Women-Owned SMEs Are Safer Borrowers Than Peers, Finds IFC

New data released by the International Finance Corporation (IFC) has found that women-owned small and medium-sized enterprises (SMEs) in emerging markets have better loan repayment rates than other SMEs, even though they have been provided with much less finance.

The data comes from nearly a decade of sex-disaggregated information gathered from IFC financial institutions across the globe that has financial operations in the Philippines. The data was compiled in July 2026 using almost 10 years of sex-disaggregated data collected by IFC's financial institutions in its 10-year history of financial operations in the Philippines. The results validate the business rationale for increasing financial intermediation to women entrepreneurs, given that they represent a low-risk borrower group with great growth potential.

Data on 153 financial institutions in 2024 showed that the non-performing loan (NPL) ratio of women-owned SMEs was 3.6 percent, while the overall SME portfolio had an NPL ratio of 3.8 percent. Over the last decade, IFC observed that women entrepreneurs had consistently displayed better repayment rates, making them a safer and appropriate choice of asset class for lenders.

Key Highlights:

• Women-owned SMEs have better loan repayment than overall SMEs
• Women entrepreneurs receive only 19% of SME loan volumes
• Women-focused lending programs drive higher lending growth

Even with this history, women entrepreneurs still have to deal with a lot of problems accessing formal finance. It revealed that in emerging markets, women-owned SMEs make up more than a third of all micro and small and medium-sized enterprises, but only receive 19 percent of the volume of SME loans and 27 percent of all SME loans issued by the financial institutions surveyed.

It is not just the number of loans that are the problem, it is the financing gap. The average loan for women-owned SMEs is 28 percent less than the average SME loan, IFC said. The organization says this is due to several structural issues, such as a lack of collateral, shorter credit history, less digital traceability, legal and policy barriers, and financial products that are not tailored to women entrepreneurs.

The report also pointed out the disparities in access to finance across the regions. In Asia, the SME loan volume owned by women was about one-third of that of all reporting financial institutions. The proportion, however, was significantly lower in the Middle East and Central Asia (9 percent), suggesting that financing opportunities are still not equal for women entrepreneurs in emerging markets.

The results also indicate that financial institutions with a specific strategy for supporting women-owned businesses have better portfolio growth. Of the 51 financial institutions in IFC's Banking on Women program, 75 per cent expanded their number of borrowers who are women-owned SMEs. In contrast, just 48 per cent of institutions with no dedicated strategy saw the same rate of growth.

IFC's Banking on Women initiative has delivered over Ksh1.73 trillion of financing and advisory services to 357 financial institutions in 87 emerging markets since its inception in 2012. The program also facilitates the collection and analysis of sex disaggregated data by financial institutions to help create financial offerings that meet women-led businesses' needs.

As governments and development institutions are further strengthening their support for women entrepreneurs, the report comes on the heels of this. The report follows the escalation of governments and development institutions' support for women entrepreneurs. Treasury Cabinet Secretary John Mbadi reiterated Kenya's commitment to promoting women entrepreneurship, during a women empowerment event in Homa Bay County on 26th June, 2026, under the framework of the Bottom Up Economic Transformation Agenda (BETA).

The Women Enterprise Fund; the National Government Affirmative Action Fund and the Hustler Fund are some of the programs that have received funding under the 2026/27 Budget in Kenya. These programs seek to increase access to low-cost financing, business development, skills development, and market opportunities for women business owners across various industries such as agriculture, trade and services.

The results highlight the value of using sex-disaggregated data to gain deeper insight into the characteristics of female entrepreneurs and to design more appropriate financial products and services, and increase lending to women, who have consistently achieved good repayment rates, according to IFC. The organization is convinced that bridging the financing gap for women entrepreneurs will not only help to increase the financial inclusion but also create significant economic growth in emerging markets.