World loses by not tapping women's potential
Caroline Anstey says underinvesting in the vast, untapped potential of women is a major impediment to global economic development
These statistics may surprise you. On average, only between 5 per cent and 10 per cent of women-owned businesses in the developing world have access to commercial bank loans, and women-owned businesses account for only 3 per cent of venture capital investments globally.
Those statistics should surprise you - as today women are the new emerging market. Global consumer spending by women is projected at US$28trillion in 2014, up from US$20trillion in 2009. And the growth of women-owned businesses is one of the most profound changes in the business world.
Women today make up nearly half of the world's population, yet only 41 per cent of the formal labour market. And there are many more women than men in non-wage work in low- and lower-middle-income countries. These statistics alone highlight women's vast untapped economic potential. When women's labour is underutilised - because they face discrimination in the markets or in societies - effectively preventing them from completing an education or gaining a certain job, the result will be economic loss.
As the World Bank's 2012 World Development Report demonstrates, gender equality matters for development. It's not only the right thing to do, it's also the smart thing to do, because gender equality is smart economics.
Underinvesting in women not only limits economic and social development, but puts a brake on reducing poverty. When women farmers lack security of tenure over land, especially in Africa, the result is lower access to credit and lower yields.
Seeds and fertiliser in the hands of a woman can boost crops. Cash in the hands of a woman can increase twentyfold the chance of her child's survival.
And a business in the hands of a woman can thrive. In America today, women-owned firms are growing at twice the rate of all other enterprises , contributing nearly US$3 trillion to the US economy and are directly responsible for 23 million jobs.
So why is there this vast untapped economic and productive potential? Worldwide, education levels of women have risen. It is barriers like legislation, cultural restrictions, informal work and limited access to finance that hold women back. In some economies where husbands have sole administrative rights over marital property, married women can't use the property as collateral for a loan without their husbands' permission.
Our "Report on Women Business and the Law" surveyed 141 economies to look more broadly at those barriers to gender equality. In 102 out of those economies, there is at least one legal difference that can hinder women's economic opportunities. That's a pretty large indictment.
When it comes to giving women entrepreneurs the chance to expand their business and boost growth and jobs, today too many banks remain oblivious. We estimate that women-owned businesses in emerging markets have unmet financial needs close to US$300 billion every year.
With the global economy volatile and uncertain, the world can ill-afford to overlook the benefits of full and productive employment for women.
Caroline Anstey is managing director of the World Bank. This article is part of a series on women and gender issues, developed in collaboration with The Women's Foundation