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20 Oct DFC and SEAF Launch Global Debt Facility to Impact Women Entrepreneurs Affected by COVID-19 Pandemic
Washington, D.C. – October 20, 2020 – The U.S. International Development Finance Corporation (DFC) and SEAF announce the launch of an investment vehicle focused on addressing the devastating effects of COVID-19 on SMEs supporting women through the pandemic. As governments have imposed controls and as shocks in demand and supply chains disrupt markets, women-focused SMEs are most vulnerable due to their more limited access to formal and informal credit. The pandemic has deepened pre-existing inequalities, exposing the vulnerabilities of women entrepreneurs in social, political, and economic systems, which are, in turn, amplifying its impact.
DFC and SEAF developed the SEAF Global Gender Lens Emergency Loan Finance facility (the “C19F”) to provide SMEs supporting women in DFC-eligible countries with the emergency funding and business support to mitigate the impact of COVID-19, thereby enabling these SMEs to survive, regain their footing and continue to deliver their support to their local communities through this global crisis. C19F is a project developed under DFC’s 2X Women’s Initiative, which supports investment in projects owned by, led by, or empowering women across the developing world and that advance the U.S. Government’s Women’s Global Development and Prosperity (W-GDP) Initiative.
C19F will provide financing to SMEs that fall within the 2X Challenge criteria and to entrepreneurs who have committed to implementing the SEAF Gender Equality Scorecard© (seaf.com/gender-equality-scorecard). The C19F is expected to have a highly developmental impact by supporting SME lending during the COVID-19 pandemic, with a focus on 2X qualified SMEs. Project loans are expected to provide primarily working capital to support SMEs in the education, retail, technology, healthcare, and agribusiness sectors. Under the 2X Challenge criteria, the C19Fwill support SMEs that provide women in low- and lower middle-income countries with access to leadership, quality jobs, finance, as well as products or services that specifically or disproportionally benefit women. C19F will make loans of up to $3 million for up to 4 years to finance company expansion, asset acquisition, loan refinancing, and working capital.
“Women are disproportionately impacted by COVID-19, and it has become much more difficult for them to access capital to support their businesses,” said Charity Wallace, Managing Director for Global Women’s Issues at DFC. “The new fund will make a pivotal difference in the ability of women-owned businesses to survive and thrive through the global pandemic and its aftermath.”
“Immediate action is needed to assist entrepreneurs supporting women around the world. COVID-19 is a shock to many businesses placing their immediate future in serious jeopardy as they contend with ensuring the physical and financial wellbeing of their employees and families supported by the income these employees provide, as well as their suppliers and consumers,” stated Jennifer Buckley, SEAF’s Senior Managing Director leading its Women’s Economic Empowerment programs.
“Women entrepreneurs and businesses supporting women’s economic empowerment need help not only to navigate through this crisis but also to be better prepared to take advantage of the recovery. Effective recovery will mean empowering women and addressing gender inequalities due to distinct gender norms relating to their social obligations and responsibilities.”
In addition to making loans from C19F, leveraging its 30 local offices SEAF will coach borrowers using lessons learned across its global platform, including that of its Centers for Entrepreneurship and Executive Development (“CEED”). Much of this coaching will focus on cash preservation, inventory controls, accounts receivable/payables management, banking and supplier relationships, and employee management issues. Unusually for debt facilities, SEAF/CEED will be more hands-on as SEAF will have equity positions invested already or have established relationships with the entrepreneurs. SEAF and CEED’s existing local networks also enable unparalleled feedback from the entrepreneurs and an ability to socialize the C19F and build value chains of trusted entrepreneurs.
Both DFC and SEAF are strongly aligned in their mission to drive women economic empowerment as it serves as a multiplier effect in achieving sustainable development through the equal and gainful participation of women in economic activities, thus accelerating poverty eradication.
DFC is a new U.S. Government agency that modernized the U.S. Government’s development finance capabilities – primarily the Overseas Private Investment Corporation (OPIC) and the Development Credit Authority (DCA) of the United States Agency for International Development (USAID). Equipped with a more than doubled investment cap of $60 billion and new financial tools, DFC has more resources and flexibility to invest in development, advance U.S. foreign policy, and generate returns for the American taxpayer.
SEAF is a global impact private equity manager achieving meaningful and measurable impact results and positive financial returns by providing entrepreneurs in emerging markets with the capital, knowledge, and networks they need to grow their businesses. To date, SEAF has managed more than $1.2 billion of impact capital, investing more than $560 million through 430 impact investments globally. In addition, SEAF has been a leading gender lens investor through over 100 investments in SMEs supporting women, it’s pilot SEAF Women’s Opportunity Fund in Southeast Asia, Gender Equality Scorecard©, collaboration with UNESCAP in South and Southeast Asia, and other gender lens vehicles under development.