When the EBRD set up shop in 1991, female inclusion wasn’t an issue, as during Soviet times, both men and women were expected to work. Plus, in the absence of capital-forming markets, it wasn’t possible to either raise collateral or to start a business.
Yet as the EBRD expands into new countries, notably Middle East and North Africa (MENA), this issue has been revisited internally.
“There are issues of inclusivity within the region,” notes Michaela Bergman, chief social councilor at the EBRD. She says this was “never an issue” pre-2000 but recent years have seen a “rising recognition” internally that something needed to be done.
A recent series of landmark agreements struck between the EBRD and a group of leading Turkish banks highlights this step-change. On Thursday, the multilateral agreed a three-year loan deal to channel €25 million to Isbank, the country’s largest lender: that capital will be channelled directly into small- and medium-sized enterprises (SMEs) run by women.
Similar deals have been struck this year with Yapi Kredi (worth €20 million) and Garanti Bank ($60 million, both loans also with a three-year tenure).
More capital is being set aside to boost female financial inclusivity across struggling MENA states, but also in the likes of Bosnia, Azerbaijan, Tajikistan, Georgia, and Kyrgyzstan.
Each of these markets has its own needs and demands. In Azerbaijan and Tajikistan, social and cultural restrictions bar many women from venturing out alone in public – making it hard for them to visit a bank or potential customers.
Bosnia has a host of complex post-conflict issues, while in large parts of MENA basic issues – like poor education, meaning that many cannot sign their name – hinder female inclusivity.
In Jordan, women traditionally prefer to approach family members for capital: many find the idea of entering a bank a daunting prospect.
This transition, for a multilateral traditionally geared toward funding private-sector investments, hasn’t been sudden. Three changes affected thinking, Bergman said.
First came a series of reports highlighting the issue of broadly waning female inclusivity, and through them a realization that the process of market deregulation was creating “winners and losers” across the region, Berman says. And many of those losing out were women as the loss of, say, state-subsidised child support in countries like Bosnia forced many to stay home after childbirth.
Second was the appointment of Sir Suma Chakrabarti last year: the incoming EBRD president was determined to ensure the multilateral created opportunities for everyone. Then came the deals signed this year with Turkey’s leading banks, a process that will lead to more capital being diverted around the region to support female inclusivity.
The EBRD notes that this isn’t all about money. Capital has helped women like Handan Ilkoz, who runs a construction firm in northwestern Turkey. Ilkoz recently secured a €21,000 loan from Garanti Bank to keep her company afloat.
There are other issues here, says Bergman. The EBRD is promoting the use of low-step buses in the Kyrgyz capital Bishkek – boosting the use of public transport by young mothers.
In other places, inclusivity means installing very simple amenities. “Many bus companies don’t employ women drivers,” notes Bergman, simply because there is nowhere for them to change their clothes in the depot.
Bergman notes that two further issues interlock here: first that SMEs drive the bulk of economic growth in most countries, including those under the EBRD’s purview; second, that “companies run by women tend to employ relatively more women than companies run by men. There is a political and moral imperative to all of this.”
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