November 9, 2020 – Joseph Heim provides an in-depth look at the role Asset Based Lending provides to female entrepreneurs where social norms and laws restrict women’s ability to control property. This article was published by USAID, the world’s premier international development agency.
No Real Estate? No Problem. A Look at the Potential of Asset-Based Lending to Empower Women in Colombia
Around the world, women are unable to access credit. In many countries, social norms and laws restrict women’s ability to control property, so female entrepreneurs are often unable to obtain the real estate needed to satisfy traditional collateral requirements for loans. Asset-based lending (ABL) allows businesses to use their company’s moveable assets — such as equipment, vehicles, livestock, and inventory — as pledged collateral. Recently, INVEST and USAID have been exploring the intersection of ABL and women’s access to finance in Colombia.
By Carolanne Chanik, INVEST Communications Coordinator
The human body needs a variety of macro and micronutrients to thrive. While certain foods, such as chips, French fries, and macaroni and cheese, might prevent hunger, a person whose diet consists of solely these foods will end up malnourished. The body needs a variety of foods — fruits, vegetables, proteins, and more — to survive and flourish.
Like the human body, economies are complex systems, and diversity helps them thrive. Unfortunately, not every business or person has equal opportunity to participate in the economy. Women around the world face visible and invisible barriers when attempting to enter local, national, and global marketplaces.
In many countries, women lack equal access to the credit and capital needed to start and grow their businesses. The credit gap for women is approximately $1.7 trillion globally. In 40 percent of economies, women’s early stage entrepreneurial activity is less than half that of men, and in 61 percent of countries, women cannot run a business in the same way as men, and 81 percent of countries do not prohibit discrimination by creditors on the basis of marital status while 63 percent of countries do not prohibit discrimination by creditors on the basis of sex or gender.