Challenges

Women and girls in Senegal face barriers in the supply of and in their demand for financial products and services, the wider enabling environment as well as in their socio-cultural context. On the supply side, the low number of financial access points disproportionately affects women. This is in a context where women and girls’ mobility is constrained due to socio-cultural norms, whereby they undertake the majority of unpaid care responsibilities in the household and may face restrictions in leaving the house without a male relatives’ permission. While mobile money could overcome these mobility and access point constraints, barriers remain related to access to a mobile device, and knowledge of mobile money accounts. Further, low literacy rates among women, (43.8 per cent) hamper their digital literacy skills.1 

In terms of the enabling environment, social norms related to inheritance and land and property ownership result in the majority of women in Senegal, 85 per cent (aged 15-49), not owning a house or land that could be used as collateral to access credit. For example, in the agricultural sector, women account for 70 per cent of the labour force, but they hold only 3 per cent of cultivated land. Consequently, women resort to informal mechanisms for credit access and savings, which lack any form of consumer protection.

Toward a Solution

Aiming to help overcome the constraints women face in their economic activities, the United Nations Capital Development Fund (UNCDF) – with its capital mandate – has designed a joint programme with the Sovereign Fund of Senegal (FONSIS). UNCDF is assisting FONSIS in structuring, creating and managing an independent financial vehicle in the form of a capital investment fund called Women’s Economic Empowerment Fund or We!Fund.  

The Fund invests in gender-sensitive SMEs and PPPs in the missing middle by providing equity and subordinated loans. Through this innovative approach, UNCDF is unlocking national public and private capital for women’s economic empowerment (WEE) and helping FONSIS build its capacity for gender-sensitive investment and impact measurement based on internationally recognized monitoring systems. To qualify for funding from the We!Fund, enterprises are assessed via UNCDF’s WEE Index3, which measures to what extent the company impacts gender equality. 

We!Fund has a pipeline of around $10 million. It made its first investment with leverage of x2 at project level, leveraging UNCDF investment x6. The Fund made its first investment in May 2021 in PATRIA/Mburu, an innovative bread manufacturing and retail chain, which makes bread and pastry from local cereal and fruits. Based on data updated in November 2020, the WEE Index score was 0.93/1 for this project, due in particular to the 96 per cent feminization rate within PATRIA and 100 per cent within the Mburu Network. As for the managerial staff, it is 100 per cent female for the entire project. The total investment made was $0.45 million in equity and shareholder loan. Around half of the investment is from the We!Fund and the other half is from Women’s Investment Club (WIC) Capital, which is the first investment fund that targets women-led companies in Francophone West Africa.  In addition, UNCDF continues to support Mburu and enables it to share its experience in a spirit of South-South cooperation. A UNCDF delegation accompanied the founder of Mburu, to a forum in Bamako, Mali on women’s entrepreneurship in the agri-food sector in the Sahel to share the good practices of this project with entrepreneurs in different countries to access financing. The forum concerned the entire West and Central African zone, and the funds and banks of other countries were able to see the success of Senegal, which opens the way to replication in other countries and South-South Cooperation. UNCDF wishes to promote this logic of South-South experience sharing between entrepreneurs as an accelerator of local development.  

Reducing gender inequalities in Senegal requires alleviating the barriers women face in workforce participation and access to finance. Locally driven gender-intentional investment funds are a potent means to these dual goals because they channel capital to the most impactful and viable businesses responding to women’s needs. UNCDF’s partnership with FONSIS on the We!Fund provides an example of how investment and technical assistance improve women’s economic empowerment. Working with local governments and government entities, and within existing mechanisms to develop a dedicated fund that invests with a gender lens creates meaningful impact within and across the country. These funds invest in projects and organizations with women at the centre to support job creation, access to finance to start or grow businesses, better working conditions, overcoming food security, improved sanitation, jobs and skills training and other country-specific needs. National governments and development banks have an important role to play in bringing about gender inclusivity in breaking down stereotypes, cultural bias and providing opportunities to create real economic empowerment for women in the local context. 

Investments and projects are expected to result in 1,250 new full- and part-time jobs. The gender responsiveness criteria ensures that the employment opportunities created meet the needs of women in terms of policies, such as maternal leave, harassment prevention and practices related to hiring and career development. 

Through this work on women’s empowerment and economic development, UNCDF has contributed to the domestic financial sector, raised awareness of SDGs 1, 8, 9, 17 and more specifically 5 and IPoA Priority Areas 5 & 7. Implementation of this programme was challenged by difficulty in developing a pipeline that met gender impact and financial criteria to qualify for funding. It took one year to find potential investments, assess them, and start the investment process. The current challenge is to find additional funding to ensure long-term sustainability and impact. UNCDF is addressing the long-term financing challenge by developing a resource mobilization strategy to capitalize the fund.