It is becoming clearer and clearer that female entrepreneurs are changing the face of the global economy, helping to both foster and sustain job creation and economic growth. Small and medium size businesses (SMEs) being created by women is on the upswing worldwide. While investors are slow to support female entrepreneurs, the fact is that women represent the largest emerging market. It is estimated that women-owned entities represent over 30 percent of registered businesses worldwide, and growing.

According to the Harvard Business Review, women control about $20 trillion in global consumer spending and it is projected to reach $28 trillion by 2014. Even still, the societal and cultural barriers that women entrepreneurs already face are too often compounded by difficulties in accessing financing. The International Finance Corporation (IFC), a component of the World Bank group is keenly focused on private sector development as a means of lifting people out of poverty, and one of its strategies is a goal of increasing access to money for women entrepreneurs.

Unfavorable business and regulatory environments, biases, and a failure by financial institutions to tailor financial products and services to women entrepreneurs is indeed a missed opportunity which only serves to hamper private sector development. This trend has taken a noticeable shift here in Jamaica.

Two of the largest and most influential local banks have taken note of the power of women in business and created products for this expanding segment.  Both the National Commercial Bank and the Scotiabank have provided facilities where female business owners and budding entrepreneurs can readily access loans through their respective institutions.

Audrey Tugwell Henry, senior General Manager of retail banking NCB.

It is hard to argue the value in doing so as local studies have indicated that women in Jamaica operate over 1700 small business, with less than fifteen employees. A 2005 study however found that most of these businesses were having difficulty transitioning from a micro to medium-sized operation, based on the lack of resources.

Scotibank for its part has dedicated $300 million to this end. The National Commercial Bank Jamaica Ltd (NCB) in March of last year, made available $13 million in sponsorship funding and another $100 million in loan support to developing businesses owned and operated by women in Jamaica. The three-year project is to be funded through NCB’s Small and Medium Enterprise (SME) Unit.

“NCB prides itself on being responsive and relevant to our customers’ needs. Our business is not only about selling financial services, it’s also about growing the financial strength and stability of our customers,” according to Audrey Tugwell Henry, senior General Manager of retail banking.

“We recognize the significant impact that women have on our society, and as more female entrepreneurs emerge in various sectors, we are investing in sustaining the continued financial viability of their businesses,” she added.

Patsy Latchman Atterbury, Vice-President SME operations Scotia Bank Jamaica.

The Scotiabank provision is much more recent, opening on April 1 of this year and runs through to March 31, 2013??. The facility caps individual loans at J$10 million which can be used to fund expansion of their operations. Loans start from as little as J$500,000.

The Scotiabank funds are available at interest rates of 9.95 per cent for secured credit and 11.95 per cent for unsecured loans, which the bank said was a significant reduction from its base lending rate of 15.75 per cent.

“Scotiabank provides loans to all persons and entities which meet the requirements while maintaining our usual application of sound credit standards,” said Patsy Latchman Atterbury, Vice-President of its SME operations. “The needs of this group are similar to that which exists within the wider SME sector in terms of the need for purchase of equipment, financing of inventory and working capital,” she said.

This can be viewed as a step in the right direction because research from the World Bank and United Nations has found that investment in women has a multiplier effect, known as the Girl Effect. Girl Effect research finds that women spend 80% of money earned in the local economy, while men spend 30%. Women spend more of their money on food, healthcare, home improvement, and schooling for their children and families than men. Additionally, it has been found that greater participation by women in the labor force and business sector would raise GDP worldwide, by between 9%-25% in some regions.

These banks, two of the biggest in Jamaica, just may find this a worthwhile investment, not only for themselves and this particular clientele, but for the country on a whole.BM