IFC, a member of the World Bank Group, and Garanti Bank Romania, one of the most dynamic financial institutions on the local market and the only bank in Romania to have signed gender finance agreements with IFC, have developed a joint report, entitled “Taking Women Entrepreneurs to the Bank in Romania”.
Three years in the making and officially launched in February, the report focuses on the impact of Garanti Bank’s Women SME Banking Program and the successful collaboration between the two institutions in the past 7 years. The report adds to the “Garanti Bank Romania – Striving to Lead” publication, which was launched in 2016 and studied the impact of Garanti Bank’s female SME customers on the bank’s portfolio growth and quality.
Between 2011 and 2017, Garanti Bank had granted over EUR 145 million to women-owned enterprises. According to the recently launched report, 31% of this amount was granted by Garanti Bank Romania to women SMEs, through IFC facilities. These companies subsequently reported an average real sales growth of over 5.5% per year (higher than the national average annual real sales growth of 3.5 percent for all firms in Romania), and a 9.1% labor productivity growth. Around two thirds of Garanti Bank clients reported that the financial services they received from Garanti Bank have contributed to an increase in their sales, net profit, and working capital. Over 84% of Garanti Bank’s female clients are very likely to recommend the products they have received from Garanti Bank, more so than clients of other banks.
“We have been an active and outspoken supporter of entrepreneurship in general, and of women entrepreneurs, in particular. After an ongoing partnership with IFC, currently exceeding 7 years, we have amounted significant experience and expertise in terms of gender finance and the importance of women entrepreneurship. This new report highlights how women have a significant contribution in all areas of the economy and how they have proven to thrive provided the right support. This new report’s findings are a recognition of our efficient business strategy, our successful collaboration with IFC as well as our long-term commitment to the Romanian business community”, said Ufuk Tandoğan, CEO Garanti Group Romania.
IFC has been working with Garanti Group Romania institutions to reduce the finance gap for women entrepreneurs in the country. In the past seven years, IFC has signed seven loan agreements with Garanti Group Romania, totaling EUR 157 million, four of these loans having had a strong gender component. Most recently, Garanti Bank Romania and Garanti Leasing Romania have signed two lending agreements with IFC, amounting to EUR 32 million, with the purpose of financing Romanian small and medium sized businesses, half of the amount being dedicated for lending to companies owned or managed by women.
“IFC aims to increase women’s economic participation by enhancing their access to finance,” said Wiebke Schloemer, IFC Director Europe and Central Asia. “Women-owned smaller businesses are already becoming a force to be reckoned in Romania and they can further realize their economic potential through better access to finance, as this study highlights.”
New report evidences—through robust databased analysis—the business benefits to banks and the impact on women-led SMEs of increasing access to finance for female entrepreneurs. Ultimately, the objective of this study is to promote the development impact of target financing solutions on women entrepreneurs with development organizations, financial institutions, and donors.
Although progress has been made in the recent years, there is still a lot of untapped potential for employment and economic growth that can be harnessed by strengthening women’s participation in the Romanian private sector. IFC remains committed to supporting women entrepreneurs and Romania’s private sector in general.