Investing in Women, an initiative of the Australian government in South East Asia, was launched in 2016 with a $102 million allocation to promote women’s economic empowerment in the region.

Implemented by Abt Associates Australia, the program focuses on workplace gender equality, gender lens investing for women’s small-to-medium enterprises and tackling adverse gender norms in the region. It operates in the Philippines, Indonesia, Vietnam and Myanmar.

On International Women’s Day, OnImpact speaks with Prachi Maheshwari – who manages the program’s Impact Investing pillar – about the growth of gender-lens investing, how blended finance can reduce risk and spur private investment, as well as recent partnerships with groups like the Macquarie Foundation amid the early days of the covid crisis.

Progress, but still a long way to go

In the impact investment world, the concept of ‘gender lens investing’ is broadly understood, and it’s increasingly forming the foundation for a range of innovative strategies. 

It’s a model that recognises the layers of inequality and biases (subconscious or not) faced by women-entrepreneurs, and aims to shift perceptions, and encourage the broadening of traditional investment horizons. 

“Capital allocation with a gender lens has increased dramatically over the past decade, specifically in PE/VC, with around 138 funds deploying US$4.8 billion. But overall, these gender lens investments still account for a minuscule figure in the capital markets, and we have a long way to go.” Prachi says.

The IW program was launched with a $102 million allocation from the Australian government, working to break-down supply-side constraints on capital flowing to SME’s run by women, and employing women. 

It was clear the market would need support and reassurance. The initial model saw IW use a grant-based model to build a business-case for gender lens investing. The grants were the first movers, and hoped to attract subsequent investors. 

Providing a baseline of capital was one thing, but it wasn’t going to be enough of a push to get investors moving. So they implemented the ‘Capital+’ model, which provides catalytic investments, alongside technical assistance to local fund managers. This comes in the form of advisory and operational grants to help build capacity around gender lens investing. 

“Investing in women entrepreneurs makes smart economics, but face a gender financing gap exacerbated by the social and cultural biases prevalent in the capital markets. Investors would claim that there isn’t a strong pipeline of entrepreneurs while women’s SMEs continue to face the dearth of growth capital and business support. Investing in Women is using a capital+ model of blended finance to solve this puzzle.” Prachi says. 

By pairing capital, with practical skills and training, the model has seeded 11 funds with $36 million in capital. This has translated into the pilot initiatives scaling to over $300 million through private sector allocation and public co-investments. 

Through these 11 funds, the project has invested in 63 women’s SME’s, which in turn have supported 4,349 jobs, of which 57% are female.

Rapid Deployment of Covid Support

It was very difficult to forecast what impact the covid crisis would have on varied communities and businesses. For IW, the threat was clear, they were watching the impacts in China and how SME’s were coping. 

In Southeast Asia, there was a huge potential for negative impacts, they’re closely integrated with the Chinese economy. The IW team reached-out to both businesses and investors, to try and understand how they were coping, and where there were vulnerabilities to cash-flow. 

They move quickly, launching the Investing in Women RISE Fund (Responsive Interventions Supporting Entrepreneurs) in June 2020.

The fund provided liquidity where it was needed most, aiming to ameliorate covid impacts, and keep SMEs afloat so they could continue to support their communities. 

The fund had two components; an emergency fund which supported businesses already in the portfolio, and a Resilience Fund, which supported new fund managers to launch and scale their impact investing in the region.

The Macquarie Group Foundation stepped in to support the Resilience Fund, contributing more than $1.25 million. 

“The Macquarie Group has business interest in the Philippine market, and they (through their foundation) were keen to support the local community during the pandemic. That’s how Macquarie and Investing in Women collaborated on the RISE Fund to increase liquidity for women’s SMEs contributing to economic resilience of the community.” Prachi says. 

International Women’s Day

Here at OnImpact, we support investors committed to impact. We recognise the considerable funding gap facing women entrepreneurs, as well as the huge opportunity that exists for investors to unearth untapped potential.

In all our publications we work to highlight the hard work being done by groups like IW and individuals like Prachi. And on International Women’s Day, we’re taking the opportunity to tell their stories.

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