As Caribbean countries chart a post-pandemic future, evidence is mounting that one of the surest ways to accelerate growth is to empower women.

Governments are right to help the millions of women who were laid off during the pandemic and need new skills to return to work.

But we can also hasten growth by addressing the needs of a small but critical subset of women who have been working the whole time. This includes women who own or manage about 1.3 million small and midsize companies in Latin America and the Caribbean.

Those women run a third of all small businesses in the region, which makes their success key to everyone’s future.

Even before the pandemic these companies faced barriers. The top hurdle has always been a lack of credit stemming from pervasive gender bias. Studies show that Caribbean women struggle to get commercial bank loans, even though they are more likely than men to repay them.

Financing is particularly critical for women working in technology.

Before 2020 the tech sector had been growing quickly in Latin America and the Caribbean. Last year a survey of 405 women-led tech start-ups by IDB Lab, the innovation laboratory at the Inter-American Development Bank (IDB), showed that over 80 per cent had created their company in the previous five years. Nearly 70 per cent had already hired at least two employees.

Almost two-thirds of the women surveyed said trouble getting capital made it hard to start and grow their businesses. About 44 per cent relied on financing from “inner-circle” sources, like savings, family, or friends. A similar percentage of women got funding from angel investors, venture capitals, accelerators, or incubators, including those run by governments.

But, while the supply of capital from these sources has been rising slowly, it still falls drastically short of demand. In Latin America and the Caribbean, the finance gap for female-led small and midsize companies totals at least US$93 billion, according to the International Finance Corporation (IFC).

The good news is that Caribbean women entrepreneurs have overcome these difficulties with creativity and grit. They are passionate about wooing customers and expanding abroad. They represent precisely the type of job and revenue-generating potential that island economies desperately need.

Helping these women benefits everyone, not just women.

The upside to empowering women entrepreneurs and employing more women overall is huge. Indeed, achieving gender parity in the workforce alone could increase gross domestic product (GDP) by 23 per cent, adding more than US$1 trillion to economic output by 2025.

Virtually no other public policy offers such a stunning return on investment.

That’s why empowering women is key to the region’s future. But doing this on a large scale requires a unified effort from the public and private sectors. Happily, recent experience shows there are numerous opportunities to deliver solid results.

One thing governments can do is replicate initiatives like Jamaica’s Boosting Innovation, Growth and Entrepreneurship Ecosystems (BIGEE) Programme, a US$50-million initiative to support small businesses. To provide venture capital and matching grants to start-ups with high growth potential, this programme prioritises women entrepreneurs in the technology sector, offering mentoring, financing, and networking support.

We should also update existing entrepreneurship programmes to better address women’s needs. In The Bahamas, for example, women have accounted for about half of the users of the Government’s Small Business Development Center. Now, in response to surveys indicating that limited access to digital payments and other tech tools is severely impeding growth, the development centre is retooling its digital skills and remote training efforts to focus on women-led businesses. Likewise, Haiti’s Sofihdes, which offers loans and training to small companies, is overhauling its portfolio of courses to specifically meet the needs of women entrepreneurs.

Public and private sector leaders should also encourage well-established companies to promote the professional development and leadership of women in their workforce.

Banco BHD León in the Dominican Republic recently became the first private company in the Caribbean to begin the process of obtaining Edge certification as part of its strategic alliance with IDB Invest, the IDB’s private sector arm. EDGE is a standardised methodology and global certification system for assessing and tracking progress in closing the corporate gender gap. Now is the time for every large company in the Caribbean to make similar commitments.

At the IDB we are expanding financial and technical support for these kinds of efforts as part of Vision 2025, our blueprint for powering a sustainable recovery. By working with the private and public sectors, we can drive exponential growth in women entrepreneurship, thereby creating high-quality jobs that will benefit the Caribbean for decades.

So come and join us. Together, we can make this happen.

Mauricio Claver-Carone is president of the Inter-American Development Bank, the leading source of finance for Latin America and the Caribbean.