Press Release: New Research Shows That Investing in Women in Agriculture Generates Significant Value for Businesses and Investors
Ten years of global data from Root Capital—a nonprofit that supports the growth of agricultural enterprises in Africa, Latin America, and Indonesia—proves that gender-inclusive businesses are a smart investment
An analysis of 10 years of global data from Root Capital sheds new light on the benefits—to women, businesses, and investors—of investing with a gender lens. Inclusion Pays: The Returns on Investing in Women in Agriculture finds that agricultural enterprises with greater women’s leadership and participation are more stable, more profitable, and less likely to default on their loans.
The business case for women’s leadership is increasingly clear, but the evidence almost exclusively relies on data from large businesses, especially those in advanced economies. There’s even less data about the agricultural industry—a sector that 2.5 billion people globally depend on for their livelihoods, and one in which women receive only a fraction of total investment.
Drawing on data from more than $1 billion in investments to 552 agricultural enterprises across Latin America, sub-Saharan Africa, and Indonesia over the last 10 years, Root Capital found that businesses with greater levels of women’s participation are:
- More stable and profitable;
- Less likely to experience significant revenue dips;
- Less likely to default; and
- More likely to secure new sources of financing.
“Root Capital’s Women in Agriculture Initiative (WAI) has pioneered new ways of investing in rural women via gender-inclusive and women-led agricultural enterprises,” said Willy Foote, Founder and CEO of Root Capital. “Our experience, and now our data, over the last 10 years contradicts the widespread misconceptions that result in women receiving a meager 7% of global agricultural investment. Investors should look to women in agriculture not only because they are key to fighting global poverty, food insecurity, and climate change; they also generate a higher return on investment.”
In fact, Root Capital’s data shows that—controlling for the loan size, region, and industry—loans to women-led enterprises, on average, yield $17,850 more profits than loans to non-women-led enterprises. Importantly, businesses with greater women’s leadership and participation were almost 21% more likely than non-gender-inclusive enterprises to obtain new social or commercial financing after their loans from Root Capital; in other words, betting on women in agriculture put these businesses on the path to future growth and impact.
“Root Capital launched the WAI in 2012 to help level the playing field for rural women through financing, training, and other resources that boost their economic opportunity and agency,” said Leonor Gutiérrez, Director of the Women in Agriculture Initiative. “To date, we have invested $545 million in over 260 gender-inclusive enterprises, reaching more than 550,000 women farmers and employees. Together with other investors, we must continue to close the gender financing gap so that women and their communities can thrive.”
View the full report here.
Photo courtesy of Axel Fassio/CIFOR.