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13 Mar Catalyzing Capital for Women’s Economic Empowerment Initiatives
Building a Strong Demonstration Effect to Catalyze Capital towards Women Economic Empowerment Initiatives
Gender Financing Gaps
The financing gap to achieve the Sustainable Development Goals (SDGs) in developing countries is estimated to be $2.5 – $3 trillion per year, according to United Nations Development Program’s and UN Women’s ‘Gender Equality as an Accelerator for Achieving the Sustainable Development Goals’ report. While gender equality is a goal in its own right, it also cuts across all 17 SDGs and is reflected in 45 targets and 54 indicators for the Goals.
Furthermore, gender equality can be a catalytic policy intervention that triggers positive multiplier effects across the spectrum of development. Evidence collected shows that gender equality is critical to achieving a wide range of objectives pertaining to sustainable development, from promoting economic growth and labor productivity to reducing poverty and enhancing human capital through health and education, attaining food security, addressing climate change impacts and strengthening resilience to disasters, and ensuring more peaceful and inclusive communities. Based on this evidence, the study argues that accelerating the pace of advancing gender equality in all spheres of society leads to a more rapid increase in progress towards achieving the 2030 Agenda.1
Gender lens investing is still a nascent trend in Southeast Asia. Based on the report “The Landscape of Impact Investing for Southeast Asia”, from 2007 to 2017, five private impact investors, in Indonesia, the Philippines, and Vietnam, have deployed US$40 million in more than 30 deals using an explicit gender lens. While this activity provides a positive effect on the communities in which it is deployed, that effect is minimal and insufficient to create sustainable change, let alone to catalyze the growth in investment needed to stimulate economic and gender development.
Building The Foundation for Women Economic Empowerment
SEAF is a strong proponent of women’s economic empowerment and is leading the way in demonstrating gender lens investing as a viable investment strategy. Through its pilot fund, SEAF Women’s Opportunity Fund (“SWOF”), SEAF invested in six women-owned SMEs in Indonesia, Vietnam and the Philippines, demonstrating effective women economic empowerment programs. (See select SWOF portfolio company summaries below).
One of the biggest lessons learned from SWOF is that investing in women-led or owned businesses is not enough to achieve women’s economic empowerment and gender equality considering women’s different domains. SEAF, therefore, refined its development framework to also take into account women in their various roles as entrepreneurs, leaders, employees, and consumers. This comprehensive strategy is based on the firm conviction that companies with strong internal gender equality and continuous operational improvements are superior business performers, both financially and from a social impact perspective.
Given the positive feedback from its pilot fund, SEAF saw the need to further develop a framework to enlarge the possible gender outcomes and adopted this framework in its new women’s economic empowerment investment programs The development framework applies a broad-based approach to the investment strategy with a purposeful intent to capture more opportunities that could create significant impact on women and their families.
Through its women’s economic empowerment investment programs, SEAF aims to catalyze a wide variety of new investors into the channeling of funds into gender lens investing. In mobilizing such capital, SEAF can demonstrate a strong signal to other fund managers and capital providers of the ability of gender lens investing in businesses that support women to provide appropriate financial returns and create measurable impact, including target impact of women’s economic empowerment through private investments. The establishment and deployment of such women’s economic empowerment investment programs can play an instrumental role in convincing capital providers of the viability of a gender lens focused investment strategy and thesis and thereby lead to other such funds being established worldwide.
SEAF has since partnered with UN ESCAP and the Government of Canada through a grant dedicated to the development of additional Gender Lens investment funds. With the successful implementation of this approach, SEAF believes it can lead the way in creating an equitable ecosystem for female entrepreneurs and professionals. To attract the right partners, SEAF understands the need to showcase a strong business case for most capital providers. Building upon the success of SEAF’s current activities, SEAF’s women’s economic empowerment investment programs will demonstrate the viability of gender lens investing as an investment strategy and convince investors to act on gender-focused mandates.
SWOF Portfolio Company Summaries
Provided below are summaries of two of SWOF’s portfolio companies validating contributions to gender equality and other SDGs as well as positive financial performance.
Ellana Mineral Cosmetics – Manila, Philippines
SWOF’s latest investment is in Ellana Mineral Cosmetics which was founded by Theresa Buenaflor in 2008. Ellana Cosmetics is a leading homegrown mineral cosmetics in the Philippines that formulates and distributes non-toxic, hypoallergenic, and non-comedogenic products specifically catering to the requirements of Filipina and Southeast Asian skin types. Beauty consultants make up more than half of the workforce and the company has adopted distinctive hiring policies and training programs that have made its Beauty Consultants stand out in the retail trade. In addition, the company uses environmentally friendly packaging materials, minimizing the use of plastics and promoting reusable packaging.
Phuong Chau Hospital – Can Tho, Vietnam
SWOF made its first investment in Phuong Chau Hospital, a women-owned obstetrics and gynecology healthcare hospital group in the Mekong Delta region of Vietnam. The founder, an OB/GYN physician, saw the need to establish a facility in this region of 17.5 million people to fill a critical gap for families caused by the lack of local high-quality maternal health services. The majority of the employees in the business are women, and the investment has created impact on (i) providing skilled job opportunities and training programs for women, (ii) providing access to high-quality healthcare services tracking to the global JCI certification standard and (iii) relieving patient demand pressure on the public healthcare delivery system.
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