The Female Entrepreneurship Fund (FEF) has been established as a pioneering investment tool to provide crucial financial support for women entrepreneurs in the Central American Integration System (Sica) region. This initiative, which includes countries such as Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Panama, and the Dominican Republic, aims to address the unique challenges faced by women in accessing finance for their small and medium-sized enterprises.
As a dedicated sub-fund of the Investing for Development Sicav, the FEF has been created in collaboration with the Ministry of Foreign Affairs of Luxembourg, the Center for the Promotion of Small and Medium Sized Enterprises (Cenpromype), Total Impact Capital, and Lux Development. The primary objective of the FEF is to mobilise $40m to support financial institutions that prioritise gender considerations and best practices in the industry, ultimately increasing access to finance for women entrepreneurs in the region.
During the official launch event, Geneviève Hengen, Deputy Director at the Ministry of Foreign Affairs, highlighted the importance of addressing the specific needs of women entrepreneurs. She emphasised that the FEF is more than just a financial instrument, as it has the potential to act as a catalyst for transformative change. By providing women with the necessary resources and support, the FEF aims to contribute towards creating a more inclusive and equitable future for female entrepreneurs in the Sica region.
It is widely recognised that women-led businesses play a crucial role in promoting sustainability and driving economic competitiveness. According to Carmen Niethammer, a Senior Gender Specialist at the European Investment Bank, women-led businesses have been shown to not only be profitable but also tend to invest more in human capital and are more likely to start sustainable businesses. Research has indicated that bridging the gender gap in labour markets could lead to substantial increases in global GDP, highlighting the significant economic contribution of women entrepreneurs.
To ensure the success of the FEF, it will be essential to shift the focus from a mere “gender lens” to a broader perspective of transformation within the business and financial culture. David Cabrera, Executive Director at Cenpromype, stressed the importance of this transformation and outlined five key areas of action to promote gender equality and empowerment within the entrepreneurial ecosystem.
Miguel Herrera, Chief Operating Officer of Total Impact Capital, highlighted the unique features of the FEF, particularly the inclusion of a technical assistance component. This component aims to benefit both women entrepreneurs and financial institutions in the region, ultimately promoting fair and equitable access to financial resources.
In order to measure the success of the FEF, Cabrera noted the need for realistic expectations and highlighted the importance of monitoring the financial inclusion strategy in the region. The FEF is expected to disburse loans to over 1,000 deserving women-led SMEs in the first three to five years, laying the groundwork for a long-term impact on the financial institutions and the overall culture of access to finance in the region.
As gender investing continues to gain momentum, it is crucial to avoid “pinkwashing” investments and instead focus on genuine commitments to gender equality and women’s empowerment. By integrating sustainability criteria, such as climate action and environmental disclosure, with gender equality, investors can contribute to meaningful and impactful change within the entrepreneurial landscape.
In conclusion, the launch of the Female Entrepreneurship Fund represents a significant step towards empowering women entrepreneurs in the Central American region. By addressing the specific challenges faced by women in accessing financial resources, the FEF has the potential to drive transformative change and create a more inclusive and equitable entrepreneurial ecosystem for women in the Sica region.