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(E) Identifying Women-Owned/Led Businesses Within Bank MIS

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Problem Statement Information

Category
Core banking, Process/Workflow Automation, Consumer Finance, Retail/Consumer Banking, SME Finance

Problem statement tags
2021alliancehack alliancehack data datascience sexdisaggregateddata definition systemintegration womeninbusinessdefinition aggregateddata managementreportingsystems reportingsystems banking womensmes

Detailed Description

Closing the finance gap to women-owned/led businesses starts with financial services providers (FSPs) being able to identify them within their existing customer base. This is due to a variety of reasons including: a) a lack of data availability due to inadequate MIS systems and/or lack of alternative data; b) inaccurate or questionable data quality such as a lack of consistent definitions, inability to tag WSME within a business portfolio and changes in shareholder and management structures; c) the fact that sex-disaggregated data is not being used or analyzed to its full potential nor is it included in regular management reporting.
Create a solution that helps banks identify, track, analyze, and report women-owned/led businesses within FSPs portfolios. (B2B, B2B2C)


Identifying women-owned/led very small businesses, often semi-formal (WVSEs) and women-owned/led small businesses that are formal (WSMEs) is a challenge for FSPs. This is due to a variety of reasons. First, FSPs systems are not set up to capture and/or aggregate sex-disaggregated data, particularly for WSMEs and WVSE. Many FSPs MIS are inadequate or based on legacy systems that are not easily changed, and many core banking systems cannot integrate alternative data. Second, while sex-disaggregated may be available, the data may be inaccurate. One driver is that some banks may not be setting consistent definitions of what a WVSE/WSME are in order to tag them. Many women who are actually small business owners remain in the consumer banking portfolio, as it is difficult for banks to determine the purpose for which their account is actually being used, and any changes in shareholding and management can be burdensome to keep up to date. Finally, although data may be available, many FSPs are not using it or analyzing it to its full potential. Aggregating the data can be cumbersome, and due to a lack of automation in extracting sex-disaggregated data, it is not done on a consistent basis, nor is it complete. This leads to WVSE/WSME data not being included in regular management reporting.

The situation is compounded by the lack of universal definitions of women-owned/led businesses, but the IFC definition is a useful benchmark: >51 percent female ownership or >20 percent female ownership and 1 woman CEO/COO, and >30 percent female board, if a board exists. Further, existing reporting requirements by funders, investors, regulators, or other stakeholders can vary, and because there is no universal definition for WSMES, nor are there consistent indicators being used, reporting requirements vary and can be onerous.

for more insights on this challenge read the report:  "A Data-Driven Path to Women's Financial Inclusion | Financial Alliance for Women"

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