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

Thursday, April 11, 2019

Impact Investment Exchange (IIX) – a global organization dedicated to building a more inclusive world through innovative finance and support for high-impact enterprises – has been awarded S$1.2M from the Australian Government’s Department of Foreign Affairs and Trade (DFAT) to develop the ecosystem for gender lens investing in Asia. With a decade of experience building the impact investing market and driving women’s empowerment across the world, IIX will leverage its ecosystem and gender-focused approach to support the growth of 500 impact enterprises across Asia.

Durreen Shahnaz, CEO and Founder of IIX, said: “Despite Asia’s astonishing wealth and growth potential, underserved women remain one of the most vulnerable populations and continue to be excluded from a dignified life. At the same time, empowering women is the most effective way to build a more inclusive, peaceful and prosperous world where growth works for everyone. Gender lens investing is a powerful solution to shift deeply embedded dynamics from treating women as victims to valuing them as solution-builders. Through our partnership with DFAT, IIX is taking our work to the next level by enabling everyone to play a role in building inclusive markets.”

IIX’s program, called Equity@Scale, is funded under DFAT’s Frontier Brokers initiative—which focuses on addressing key weaknesses in the current entrepreneurial ecosystem and moving capital to impact enterprises. Through Equity@Scale, IIX will support impact enterprises with three types of capital: human capital in the form of investment readiness training; social capital in the form of access to mentoring and corporate networks; and financial capital in the form of access to investors and private sector equity and debt investments.

With an emphasis on shifting gendered power dynamics in favor of women entrepreneurs and accelerating the growth of gender-lens investing, Equity@Scale will incentivize impact enterprises to integrate women throughout their value chain. The program will also provide impact investing ecosystem players (including investors, foundations, banks, financial service providers, lawyers, corporate partners, and mentors) with the tools and resources to apply a gender-lens to their business approaches, processes and strategies of engagement.

Shahnaz continued: “As a woman entrepreneur, I started IIX with the vision to bring women and underserved communities to the forefront of financial markets. I witnessed first-hand how women-led and women-focused businesses face challenges to growth at every turn and realized that to change this we need to move beyond fragmented solutions and create long-term pathways for change. For nearly a decade IIX has been building these pathways through a unique ecosystem approach—supporting entrepreneurs with impact assessments, technical assistance and our award-winning ACTS accelerator program; connecting them to investors through our Impact Partners crowdfunding platform; creating innovative financial products such as the Women’s Livelihood Bond™ that unlock greater private capital and amplify public resources; and sharing our experiences and methodologies with ecosystem players.”

Gender lens investing refers to the use of finance to create gender equity by incorporating a gender analysis into investment decisions, with the intention to improve outcomes for women. According to GIIN, interest in gender lens investing is increasing in Southeast Asia. IIX’s Equity@Scale program will accelerate conscious investment into women’s empowerment by broadening mainstream definitions of gender lens investing to include those investments which go into companies and initiatives that benefit underserved women (defined as low-income, rural, and minority women) in emerging markets. IIX’s Women’s Livelihood Bond™ (WLB1) – the world’s first impact investment product listed on a stock exchange reporting social and financial returns – is an innovative financial product that paves the way for large-scale mainstream investment in women’s empowerment. With the success of the WLB1, IIX has partnered with USAID, DFAT, DBS Bank, Shearman & Sterling LLP, Latham & Watkins LLP, and Cyril Amarchand Mangaldas for the Women’s Livelihood Bond™ 2 (WLB2) that will unlock over US$100 million of private sector capital to impact one million women across Asia.

Women in Asia are on average 70% less likely than men to be employed, and face a 30-40% gender wage gap. Closing the gender gap in Asia could generate a 30% increase in the per capita income of the average Asian economy in one generation. While impact enterprises play a critical role in addressing gender equality and sustainable development issues, they face barriers in accessing resources and capital to grow. This issue is compounded for women-owned businesses across the developing countries, with an estimated 70% of the 7 million women-owned SMEs in the formal sector unserved or underserved by financial institutions

Photo courtesy of Aaron Gilson.