Bridging the Financing Gap for Women-Led Enterprises in Sri Lanka

In Sri Lanka, micro, small, and medium-sized enterprises (MSMEs) face an estimated $17 billion financing gap. Women-led enterprises comprise a significant proportion of this financing need and face greater barriers in accessing finance. Financial institutions, even when aware of the gender financing gap and wanting to do their part in addressing it, often do not have enough data, market segmentation, or strategic direction to do so. USAID CATALYZE uses Palladium’s Gender Opportunity Assessment (GOA) tool to help financial institutions to better reach and serve women to bridge this gap.

The GOA covers various aspects critical to enhancing the financial institution’s ability to serve women entrepreneurs effectively, including:

• Strategy: Mission alignment, policy implementation, and supply chain considerations.
• Entrepreneurship & Leadership: Promoting women in leadership roles and ensuring equitable recruitment and advancement practices.
• Marketing & Analysis: Conducting market segmentation research and improving client data capture and analysis.
• Services to Women Entrepreneurs: Developing portfolios and services tailored to women MSME and corporate clients, including both financial and non-financial support.
• Services to Retail Clients: Offering services that promote financial empowerment, encompassing credit and non-financial assistance.

In a recent agreement, USAID CATALYZE extended support to Union Bank, enhancing the bank’s efforts to foster its women-focused financial services. Left to right: Asanka Ranhotty, Senior Vice President, SME and Transaction Banking, Thishani Dissanayake, Vice President Marketing and Janaka Edirisinghe, Chief Manager — Development Financing & Business Revival/Rehabilitation of Union Bank with Juan Forero, USAID CATALYZE Sri Lanka Private Sector Development, Activity Team Lead, Delrene Seneviratne, Deputy Team Lead and Inuri Illeperuma, Senior Sector Manager, SME Competitiveness.

Recently, USAID CATALYZE conducted GOAs with three prominent Sri Lankan financial institutions: Union Bank, Citizens Development Business Finance PLC, and Sarvodaya Development Finance. While the customer base, value propositions, and strategies of the FIs differ, initial findings of the GOA demonstrate that each of the financial institutions require support in three common areas:

1. Integrating gender as a central theme into their strategy. This entails aligning their mission, direction, and policies to effectively cater to the needs of women entrepreneurs.
2. Defining a customer value proposition specifically tailored to women, along with corresponding products and non-financial services. This ensures that women entrepreneurs receive the support they require to thrive in the business landscape.
3. Developing staff capacity in gender sensitivity and promoting women’s leadership pathways within financial institutions. This involves practices such as recruiting, advancing, and retaining women in leadership positions.

Moving forward, CATALYZE WBR aims to finalize the assessment results and initiate technical assistance delivery to the financial institutions based on these findings. By providing financial institutions with the appropriate support, CATALYZE is helping to address the financing gap faced by women-led enterprises in Sri Lanka and paving the way for a more inclusive and thriving entrepreneurial ecosystem in the country.