Applications Invited for UN Women Fund for Women Entrepreneurs

Follow us@ngobox

About the Organization

UN Women, grounded in the vision of equality enshrined in the Charter of the United Nations, works for the elimination of discrimination against women and girls; the empowerment of women; and the achievement of equality between women and men as partners and beneficiaries of development, human rights, humanitarian action and peace and security.

UN Women’s India Country Office, based in New Delhi, India, works to accelerate the advancement of gender equality and the empowerment of women through the strengthening of strategic partnerships, technical and policy advisory services and advocacy with governmental, inter-governmental and civil society partners. In addition, UN Women India is charged with leading and coordinating the UN system’s work on gender equality, including ensuring accountability for results. The Women’s Economic Empowerment (WEE) unit focusses on expanding women’s access to economic opportunities through promotion and their access to decent and safe employment and entrepreneurship opportunities.

About the Grant

Women entrepreneurs face systematic barriers in access to institutional credit and finance to establish, grow and expand their enterprises. On the demand side, persisting gender biases in the Indian funding landscape, making it harder for women to secure credit for their enterprises/ventures.  Despite the substantial financing needs of women owned enterprises formal financial institutions meet only a fraction of this demand. According to 2022 IFC report, Women-owned very small businesses (WVSEs) in India, with an estimated credit demand worth INR 836 billion ($11.4 billion), need the strong support of financial institutions. IFC estimates that almost 60 percent of the credit demand from micro-enterprises and 70 percent of credit demand from small enterprises is currently unmet by formal financial institutions^[i]  largely due to following reasons:

• Some women entrepreneurs sought credit from financial institutions (FIs) but faced rejection.
• Others refrained from applying due to collateral requirements.
• Lack of awareness about loan products, risk aversion, and complicated application procedures deterred some from seeking formal finance.

On supply side, microfinance institutions are often considered a solution for women entrepreneurs due to their smaller enterprise size. However, while the SHG movement has proven to be a robust mechanism to facilitate   financial inclusion, differences in their maturity and capacity have resulted in their uneven access to finance. Despite continued efforts to promote women owned/managed businesses, their risk perception remains high. Perceived risk and bias around higher default by women inhibit financial institutions to lend to women. Most, institutional sources of funds require collateral and given that only 13% of Indian women have property in their name, it becomes difficult to avail of loans that require collateral. Very often, the nature of their business is such that they have little inventory/equipment or other assets in the business that can be mortgaged for loans.

Against this backdrop, UN Women is proposing to create a ‘UN Women Fund for Women Entrepreneurs’ under its Innovation Grant initiative, to enable women from disadvantaged communities’ access affordable /low-cost customizable and regulated credit for increased credit worthiness to access credit from formal financial institutions.

UN Women seeks the services of a civil society organization (CSO) to develop and implement a Peer-to-Peer (P2P) lending model. The objectives are to enable unbanked women’s access to affordable, low-cost, customizable, and regulated credit, and to increase their creditworthiness for formal financial institutions. The project involves:

• Mobilization and identification of women from disadvantaged communities, including first-time borrowers and those seeking credit for business expansion.
• Facilitating  business support and providing financial training, mentoring, and networking opportunities for women entrepreneurs.
• Rewarding on-time repayment and good financial behavior to help women borrowers build a positive credit history.
• Mobilizing socially conscious individuals and institutional investors to multiply UN Women’s grant five-fold to establish the ‘UN Women Fund for Women Entrepreneurs,’ increasing available capital for affordable loans.
• Working closely with UN Women to design a unique, innovative, and gender-responsive financial inclusion model incorporating global best practices.

Expected Result:  At least 2500 women entrepreneurs in rural and semi-urban areas access affordable and regulated credit and become credit worthy for formal financial institutions.

Target group:  Out of the total target of at least 2500 women entrepreneurs

• 50% are first time credit borrowers from disadvantaged communities.
• 50% are those who need credit for expanding their businesses.
• Eligible women entrepreneurs from UN Women’s existing programmes to be prioritized.

Description of Services:

• Component A: Targeted Outreach and Marketing
• Component B: Customized Credit Products
• Component C: Incentive for responsible financial behavior
• Component D: Financial Literacy and Capacity Building
• Component E: Monitoring and Evaluation
• Component F: Investor Engagement

Eligibility

Technical/functional competencies required:

• The proponent civil society organization should have significant expertise and experience of working with rural women especially in livelihoods and have access to mobilized networks/groups of women.
• The civil society organization should have capacity and resources to deliver business development/entrepreneurship trainings to women
• The proponent should work across geographies in India to create community level impact, directly, or through a robust partner network.
• The regulated NBFC-P2P partner licensed by RBI should have the following track record to enable seamless and legitimate formal sector credit:
• Formal lending to the most vulnerable and un/underbanked women.
• Simple Interest rate of not more than 8% p.a.
• Processing Fee of not more than 2% (inclusive of taxes)
• No collateral or security deposit
• No coercive collection of repayments
• No late repayment penalty fee
• No foreclosure penal fee
• Flexible, community centred, credit products
• Lean operating model - digital onboarding, cashless disbursals and repayments
• A public online dashboard to track the progress of the project
• Creation and management of thematic/sector/target group specific funds.

Other competencies, which while not required, can be an asset for the performance of services:

• A wide partner network across India to connect to genuine borrowers with legitimate livelihoods/enterprise support.
• An established women borrower community across sectors such as farming, artisans, nano enterprise and those dominated by women.
• A track record of continuous innovation with a focus on solving the problem of affordable credit.

How to Apply

Submission deadline: 27 September 2024

Call for Proposal-UNW-AP-IND-CFP-2024-04- UN Women Fund for Women Entrepreneurs (Word, 162kb)

For more information please check the Link

Be A Part of Asia’s Largest CSR & Sustainability Forum- India CSR Summit & ESG Forum 2024 | 16th*, 17th & 18th October 2024

Tags Financial Inclusion Rural Development Women Empowerment Others