The Invisible Ones

These are the stories of Aziza and Madina, small business owners from Central Asia who dream of expanding their enterprises. However, their lack of credit history, collateral, and formal records left them invisible to the financial system. • They don’t have a credit history
• They don’t have collateral
• They are paid primarily in cash
• They lack formal records
They are not alone. Millions of women entrepreneurs worldwide face similar challenges, making them invisible to the financial system. The problem is not with these women but with the financial systems that fail to provide them with access to capital and credit. The solution lies in accelerating financial inclusion and providing businesses with access to credit and capital.

The Challenges

Women entrepreneurs face unique challenges. They are more likely to be self-employed and lack access to formal banking services. They are also more likely to be in debt due to limited access to credit. This can lead to a vicious cycle of debt and limited access to credit, making it even harder for them to expand their businesses. • Lack of access to formal banking services
• High levels of debt due to limited access to credit
• Vicious cycle of debt and limited access to credit
The challenge is not just limited to Central Asia or the developing world. Women entrepreneurs in developed countries face similar challenges.

The Solution

The solution lies in accelerating financial inclusion and providing businesses with access to credit and capital. This can be achieved through innovation, creating a business-friendly environment, and ambition and action.

First: Innovation at Scale

Innovation has evolved in recent years, and it has the potential to break down barriers to credit for underserved entrepreneurs, particularly women-led enterprises. • Alternative credit scoring models
• Digital lending platforms
• Data-driven risk assessment tools
These innovations can leverage transaction data, mobile payments, and non-traditional credit histories to provide access to credit for entrepreneurs who lack traditional credit history. For example, the founder of the first Tajik startup in Central Asia to attract investments from global venture capital heavyweights uses Artificial Intelligence to unlock access to credit.

Second: A Business-Friendly Environment

A business-friendly environment is essential for scaling digital payments and unlocking access to credit for small businesses. • Policymakers who champion the private sector
• Telecom liberalization
• Resilient digital infrastructure
• Strong cybersecurity measures
A business-friendly environment requires policymakers who champion the private sector while protecting consumers, along with telecom liberalization, resilient digital infrastructure, and strong cybersecurity measures. Partial credit guarantees where the government shares the risk with lenders in case of defaults can also unlock riskier lending and empower small businesses.

Third: Ambition and Action

Ambition and action are crucial for creating a successful program. The World Bank Group aims to expand access to capital and digital payments for individuals and SMEs. • Expanding digital payments
• De-risking credit markets
• Building ecosystems for equity financing
• Creating product marketsacross the entire region. The World Bank Group’s ambition is to leverage its funding with private capital to generate up to new or better jobs, including for women, across several countries in the region. The program aims to deploy the full power of its private and public sector solutions to help entrepreneurs like Madina and Aziza expand their businesses.