Goldman Sachs: Empowering and Enabling Women Entrepreneurs

When it comes to owning business, women have made significant strides in recent decades.

From just 402,000 women-owned companies in 1972, this has grown to 12.3 million businesses in the US today – and worldwide, 43% of entrepreneurs worldwide are women.

Despite such progress, there remains a considerable funding gap, with investment banking giant Goldman Sachs estimating a US$1.5 trillion financing gap for women-owned small businesses globally.

The reality is, more than 70% of women owned SMEs have insufficient or no access to financial services.

Not only are women less likely to have applications for business loans approved, they make up the majority of the unbanked population worldwide, with factors such as socio-economic, employment status and level of education all significant barriers to financial support.

“Women entrepreneurs continue to face unique obstacles that hinder their ability to reach their full potential, including societal biases, lack of role models, and barriers to financing,” says Charlotte Keenan, who serves as Global Head of 10,000 Women at Goldman Sachs and drives the firm’s impact-driven work in India.

Statistics only confirm this reality.

While 20% of India’s businesses are led by women, they contribute just 3% to overall industrial output. They are disproportionately smaller, and unable to grow beyond the micro stage – just 2.7% of medium-sized businesses are women-led.

Access to finance is at the heart of this issue. Women-owned businesses experience a rejection rate for loans that is 2.5 times higher than that of male-owned businesses.

A 2023 study by Goldman Sachs in India found that 40% of women entrepreneurs used bank overdraft, 38% took business loans, and 33% sought capital from friend or family to address their financing requirements.

Unlocking the Potential of Women Entrepreneurs

And yet the case for women entrepreneurs is compelling.

According to the World Bank’s International Finance Corporation (IFC), “women-owned businesses are a powerful source of job creation and economic growth”, says IFC MD Makhtar Diop.

And research has shown that women view entrepreneurship as a route to economic empowerment and improving their lives.

This is especially true in developing countries, where there are now around 8 to 10 million formal SMEs with at least one female owner, World Bank data reveals. 

Which is why Goldman Sachs continues to roll out t its successful women-focused business training programme to developing nations. 

From April 2024, the free online business programme via Coursera will be made available to the more than 60 million French-speaking African women, according to Bloomberg.

Already supporting millions of women around the world, from Liberia to India, the free online programme comprises 10 courses covering the entire business landscape – and is. delivered through a network of 100 academic and non-profit partners, including over 40 of the world’s leading business schools, and across multiple languages including Brazilian Portuguese and Hindi.

The rollout of this course worldwide over the last four years is an extension of a much wider Goldman Sachs initiative for women entrepreneurs known as ‘10,000’ Women.

Goldman Sachs 10,000 Women Supporting 200,000 Women Entrepreneurs

First launched in 2008 as an in-person business education programme, reaching over 10,000 women across 15 growing countries, the global initiative has since expanded.

Not just in reach and numbers, supporting more than 200,000 women entrepreneurs across over 150 countries – but with the roll-out of complementary programmes: the online course, to democratise access to education and a funding programme, to increase access to capital.

Launched a decade ago, as a partnership with the IMF, the Women Entrepreneurs Opportunity Facility (WEOF) is the first finance facility dedicated to female entrepreneurs in emerging markets.

In the last decade, some 164,000 women across 55 countries have received more than 172,000 loans amounting to US$4.5 billion. 

"Through this innovative facility, we've helped tens of thousands of women business owners access capital so that they can grow their businesses, reach their potential and drive economic growth," says Goldman Sachs Chairman and CEO David Solomon.

WEOF-participating financial institutions continue to report healthy growth and strong asset quality in their women-owned SME portfolios. From 2015 through 2021, the average ratio of non-performing loans for women-owned SMEs was just 2.6%, far below that NPL ratio for total SME loans, which was 3% over the same period.

The aim of the facility is two-fold, to empower women through access to capital and expertise and demonstrate the commercial viability of investing in women – how backing women in business can have an outsized impact on the global economy.

And the numbers speak for themselves.

Good for Women, Good for the Global Economy

In India, where more than 38,000 female entrepreneurs have received more than 45,900 loans worth US$720 million through Goldman Sachs’ credit facility, the impact has been far-reaching.

On average within just 30 months of graduating from the programme, participants quadruple their revenue, increase productivity by five times, and double their workforce creating five additional jobs each, according to Goldman Sachs research.

Collectively, that’s 12,000 new jobs and the addition of Rs 28 billion in revenue to the Indian economy within 18 months of graduating.

Moreover, they play a significant role in upskilling talent, explains Keenan, giving back to their local communities, and integrating sustainability into their businesses.

Nine in 10 pay the business support forward by mentoring other women graduates.

These graduate numbers confirm the effectiveness of the 10,000 Women programme in India:

• 32% launch a new product or service
• 45% improve the quality of their existing product or service
• 85% more confident when dealing with diffciult situations
• 67% seen improvement in their ability to negotiate
• 88% able to adapt their business in response to exernal disruption

The success of the 10,000 Women initiative further influenced the creation of Goldman Sachs’ Launch With GS’, a billion-dollar commitment to invest in diverse-led companies and investment managers.

Since 2018, the firm has deployed US$1 billion to women, Black, Latinx and other diverse entrepreneurs and investors and created a global ecosystem supporting early-stage businesses.

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