Press Release: G7 Development Finance Institutions Set New Goal of $15 Billion for Gender Lens Investment Through ‘2X Challenge: Financing for Women’ Initiative
The Japan International Cooperation Agency (JICA) made a joint announcement setting a new goal of $15 billion to be mobilized over the next two years (2021 and 2022) as a new phase of an initiative called “The G7 2X Challenge: Financing for Women” (the “2X Challenge”) with development finance institutions (DFIs) on June 9 in Cornwall, U.K., on the occasion of the G7 Leaders’ Summit.
The 2X Challenge was founded by the DFIs of the G7 nations (*1) in June 2018. This was to mobilize their own funds, together with private capital, to contribute to gender equality. The goal of the 2X Challenge in the previous phase was to raise $3 billion by 2020, in order to double investment and to impact on women’s economic empowerment, aiming to unlock resources that will help advance women as entrepreneurs, as business leaders, as employees, and as consumers.
More than 200 deals have qualified for 2X investment. $7 billion have been raised, which is twice as much as the original target, and another $3 billion mobilized from private investors who recognised the value of investing in women in the developing world.
In February 2020, JICA signed a limited partnership agreement to provide financing for “Women’s World Banking Capital Partners II,” a fund that will finance institutions which deliver financial services to women in developing countries. In November 2020, JICA signed another commitment agreement for investment in the “COVID-19 Emerging & Frontier Markets MSME Support Fund,” a fund that will provide loans to microfinance institutions in Asian countries. The fund was also supported by CDC (UK) and DFC (US).
The COVID-19 pandemic has worsened a situation where women in emerging economies have significantly fewer economic and business opportunities than men. There is research showing $1 trillion could be lost from global growth if female workers in sectors that were hardest hit by the pandemic do not return to the workforce. A growing body of evidence suggests that identifying effective ways to support women as entrepreneurs, leaders, employees, and consumers will increase gender equity, reduce poverty, and promote more inclusive and robust economic growth (*2).
Today, the 2X Challenge member DFIs announced that they would seek to raise at least a further $15 billion by the end of 2022 as new members joined, namely the International Finance Corporation (IFC), the European Bank for Reconstruction and Development (EBRD), and the Austrian Development Bank (OeEB).
On the occasion of setting up the new phase of the 2X Challenge, President Kitaoka stated, “To ensure human security and quality growth, JICA commits itself to continue to invest in women’s empowerment strategically in pursuit of human dignity which underlies the philosophy of the 2X challenge.”
JICA will strengthen its cooperation with 2X Challenge member organizations to support women’s access to good quality jobs, to build resilient businesses, and to manage the devastating impacts of the COVID-19 pandemic through this Financing for Women (gender lens investment (*3) )” initiative.
(*1) The DFIs of the G7 nations are CDC (UK), Proparco (France), JICA and JBIC (Japan), DFC (US), FinDev Canada (Canada), DEG (Germany) and CDP (Italy). The other DFIs have joined the initiative including, Swedfund (Sweden), FinnFund (Finland), FMO (the Netherlands), SIFEM (Switzerland), IFU (Denmark) BIO (Belgium) and, as an early multilateral endorser, the European Investment Bank (EIB)
(*2) COVID-19’s hit to women’s jobs could cost the world $1 trillion by 2030 | McKinsey & Company
(*3) Gender-lens investment is the one to seek financial return and to promote gender equality
Photo courtesy of Meena Kadri.