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A Woman Entrepreneur Gets a Loan, What Happens Next? Track the Impact to Find Out

For most women-led MSMEs simply getting a loan is a struggle. What happens to those that do? Do their businesses grow and create jobs? For banks in the region, capturing information about the impact of these loans can help them better serve women and tap into the growing impact investing market.

Composición fotográfica con la imagen de una emprendedora

In San Salvador, a small businesswoman gets a loan to upgrade the equipment of her manufacturing company. A year later, her firm is more productive and has won a new supply contract from a large local buyer. Her sales are increasing, and she plans to hire two more people.

From the bank’s perspective, she is a good client who makes her payments on time. But there is much more to her story that the bank is missing. She is a woman leading a business that’s growing and creating jobs, thanks to this financing. Why should the bank care about capturing this information?  

Because tracking information on sales growth and job creation can shed light on the deeper impact that access to credit can have for women-owned/led micro, small and medium-sized enterprises (MSMEs).

In turn, this can help financial institutions better understand this overlooked client segment and expand services to millions of women who have the potential to grow their businesses if only they could gain access to credit.


Closing the gap


One-third of MSMEs in Latin America and the Caribbean are owned or led by women who face an estimated $98 billion financing gap, exacerbated by their lack of credit histories and collateral and prevailing cultural norms.  

Capturing and analyzing this impact information can also help financial institutions attract impact investors and tap into the region’s growing thematic bond and sustainability-linked bond market.

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A good starting point is capturing sex-disaggregated data from borrowers about who owns or leads the business, important information that banks in the region don’t always request.

And as shown in a recent IDB Invest report, among those that do capture sex-disaggregated data, many don’t use it to analyze non-performing loan rates or the profitability of their women-led MSME portfolios.

Without clear evidence of how these loans are performing, there’s little incentive to expand access to credit for women. Moreover, very few financial institutions track client data after loans are disbursed, limiting their knowledge of the tangible impact of their financing.



That’s why we’re working with financial institutions in the region to create or strengthen Impact Measurement and Reporting Systems to collect, analyze, and manage impact data from their MSME clients, particularly women-led MSMEs.

We’re focusing on capturing client characteristics when they apply for a loan to better understand the financial inclusion of underserved segments, as well as what happens after loan disbursement. Did the business increase sales, grow, or create jobs?

This information can then feed into the design of new and better products and services for MSMEs, as well as impact reporting for investors and other stakeholders.


Measure, prioritize, implement


With support from the We-Fi initiative, we’re currently working with four financial institutions together with Acrux Partners and Quinto Impacto. To ensure the Impact Measurement and Reporting System is fit-for-purpose, we start with a deep dive to understand the organization’s data collection processes and the characteristics of their clients, products, and services.

Next, to measure the effects of financing on MSMES, the bank prioritizes from a set of standardized social, economic, and environmental impact indicators.

To establish a baseline, the data is collected when the client receives the credit and again 12 or 24 months later. The system ensures that data is collected from clients in a standardized way and allows for easy data visualization through dashboards.

Infographics metrics to follow up after a women-led MSME receives a loan


One of the first financial institutions to implement this system will be Banco Promerica of El Salvador, which plans to launch it soon. There’s also an opportunity to incorporate impact measurement in the financial sector more systemically as we’ve done with the private banks association in Bolivia (ASOBAN is the Spanish acronym). In collaboration with the United Nations Development Programme (UNDP), we designed a system to collect standardized data from all private banks in the country to better capture how the financial system is impacting the Sustainable Development Goals (SDGs).

We’ll continue working along these lines to harness the potential of impact measurement and management both for the region’s financial sector and the women-led businesses that stand to gain.

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Galia Rabchinsky

Galia Rabchinsky is a Development Effectiveness Officer in the Development Effectiveness Division at IDB Invest. She works mostly with Financial Insti

Patricia Yañez-Pagans

Patricia Yañez-Pagans is a Lead Economist in the Development Effectiveness Division (DVF) of IDB Invest, where she oversees the ex-post ev

Flavia Tinelli

Flavia Tinelli is the Impact Director at Acrux Partners, a firm specializing in impact investment in Latin America. She leads all impact assessment an

Agustina Zamprile

Agustina Zamprile is a senior analyst at Acrux Partners, an advisory firm focused on impact investment in Latin America. The firm advises investors, b


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