In a promising step toward the economic empowerment of women in emerging markets, the Coca-Cola Co. and International Finance Corp. (IFC) on Monday announced a joint initiative that aims to support female entrepreneurship in Eurasia and Africa.
The $100 million, three-year project will provide businesswomen within Coca-Cola’s supply chain with access to critical financial backing. In doing so, the initiative will pool the vast resources and networks of two of the world’s largest corporations. Coca-Cola’s beverage distribution system, which supplies more than 200 countries around the globe, has been held up as a model of efficiency and reach by such luminaries as Melinda Gates, who has urged not-for-profits to take a page from the company’s playbook. Meanwhile, the IFC, a member of the World Bank Group, leveraged more than $20 billion in private-sector investments last year to foster sustainable growth.
The initiative, for which the IFC will utilize its network of local and regional banking institutions to provide financing to women in the Coca-Cola value chain, is already being implemented in Nigeria. There, the two firms are working with Nigerian Bottling Co. and Access Bank to offer financial support to local female microdistributors. In a statement on the joint project, Nathan Kalumbu, the president of Coca-Cola’s Eurasia and Africa group, said: “Women entrepreneurs make significant contributions to emerging and developing economies, yet have lower access to finance than their male counterparts. By providing greater access to capital, we are investing in our own success and the success of the communities we serve.”
Both Coca-Cola and IFC have a long track record of supporting female entrepreneurship. In 2010 Coca-Cola launched the 5by20 Women’s Economic Empowerment Initiative, a worldwide effort to aid 5 million women across the company’s value chain by 2020. The program provides female business partners, from fruit farmers to artisans, access to business skills training, peer support networks, and financial services, to help surmount the barriers to success that women still face in many markets. In November Coca-Cola announced that it was expanding 5by20 beyond its four initial pilot programs to operate in 12 countries, including Brazil, China, Egypt, Kenya, and Thailand.
For its part, IFC runs the Banking on Women program, which works with financial institutions, corporate partners, and local chambers of commerce to serve female-owned businesses. The program focuses on countries that have a strong network of small enterprises and where women entrepreneurs are likely to flourish.
The Coca-Cola and IFC joint initiative comes as more corporations are starting to recognize the power and potential of female entrepreneurs, workers, and consumers. Big multinational companies and investment firms such as Chevron, Goldman Sachs, and Pax World have promoted similar programs aimed at empowering women, recognizing what James Scriven, IFC’s director of financial markets, said in the announcement on the new initiative: “Women entrepreneurs represent significant untapped economic potential in developing countries—they are essential for creating jobs and achieving sustainable growth.”
Indeed, multiple studies have shown that women’s economic success has a direct impact on the prosperity of a country as a whole. A Goldman Sachs study found that if developed countries reduced barriers to female labor-force participation, GDP would increase anywhere from 9 percent (for the U.S.) to 16 percent (for Japan). The FAO has discovered that if female farmers had the same access to resources like land and fertilizers as men do, agricultural output in developing countries could increase by as much as 4 percent. Women control $20 trillion in spending worldwide and are more likely to reinvest their earnings on food, education, and health care for their families. And the World Economic Forum’s Global Gender Gap Report last year noted “a strong correlation between those countries that are most successful at closing the gender gap and those that are most economically competitive.” As Michelle Bachelet, former president of Chile and the current head of U.N. Women, pointed out at a panel last week, “Actions and policies to foster women’s inclusion and equality are also smart business decisions.”
It’s a lesson Coca-Cola and IFC seem to have internalized. Last year, at The Daily Beast’s Women in the World Summit, the Coca-Cola Co.’s chairman and CEO, Muhtar Kent, told the audience that helping women up the economic ladder “makes good business sense”: “If we can empower more women, there would be a huge increase in productivity, and there would be a huge jump in GDP in emerging markets,” Kent said. “This is not the century of the BRICs, but the century of women.”