Ladies and Gentlemen,
It is a pleasure to be with you today on the occasion of the fifty-ninth session of the Commission on the Status of Women (CSW). I would like to thank H.E. Åsa Regnér for her inspiring key note remarks, and my fellow panelists and distinguished participants for being part of this event.
We are here today to talk about how we can collectively Step It Up to Unlock Domestic Capital for Women’s Economic Empowerment and Entrepreneurship.
We are at a watershed moment with the post-2015 agenda entering its final rounds of negotiation; with the promise of innovation and change at the Financing for Development conference in Addis Ababa in July, and with the UNFCCC Conference of Parties in Paris in November.
Gender equality and women’s empowerment must be at the heart of each of these agendas. In the twenty years since representatives the Fourth World Conference on Women in Beijing crafted the unprecedented Platform for Action, much progress has been made, and many lessons have been learned.
Stepping It Up is not just about doing more of the same; it is about learning from what has been accomplished and what has not, and using that knowledge to develop new ways to accelerate progress for gender equality and women's economic empowerment.
For instance, we know that financial inclusion for women results in increased household welfare and more vibrant local economies. Emerging sex-disaggregated demand-side data on access and use of financial services shows that women on average are less financially included than men, even in countries with relatively high levels of overall financial inclusion. The financial inclusion gender gap is frequently 10% or more. But we also know that the policy and regulatory environment is critical for better financial inclusion, like in South Africa where 9% more women are banked than men and only 11% are excluded compared to 18% of men.
But overall, research shows that women are more reliant on informal mechanisms for their financial requirements, which are more costly, less reliable, and where financial products are least adapted to the real needs of women.
We also know that demand is high for financial services, and that the larger the clientele, the more attractive the market is to investors. So we use smart ODA to “reveal” the market, to help Financial Service providers to develop the business models that will help them meet the real needs of women and men, and through these approaches “crowd in” domestic and south-south capital to scale up and replicate these models, including by connecting with the formal banking sector. By making poor, female clients attractive to investors, we are using ODA to unlock domestic capital – including previously unproductive savings – that can then be directed into financial services that promote local markets, small-holder agriculture, SME/SMI development, education for girls, and so on.
Investment in appropriate, and transformative, local infrastructure is a critical accompaniment to achieving financial inclusion if women are to be able to engage with their local economies. We believe that the two together help turn infrastructure corridors into economic corridors that can benefit women and men equally.
We believe that by mobilizing savings ‘out of the mattresses’ and into the real economy, and by attracting domestic investment dollars out of the capital cities and into the local economic space, and “de-risking” these investment through smart application of grants, loans and credit enhancement, others will gain confidence to invest. Public resources through fiscal transfer systems will never be sufficient to meet all the local infrastructure needs. So through structured project finance for investments in infrastructure such as roads, warehouses, energy generation, value chains, and climate resilience, we can crowd in greater private investment and enterprises by lowering the costs of doing business.
For instance, currently in the Iringa Region of Tanzania, we are supporting female entrepreneurs to introduce a small hydro power plant to generate electricity in the rural areas of Tanzania, helping them to structure a deal that aims to attract approximately one million dollarsin domestic financing from a local bank. The project will generate 317 KW of Hydro Power for rural electrification which will be instrumental in expanding further opportunities for small scale enterprise development and jobs creation including for women.
In UNCDF’s experience, strategically placed ODA to, for example, build sustainable models to distribute fiscal resources more equitably or to expand the distribution systems of financial markets, can leverage domestic resources at ratios of 1:10 or more.
This includes fiscal decentralisation, innovative municipal finance and structured project finance for social and economic impact at the local level. The UNCTAD 2014 LDC report supports the view that investment in social and productive infrastructure at the local level provides the basis for a more equitable growth model.
Overall, relevant studies show that providing access to financial resources and capital for women and gender sensitive investments not only increases inclusive growth but it also helps to reduce income gaps.
Recognizing that a blend of gender-sensitive public and private investment will be required to meet the needs of local development, UNCDF, UNDP and UN Women have designed the Inclusive and Equitable Local Development (IELD) programme, which works in harmony with on-going local development programmes to test ways of unlocking private finance for potentially transformative infrastructure projects that would benefit women.
IELD focuses on gender-sensitive infrastructure projects at the local level such as feeder roads, bridges, micro hydro - that have potential to be significant drivers of women’s economic empowerment. The programme applies a variety of investment modalities including structured project finance, public private partnerships, and Small and Medium Enterprises (SME) cluster finance.
Through the Transformative Impact Financing (TIF) approach, UNCDF puts its local development finance instruments to work to unlock domestic capital for local economic development and entrepreneurship, with a special emphasis on the development impact as a measure for success. The programme will look particularly at the infrastructure investments that confront and address critical barriers to women’s economic inclusion, notably those that produce goods and services that respond to the needs and demands of women.
In closing, let me say that to Step It Up, we need:
Smart and predictable ODA that helps pave the way for domestic capital formation for women’s economic empowerment and entrepreneurship.
We need the full commitment of the international community to keep women at the forefront of the FfD, post-2015, and UNFCCC agendas.
We need to act locally, not just nationally, because it is at the local level that empowerment happens, that economic acceleration happens, that participation happens, and where stepped up capital investment in financial inclusion, local infrastructure, and entrepreneurship can drive changes in the real economy for women.
As the saying goes – “paths are made by walking”. So thank you for being with us this afternoon and for joining our efforts to champion Transformative Impact Financing as an approach to make resources and markets more accessible and equal for women.