Red de Instituciones Financieras de Desarrollo (RFD), a network of 53 banks, cooperatives and nonprofit financial services providers (FSPs) in Ecuador, recently agreed to partner with IDB Invest, a member of the Inter-American Development Bank (IDB) Group, to offer RFD members advisory services relating to boosting their financing of female-led micro-, small and medium-sized enterprises (MSMEs). RFD will distribute an online survey designed by the IDB Group to address gender disparities by measuring: (1) direct and indirect gender biases of FSP staff; (2) the probabilities of employees’ behavior being influenced by those biases; and (3) the opportunity cost of failing to lend to female-led companies equitably, relative to those led by men. Based on these results plus analyses of historical data on credit officers’ loan approvals, IDB Invest and RFD will help FSPs test interventions to reduce gender inequality.
The program is financed by WeForLAC, a fund of the Women Entrepreneurs Finance Initiative (We-Fi) that is focused on Latin America and the Caribbean (LAC). Housed in the offices of the World Bank Group, We-Fi was founded in 2017 to support women entrepreneurs in emerging markets with access to finance, markets, training, mentoring and networking. It also works to reduce legal and regulatory constraints for women in business. We-Fi is funded with USD 354 million from 14 national governments.
Founded in 2000, RFD seeks to alleviate poverty, contribute to economic growth and “reduce the gaps that contribute to the exclusion of large segments of the population.” It does this by providing its members training, technical assistance, access to microinsurance, access to electronic payment clearing systems, and monitoring financial and social performance.
The goal of IDB Invest is to “finance sustainable companies and projects to achieve financial results and maximize economic, social and environmental development” across Latin America and the Caribbean. The institution, which is owned by 48 countries, disbursed USD 1.4 billion during 2022, ending that year with total assets of USD 9.4 billion.
The IDB Group is active in Latin America and the Caribbean. In addition to IDB Invest, it comprises IDB, which provides “financial and technical support for countries working to reduce poverty and inequality,” and the IDB Lab, which tests models for facilitating growth that is inclusive of “vulnerable people affected by economic, social or environmental factors.”
By Renata Samadova, Research Associate
Sources and Additional Resources
IDB Invest press release
https://www.idbinvest.org/en/news-media/idb-invest-and-red-de-instituciones-financieras-de-desarrollo-work-reduce-gender-bias
RFD homepage
https://rfd.org.ec
We-Fi homepage
https://we-fi.org
IDB Invest homepage
https://www.idbinvest.org
IDB Invest Annual Report 2022
https://idbinvest.org/en/publications/idb-invest-annual-report-2022
IDB homepage
https://www.iadb.org
Previous MicroCapital article on IDB Invest
https://www.microcapital.org/microcapital-brief-bim-borrows-20m-from-idb-invest-for-locfund-next-to-support-lenders-to-msmes-in-latin-america-caribbean/
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