Unlocking potential with We-Finance Codes to transform women entrepreneurs' success

The recent publication of the B20 task force policy papers and recommendation has demonstrated the seriousness of the deep engagement with many of the most challenging economic, political and societal issues not only for the G20 nations, but more generally in both developed and emerging markets.

We have indeed come a long way. At the same time, women are now better equipped to accelerate adoption of specific and well-structured policies that will give tangible effect to more broadly stated intentions and strategies.

There is just such an opportunity in this landmark G20 year for South Africa as we develop and extend the efforts of the working groups and task forces that are bringing substance to high-level diplomatic engagements.

Among the key opportunities for South African leadership has been the work of advancing the economic participation of women, something that has featured among policy recommendations of several task forces.

The role of business in advancing tangible economic participation has been captured under the umbrella of “G20 Empower”. This initiative endeavours to be the most inclusive and action-driven alliance between business and governments for accelerating women's leadership and empowerment across G20 countries.

Building on the impactful legacy of the previous G20 presidencies of Japan, Saudi Arabia, Italy, Indonesia and India, G20 Empower South Africa aims to accelerate women’s inclusion in the private sector through strategic and targeted interventions. The South African delegation, chaired by Nhlanhla Mjoli-Mncube, operates under the theme of “Uhuru: Women Building Sustainable Income and Financial Independence”.

Sustainable change

The G20 Empower Alliance seeks to strengthen a global network of women leaders and promote knowledge exchange through the G20 Empower Best Practice Book and the community of Global Advocates, who are instrumental in driving sustainable change across G20 nations.

I have been privileged to take up the role of lead for the working group on Women’s Leadership in Corporate under the G20 Empower South Africa Alliance and to champion women entrepreneurs who are so central to wider economic growth.

A focus of this alliance’s activities is ramping up our advocacy for adoption across G20 countries of the World Bank’s We-Finance Codes first introduced almost two years ago. These voluntary principles guide financial institutions, regulators and policymakers on how to broaden access to finance for women entrepreneurs at all levels. 

The We-Finance Codes are neither rigid nor overly prescriptive. Rather, they offer a voluntary framework for improving inclusion of women-led businesses by having financial institutions commit to appointing a senior organisational champion, collecting sex-disaggregated data and developing strategies to serve women-led businesses better. 

This initiative matters because it offers a route for business to translate broad commitments into something tangible. Further, accelerating inclusion of women entrepreneurs benefits everyone. Adoption of the We-Finance Codes offer an opportunity to get to a ready-made framework for addressing both opportunities and challenges in broadening and deepening the economic inclusion of women.

The role of women in managing and directing trillions of dollars is also increasing steadily through generational wealth transfer from baby boomers to millennials over the next two decades, significantly increasing the number of women managing personal and family wealth.

The Global Entrepreneurship Monitor report built on data from 30 participating countries notes that women entrepreneurs are now one-third of high-growth entrepreneurs globally, with women leading nearly two-fifths of export-oriented startups.

Women entrepreneurs tend to be younger than men, with more women in the 35-55 age range in low-income countries. Women occupy a growing role in innovation and are breaking into emerging industries, though gaps remain especially in the Information and Communications Technology and agriculture sectors.

Women’s startup activity has risen from 6.1% to 10.4% across 30 countries over the past 25 years, according to the Global Entrepreneurship Monitor report. However, women-led Micro, Small and Medium Enterprises face a $1.7-trillion global financing gap. The We-Finance Codes offer an effective response to this financing gap in a manner that is consistent across G20 countries.

For South Africa’s women, data from the SSE Report and the Global Gender Gap Index of the World Economic Forum show that the country ranks in the top 20% globally for gender representation in leadership (with a score of 0.795), but still lags in economic participation and access to finance. 

However, the companies listed on the Johannesburg Stock Exchange notably stand out — topping African G20 markets with 33% of board seats held by women in the top 100 companies, considerably better than the G20 average of 23%.

Sex-disaggregated data

Adoption of the We-Finance Codes over the past two years has been encouraging: so far 29 countries and over 250 financial services providers have committed to collecting sex-disaggregated data to address the gap.

But much remains to be done. In South Africa we took an important step forward at the end of August at an event to educate about and advocate specifically for adoption of the We-Finance Codes locally. Co-hosted by the Gordon Institute of Business Science, G20 Empower and the W20, the event brought together banks, insurers, financial services providers, policymakers as well as the National Treasury.

The initial interest and responses were most encouraging. G20 Empower hopes that South African firms will soon join the other 250 financial services providers across the G20 committing to the We-Finance Codes. 

Adoption of the We-Finance Codes is both a moral and economic imperative. As we head towards the culmination of this G20 year, now would be an excellent time for South Africa’s financial services sector to step up and sign on. DM

Snowy Masakale is the lead for the Working Group on Women’s Leadership in Corporate under the G20 Empower South Africa Alliance, and executive head of strategy for Sanlam Private Wealth.