NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Tuesday, March 8, 2016

To many, impact investing connotes low or no returns. Despite the skepticism, these investments made with the goal to generate a  social or environmental impact alongside a financial one, is a growing market. About $60 billion worth of impact investment assets are under management, according to the Global Impact Investing Network – which provides much-needed capital to some of the world’s biggest challenges, in sectors ranging from agriculture to education. And some of the biggest returns lie with women.

A survey of impact investors  by the Global Impact Investment Network found that a third of respondents explicitly target gender equality as an impact theme, and with good reason. Investing in women isn’t a noble act of charity, but a great business opportunity. A new study from consultant Cambridge Associates and the Global Impact Investing Network found that private equity and venture capital funds with impact missions produce about the same returns as funds for which the goal is simply high returns.

Marianne Haahr, director of the Global Opportunity Network, shared with me five ways you can invest in women, and how this helps the world.

1. Invest in ‘women’s crops’ In the developing world, households are more typically divided along gender lines. Women are responsible for feeding the family, and men manage the money that comes from the ‘cash crops’. Traditional investments into smallholders tend to back the most lucrative assets, like tobacco, which are held by men, but focusing on subsistence crops ensures that women can feed everyone and then sell the surplus for profit. Investing in ‘women’s crops’, such as maize, cassava and millet, empowers women within their own families and beyond the household. Haahr says that “some women form cooperatives so they can market their produce at better prices, and this gives rural women a stronger voice locally.”