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Gender Lens Investing and Closing the Gender Gap in Indonesia

Gender Lens Investing and Closing the Gender Gap in Indonesia

In February 2020, SEAF Vice President Katharina Inkiriwang attended the AVPN Southeast Asia Conference in Bali – “Leveraging the Power of Networks” – which brought together a diverse array of stakeholders. With all conferences canceled for the foreseeable future, we look back at this event and provide some key takeaways from the workshops on gender lens investing (GLI), as well as a look at GLI more generally in Indonesia.

We have to be creative in the structures we are developing to implement gender lens investing across the region

Suzanne Biegel, Founder of Catalyst at Large and the GenderSmart Summit with whom SEAF has collaborated with to develop our Gender Equality Scorecard ©, moderated a panel on “Trends in Impact Investing: Application of Gender Lens.” The discussion revolved around new structures and instruments that could be explored to increase the appetite for GLI from both the funders’ as well as the entrepreneur’s side. Revenue-sharing models, evergreen structures as well as incentive structures were discussed in lieu of the typical instruments that are currently prevalent.

The consensus of the panel was that we are still only at the beginning of what is an exciting opportunity to normalize GLI as an integral part of impact investing and that we need to be as creative and innovative as possible with types of instruments.

During the plenary assembly of the conference on the 13th of February 2020, the Minister of Tourism of Indonesia discussed the importance of private and public partnerships to further advance the impact investing space in the country. And just last year, a Memorandum of Understanding between the Indonesian Creative Economy Agency and AVPN was signed to mobilize different types of social investment capital in various sectors and provide opportunities for capital collaboration.

We should focus on enabling equal outcomes for both men and women by adjusting the investment process to better incorporate the standpoint of the women…

During a panel titled “Impact Investing & Gender Lens Investing,” Asya Troychansky, Senior Gender Advisor and Rebecca Fries, Managing Director and Founder of Value for Women shared an insightful introduction into the space. Asya shared that many times we tend to focus on equal opportunities for both men and women founders without realising that they are coming from very different starting points, thus usually leaving women in an unfavourable position. She, therefore, encouraged investment professionals to focus on enabling equal outcomes for both men and women by adjusting their investment process to better incorporate the standpoint of the women.

One key element in this adjustment process is to be more specific in our questions towards the entrepreneur and in our evaluation of the business and the entrepreneur. Many organisations have a simplified questionnaire in their due diligence process that asks the investment professional about their subjective opinion of the founder. The Value for Women Team suggests that more specific questions will lead to better objectivity in the evaluation process.

There is enormous potential for Gender Lens Investing in Indonesia…

In a commentary piece published earlier this month in the Singapore Business Review, the chairperson of the AVPN, Naina Subberwal Batra, made the case that investing in women is “not just the right thing, but the smart thing.” She referenced that investing in women could contribute significantly to the development of national, regional and global economies, citing a McKinsey report that found “Asia Pacific countries could add US$ 4.5 trillion to their collective GDP annually.”

Batra also referred to the IFC report, “Investing in Women,” to support her argument. The report highlighted an Indonesian Company, ECOM Agroindustrial Corporation, one of the world’s largest coffee traders, that  “boosted productivity by 131% by developing gender-specific training after identifying knowledge gaps between men and women as a key barrier to growth.”

The World Economic Forum’s Global Gender Gap Index has been measuring the extent of gender-based gaps among four key dimensions (Economic Participation and Opportunity, Educational Attainment, Health and Survival, and Political Empowerment) and tracking progress towards closing these gaps over time. While Indonesia retains its 85th position on the Index, the country is reported to have closed 70% of its gender gap since the Index was created in 2006. The economic gap remains large but has narrowed considerably over the past 14 years.

The WEF report states that over the last year, “Indonesia jumped 28 places on the Economic Participation and Opportunity sub-index rankings (68.5%, 68th), constituting one of the most significant improvements on this dimension globally.” Furthermore, Indonesia boasts the world’s largest percentage of senior and leadership roles held by women and is one of only six countries where most of these roles are held by women. However, work still remains as the rate of women participating in the labor force is only 54% and women’s earned income equates to only half of that of men.

Last year, SEAF made its first foray into Indonesia with an investment from the SEAF Women’s Opportunity Fund. The Fund invested in BEAU Bakery, an Indonesian food and beverage company founded by a world-recognized pastry chef and woman entrepreneur, focused primarily on baked products of the finest ingredients to promote quality food. SEAF is aiming to grow the woman-led company while creating quality employment and providing workplace development to its team.

SEAF is excited to be playing a part in closing the gender gaps in Indonesia and across the region. Over the next month, we will be sharing case studies of our various gender lens investments. Stay tuned…