Mauricio Claver-Carone
AS CARIBBEAN countries chart a post-pandemic future, evidence is mounting that one of the surest ways to accelerate growth is to empower women.
Governments are right to help the millions of women laid-off during the pandemic and who require new skills to return to work. But we can also hasten growth by addressing the needs of a small but critical subset of women who've been working the whole time.
That includes women who own or manage about 1.3 million small and midsize companies in Latin America and the Caribbean.
These women run a third of all small businesses in the region, which makes their success key to everyone's future.
Even before the pandemic, these companies faced barriers.
The top hurdle has always been a lack of credit stemming from pervasive gender bias. Studies show that Caribbean women struggle to get commercial bank loans, even though they are more likely than men to repay them.
Financing is particularly critical for women working in technology. Before 2020, the tech sector had been growing quickly in Latin America and the Caribbean.
Last year, a survey of 405 women-led tech start-ups by IDB Lab, the innovation laboratory at the Inter-American Development Bank, showed that over 80 per cent had created their company in the previous five years. Nearly 70 per cent had already hired at least two employees.
Almost two thirds of the women surveyed said trouble getting capital made it hard start and grow their businesses. About 44 per cent relied on financing from 'inner circle' sources like savings, family, or friends. A similar percentage of women got funding from angel investors, venture capital, accelerators or incubators, including those run by governments.
But while the supply of capital from these sources has been rising slowly, it still falls drastically short of demand. In Latin America and the Caribbean, the finance gap for female-led small and midsize companies totals at least $93 billion, according to according to the International Finance Corporation.
The good news is that female Caribbean entrepreneurs have overcome these difficulties with creativity and grit. They are passionate about wooing customers and expanding abroad. They represent precisely the type of job and revenue-generating potential that island economies desperately need.
Helping these women benefits everyone, not just women. The upside to empowering female entrepreneurs, and employing more women overall, is huge. Indeed, achieving gender parity in the workforce alone could increase GDP by 23 per cent, adding more than $1 trillion to economic output by 2025.
Virtually no other public policy offers such a stunning return on investment.
That's why empowering women is key to the region's future. But doing this on a large scale requires a unified effort from the public and private sectors. Happily, recent experience shows there are numerous opportunities to deliver solid results.
One thing governments can do is replicate initiatives like Jamaica's Boosting Innovation, Gro
