Undfounded hero

A start-up like no other. Back Unfounded Ltd and help close the financial gender gap.

The company might not be real, but it has the power to unlock USD330 billion in annual global revenue. It embodies the untapped financial potential that women represent for the global economy.

Women make up half the world’s population, yet female-founded start-ups only get about 3% of global venture dollar volume. 80% of women-owned businesses in the developing world have limited access to finance. If men and women could participate equally as entrepreneurs, global GDP could rise by approximately 3% to 6%.

With less than 10 years left to reach the Sustainable Development Goals by 2030, it’s time to step up the focus on gender equality and financial inclusion as a driver for positive change for women as well as for entire economies.

Join us in closing the finance gap for women.

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The financial potential

Women represent half the population, yet women-led enterprises is an investment theme that is largely unexplored.

If men and women could participate equally as entrepreneurs, global GDP could rise by approximately 3% to 6%, boosting the global economy by USD2.5 trillion to USD5 trillion, according to an analysis by Boston Consulting Group (BCG).

Closing the financial gender gap could unlock USD330 billion in annual global revenue.

A high value investment

Women and women-owned companies display a range of appealing financial characteristics compared to male equivalents with higher returns, lower risks and greater financial productivity.

80 percent of women owned businesses with credit needs are either unserved or underserved. As a result, the financing gap – the difference between funding available and funding needed – is at an estimated USD1.7 trillion in emerging and frontier markets. In terms of revenues, an annual USD330 billion in turnover is not materialized due to this finance gap.

80% of women-owned businesses in the developing world have either unserved or under-served credit needs.

Why fund women-owned businesses?

Unlocking the potential of women-owned businesses represents a significant opportunity for economic growth.

In emerging markets alone, there are close to 162 million formal Micro and Small & Medium sized enterprises (MSMEs), driving economic growth, employment, and innovation. 28 percent of these are women-owned – around 45 million enterprises. MSMEs do not only represent a significant part of the world economy, they’re also one of the strongest drivers of economic development, innovation and employment.

At the same time, women outpace men in saving and repaying loans and, as calculated risk-takers, represent a lower risk compared to men making them sustainable clients. Data from banks serving 22 million customers in 18 countries show that:

  • Women outpace men in overall growth in volume of credit (15% vs. 10%) and volume of deposits (17% vs. 14%)

  • Women are strong savers, with lower loan-to-deposit ratios than men (66% vs. 115%)

  • Women are prudent borrowers, with lower nonperforming loans than men (2.9% vs. 4.2%)

  • Companies that do well in the women’s market also do better for investors (5.9%Internal Rate of Return (IRR) vs. 1.6% IRR)

Women-owned companies perform better on average than those with all male founders. According to Boston Consulting Group, start-ups founded and co-founded by women perform better over time and generate 10% more in cumulative revenue over a five-year period.

“In terms of how effectively companies turn a dollar of investment into a dollar of revenue, startups founded and cofounded by women are significantly better financial investments. For every dollar of funding, these startups generated 78 cents, while male-founded startups generated less than half of that — just 31 cents."

Boston Consulting Group "Why women-owned start-ups are a better bet".

The business case

Unfounded Ltd is an investment opportunity that:

  • Focuses on a global, largely unexplored market with significant potential for economic growth

  • Has higher returns – 4.3 percentage points higher internal rate of return

  • Comes with a lower risks – 31% less risk than comparable investments

  • Offers better financial efficiency – 47 cents more generated for every one dollar invested

  • Is under-financed by USD1.7 trillion

  • Has profound social and societal impact

  • Will help fulfill a number of the UN Sustainable Development Goals by 2030 – by promoting equality, education and human rights

  • Can potentially create an annual revenue of USD330 billion


The barriers for growth

A lack of access to financial services is one of the main barriers for women entrepreneurs in the developing world today - limiting women from participating as equals with men in society.

A lot of the financial freedom that people in developed countries take for granted is not accessible for those women due to a number of factors.

35% of women globally do not have a bank account.

Globally, 35 percent of women – or 980 million – do not have a bank account. In the developing countries this figure increases to 41 percent of women compared to 33 percent of men.

In some areas in the world, it is common that women do not even have access to their own bank account, mobile phone or let alone the internet. In the world’s poorest communities, girls and women bear the brunt of poverty. In many countries, laws, political systems and social norms disadvantage women, for example by prohibiting property ownership.

Men dominate the financial sector and traditionally, financial products and services have been designed by and for men. Women continually feel exasperated by the way financial companies serve them, citing disrespect, poor advice, contradictory policies, and seemingly endless red tape and one-size-fits-all forms.

Empowering women to create income for themselves and grow their ideas into businesses is key to lift communities and countries from poverty and create equal opportunities. It addresses a number of important steps in fulfilling the Sustainable Development Goals for 2030 set out by the United Nations and could have a deep social and societal impact.


Stories of change

Since 2014, and together with CARE, H&M Foundation supports women living in low-income communities to set up and run their own businesses by providing training, skills development and funding.

203% average rate of increase in income for women in CARE's Burundi projects.

Investing in women entrepreneurs is a triple opportunity: there is a business case for financial institutions; it improves the enterprises and lives of women; and the domino effect of equality will be felt in their communities and beyond.

The joint work of CARE and H&M Foundation supports women living in low-income communities to set up and run their own businesses by providing support including training, skills development and funding. This encourages women to believe in themselves so they can move from survival to success.

In total, 167,500 women have been reached so far, through our joint global work. A few highlights since 2014:

  • In Burundi, all 10,000 women increased their income by an average rate of 203%.

  • In Guatemala, of the 1,006 women 55% were able to increase their production volume and their income.

  • In Burundi, CARE facilitated a link with Kenyan Central Bank so that 50 women could take out loans under favourable and secure conditions.

  • Between 2015-2018 the programme’s work in Ethiopia focused on women living in the slums of Addis Abeba. The project supported 5,000 women who stated that they have increased their income by 500%. Approximately 70% of the target group did not have any savings in the beginning of the project – this number was reduced to 3.6% in 2018.

Phase Two of the Women in Enterprise programme runs from 2017-2022 and will reach 100,000 women from low-income communities in seven countries.

Learn more about our work


The impact of Villages Savings and Loans Associations (VSLA)

In 1991, CARE harnessed the ancient practice of group savings in a new concept called the Village Savings & Loans Associations (VSLA).

CARE´s model helps women work with what they have – and directly reap the benefits of their lending. Without outside capital, the VSLAs were introduced as a tool to bring financial services to rural areas of low- income countries, where access to formal financial services is typically very limited. In effect, the women become their own investors, their own bankers.

A VSLA is a self-managed group of 20-30 members that meets two to four times a month, providing members with a safe place to save their money, to access loans and to obtain emergency insurance.

80% of women-owned businesses in the developing world have limited access to finance.

Some examples of impact:

  • As of July 2018, CARE has directly supported 7.6 million members across 51 countries to join VSLAs.

  • Nearly 1 million members in a dozen countries opened their first bank account.

  • In Tanzania, VSLA members achieved a 59 percent increase in their cassava yields and a 73 percent increase in their sesame production, leading women’s annual income to jump by 30 percent.

  • More than 300,000 young people, many of them adolescent girls or young women, have joined VSLAs. In Burundi, this newfound power has helped reduce child marriage.

  • By joining forces, members have used VSLAs as a platform for social justice and political empowerment. In Niger, half of the women in public office in the areas where CARE works have taken part in CARE programs.

  • Today, more than 74 programmes in 20 countries across sub-Saharan Africa cite VSLAs as a vital component of national plans to achieve financial inclusion.