Closing the gap: Lessons from six years of investing in women
Read Closing the gap: Lessons from six years of investing in women
Worldwide, gender inequality is deeply ingrained in systems and institutions. Women’s economic participation is limited by the discrimination and unequal opportunities they face. Despite progress, the world is not on track to achieve gender equality by 2030. Some nations – including in the regions where we invest – have regressed.
It’s impossible to solve the biggest global development challenges without closing gender gaps. It is not only the right thing to do; promoting gender equality is also a major contributor to our central goal of advancing inclusive economic development.
In the countries where we invest, it’s especially hard for women to take part in their economy. In 2023, women accounted for only 28 per cent of jobs in the formal economy in South Asia, and 46 per cent in sub-Saharan Africa.
At BII, we are committed to making our investments work for women. Whether that’s backing businesses that channel funding to female entrepreneurs, or partnering with companies to improve opportunities for women in their workforce.
When we launched our Gender Finance Strategy in 2018, gender-lens investing was a small and relatively unknown concept. Since then, it has grown rapidly and is now a key part of impact investing. Today, the market size of gender-lens funds is $7.9 billion – up from $1.3 billion in 2017. We’ve seen similar growth in our own portfolio, increasing from £24 million in 2019 to more than £297 million of gender finance commitments in 2023.
Our new report presents BII’s journey as a gender-lens investor. It features examples of businesses we’ve partnered with across our portfolio, our achievements, and the lessons we’ve learned along the way.
Read on to learn more about our approach to investing in women, or you can read the full report here.
£297 million
our gender finance commitments in 2023, up from £24 million in 2019
We’re closing the gaps between men and women in four ways.
1. We’re investing in businesses that support women.
We invest in companies where women are already well-represented as leaders, employees, and customers, and where inclusive policies are already in place. We do this because it’s an effective way of creating more opportunities for women and girls.
One example is our investment in Kashf Foundation, a microfinance institution in Pakistan that offers micro-loans to women-owned businesses. Kashf provides women with the financial support they need to improve their livelihoods by tailoring its services to women entrepreneurs.
When we first invested in 2020, Kashf had 490,000 customers. By the end of 2022, with our investment, Kashf opened 57 new branches and expanded to 639,000 customers. One customer is Sweta, an entrepreneur in Karachi, who took out a Kashf loan to grow her jewellery business. Learn more about Kashf’s work supporting women like Sweta in this video.
In this video, meet Sweta, an entrepreneur based in Karachi, Pakistan. Sweta explains how access to finance is enabling her to grow her jewellery business.
2. We’re partnering with our portfolio to improve gender equality.
We work with companies to launch gender-focused initiatives, like increasing female inclusion in the workforce or tailoring products for women’s needs. When we invest, these businesses might not have strong female representation or a gender focus, so we use our influence to help them become more diverse and inclusive over time.
Since each business is unique, we collaborate with portfolio companies to understand their specific needs. We offer tailored support that gradually improves outcomes for women within the company or its customer base. Below are some examples of what our support looks like, and why it matters:
Women as leaders: Our recent evaluation sought to understand how businesses in our portfolio with female owners and leaders support positive outcomes for women. It found that businesses with gender-diverse leadership show higher standards in gender-smart business practices compared to others. That’s why we’re working with businesses like Sun King, a leading African off-grid solar energy provider, to promote women in leadership roles.
Women in the workforce: We’ve helped increase women’s employment by supporting companies in recruiting and retaining women employees. Our impact has been especially strong in countries with low female labour force participation, like Pakistan, where women make up only 11 per cent of the workforce in the financial services sector. Since 2019 we’ve worked with HBL, Pakistan’s largest private bank, to improve the representation, retention and inclusion of women across their workforce. By 2022, women made up 22 per cent of HBL’s workforce, putting it on track to meet its target of 25 per cent by 2025.
We’re working with businesses like Sun King, a leading African off-grid solar energy provider, to promote women in leadership roles.
Women as customers: The experiences of women as customers will differ widely by sector and geography. That’s why we take a tailored approach to supporting companies to better serve women. One example is our support to Veritas, an Indian non-financial banking company. We helped Veritas to launch a new woman-centred loan product tailored to meet the needs of women entrepreneurs, offering access to loans with flexible interest rates and repayment incentives. Veritas’ women borrower numbers grew by 60 per cent between 2023–2024.
Helping fund managers consider gender in their investment strategies: Across all sectors, we work with fund managers to include gender considerations in their investment approaches. This involves helping managers to identify and invest in gender-smart businesses, and encourage their portfolio companies to increase women’s representation in their workforce or customer base.
Turn to page 12 of our report to find out more
3. We’re prioritising women in our investments.
As well as investing in gender-smart companies, we structure our investments to benefit women, such as using financial incentives to boost female workforce participation. We’ve tested several financing tools to help close gender gaps – with great success so far.
Through our directed lending facilities we have directed $160 million towards women. This includes our directed lending facility with FirstBank Nigeria, which is empowering women like Memunat, a business owner based in Lagos, to grow their businesses. Learn more in the video opposite.
We also take part in risk-sharing and credit guarantee programmes that encourage more lending to women-led and owned businesses. And through gender bonds we’re directing funding to projects that reduce gender inequalities and improve opportunities for women. Gender bonds are a newer financing tool so we’ve produced guidance on creating and issuing gender bonds, with the aim of supporting more gender bonds in the countries where we invest.
Together with FirstBank Nigeria, we’re helping women-owned and led businesses in Nigeria to grow. In this video, business owner and FirstBank customer Memunat Agbonikhena tells us how the bank has helped her to build a thriving business.
4. We’re championing the growth of gender lens investing.
We’re committed to increasing investment in women, but we can’t do it alone. That’s why we partner with industry bodies, organisations and other investors to set standards, create resources and promote gender-focused practices. This helps boost investment into businesses that empower women and girls.
Over the last six years one of our greatest achievements has been the development of the 2X Challenge; a call to action by the development finance institutions of the G7 countries to shift more capital towards investments that empower women. We played a leading role in this initiative, which began with seven DFIs and today has over 150 members, including pension funds and family offices. Since 2018 investors have mobilised more than $33.6 billion for businesses that meet the 2X criteria.
As a gender-lens investor, we aim to share our expertise with other investors and companies to encourage uptake and behaviour change. We’re proud of the training programmes and resources we’ve developed. This includes our free-to-use Gender Toolkit. It combines resources, guidance and templates that focus on gender-smart investing, gender diversity and inclusion.
$33.6 billion
mobilised by the 2X Challenge to advance women’s economic empowerment
Despite the progress highlighted in this report, gender equality has declined in many parts of the world, including in the countries where we invest.
In about half of these countries, less than 40 per cent of women participate in the labour force, with some countries as low as 15 per cent. The pandemic worsened these inequalities. Conflict, insecurity, and climate change further challenge these countries, disproportionately affecting women and girls. This makes addressing the widening gaps that hinder the economic empowerment of women, girls, and other marginalised groups, even more urgent.
As gender-lens investing evolves, our practices must evolve too. We’ve learned a lot over the past six years, and we continue to strengthen our approach.
We know the challenges – and opportunities – ahead are great, and we look towards the future with ambition to further accelerate our impact for women.
