Women-led businesses are an important vehicle for enhancing women’s economic opportunities and agency, and often lead to poverty reduction and economic growth.

Gender gaps in access to formal credit is one of the principal barriers impeding women-led businesses from exploiting their full potential and economic opportunities. There are many structural barriers holding women back from accessing the resources needed to grow their businesses. However, one less explored (and more difficult to assess) challenge in emerging markets is that of hidden gender and ethnic biases in the financial system.

This report, designed for international development organizations, governments, and financial institutions, does the following:

1) highlights the key barriers facing women-led small enterprises across the developing world;

2) identifies how hidden gender and ethnic biases impact the growth of women-led businesses;

3) presents the results of a pilot case study in Guatemala inspired by a novel methodology, first applied to mortgage lending in the United States, that seeks to test for bias in bank-lending decisions for small enterprises; and

4) provides recommendations for policymakers and financial institutions on how this methodology can be applied in developing countries.