goal of supporting women’s participation in business development worldwide. Like the RAFAD Foundation, WWB shares a commitment to development.
The sources describe several important aspects of the WWB experience.
OBJECTIVES AND MISSION #
The WWB has several fundamental objectives:
- Strengthen the economic participation of women entrepreneurs by providing them with services directly or by influencing the practices and policies of governments, banks and the private sector.
- Support local initiatives to enable WWB affiliated organizations to become self-sufficient.
OPERATION AND BANKING RELATIONS #
The WWB operates through a network of over fifty affiliated organizations in forty countries. These affiliates form a network that facilitates access to finance, information, and markets for women micro and small entrepreneurs. Sources describe three main models of WWB banking relationships:
- Subsidiary – Local Banks – Clients: WWB subsidiaries can leverage their successful experience in direct microenterprise lending and their equity to negotiate lines of credit with local banks. They then use these lines to expand their microloan programs. This arrangement aims to meet the needs of key stakeholders in providing financial services to low-income women entrepreneurs.
- Subsidiary – WWB – Local Banks: Experience shows that loan guarantees, through which banks provide loans, work best with small businesses. For microenterprises, WWB loan guarantees are useful because they, along with subsidiaries, provide partial guarantees for bank-subsidiary-client credit lines. It is important to note that the loan guarantee is not a start-up product; subsidiaries must first develop a solid track record. In both cases, WWB subsidiaries seek substantial resources from banks to lend to micro and small businesses.
- Subsidiary – Informal Organizations – Clients: WWB subsidiaries are also beginning to establish themselves as financial intermediaries, lending funds to grassroots organizations, rural banks, and savings groups. Several subsidiaries have access to local and foreign capital and possess financial and technical management capacity. Informal organizations have clients in sectors that have not yet been reached by WWB subsidiaries. By combining these advantages, WWB subsidiaries can reach a greater number of low-income women entrepreneurs.
APPROACH AND METHODOLOGY #
WWB’s approach emphasizes local capacity building and the autonomy of its affiliated organizations. It operates by affiliating its national partners. Its work is not limited to providing financing; it also seeks to influence financial systems to make them more inclusive of women.
EXAMPLES OF SUBSIDIARIES AND THEIR EXPERIENCE #
Several examples of WWB subsidiaries and their experiences are mentioned in the sources:
- Honduran Women’s Development Fund (FHUNDEMU) in Honduras: This WWB affiliate conducts a direct lending program. It built its initial capital with local sources and has access to grants and flexible loans from international development agencies through a special government private sector. FHUNDEMU also capitalizes its loan funds by reinvesting income, such as loan interest and interest earned through its savings mobilization program.
- Experience in Haiti, Uganda, and the Dominican Republic: These three cases, drawn from the WWB experience, illustrate women’s banking initiatives at the national level. The Haitian Women’s Aid Fund (FHAF) began in 1983 with a WWB loan guarantee program, followed by direct lending in 1987. However, an initial guarantee contract was not renewed to allow FHAF to address problems related to the country’s instability and unwise concentration of resources. The Uganda Women’s Finance and Credit Trust, Ltd. (UWFCT) initially lent to various types of women’s businesses but learned from its difficulties and now requires some experience from borrowers. It no longer finances crop production or the rural sector. UWFCT offers loans up to US$4,000, and the average loan is US$475. Clients have no direct contact with banks, but must save with the branch for at least four months before applying for a loan. The UWFCT conducts business visits, assists in preparing loan plans, and requires personal guarantors. Training in business and loan management is required before disbursement.
- WWB Thailand: One of the case studies mentions lessons learned by WWB in Thailand. (However, the specific details of these lessons are not provided in the excerpt.)
ROLE IN LOAN GUARANTEES #
The WWB plays an important role in providing loan guarantees to facilitate access to credit for women entrepreneurs. Its guarantee system operates similarly to that of the RAFAD Foundation, although with some differences in amounts and approaches. The WWB provides guarantees for an amount equivalent to 50% of the local group’s credit request, while the group must raise 25% of the credit itself, and the local WWB branch raises the remaining 25%. The WWB tends to favor a “project” approach for smaller businesses and for larger amounts than RAFAD.
SIMILARITIES WITH RAFAD #
Sources emphasize that WWB and the RAFAD Foundation share a common mission of supporting business creation, particularly for women. Both institutions are non-profit and operate internationally. They also use the guarantee system to facilitate access to credit, albeit with slightly different terms and conditions.
CONCLUSION #
In summary, Women’s World Banking’s experience is characterized by its global network of subsidiaries, its diversified approach to banking relationships, its commitment to local capacity building, and its active role in providing loan guarantees for women entrepreneurs. Concrete examples from its subsidiaries, such as those in Honduras, Haiti, and Uganda, illustrate how WWB adapts its model to local contexts to achieve its goal of increased women’s economic participation.
