Supporting gender-equitable food systems through access to finance for small-and medium-sized companies

Abstract

Small- and medium-sized businesses play essential roles throughout the food systems of low- and middle-income countries, and supporting them to expand and improve their production can help strengthen domestic employment and economic growth and facilitate improved access to safe, nutritious, and affordable food.

One critical aspect to supporting such firms is providing financing to enable them to grow and improve business operations. However, access to such finance among food system firms in lower-income countries tends to be low - particularly for women-owned firms. This is despite a strong economic, social, and commercial case for improving women entrepreneurs’ access to finance. This paper thus reviews prior research on gender and business finance in low- and middle-income countries, with a focus on food system companies where possible.

The review indicates a large gender gap in access to business finance across many world regions, exacerbating the already challenging act of securing financing for a business in the agri-food sector. There are many reasons behind this gap, including both demand-side barriers, such as limited access to collateral and considerable household responsibilities, and supply-side ones, such as biases in how decision-makers evaluate requests for financing and a lack of services designed with female entrepreneurs in mind.

The paper concludes by discussing recommendations for addressing these issues, including the concept of ‘gender lens investing.’