Guest Articles

August 20

Vanessa Erogbogbo / Ayesha Khanna

SME Investing With a Gender Lens: The Key To COVID-19 Recovery in Emerging Markets

As COVID-19 overwhelms healthcare systems and grinds economies to a halt, the most fragile individuals and communities have suffered disproportionate devastation. The crisis could push 100 million people back below the poverty line causing immeasurable ripple effects on societies around the globe. It could also upend our ability to reach the United Nations’ Sustainable Development Goals (SDGs), slowing progress in the fight to end poverty, protect the environment and ensure that all people enjoy peace and prosperity by 2030.

It can be hard to think about recovery while much of the world remains in the eye of the storm – but we must begin to envision a world on the other side of this global pandemic. CARE USA and the International Trade Centre’s (ITC) decades of work supporting small and medium-sized enterprises (SMEs) demonstrate that these businesses can be a critical lynchpin to help families, communities and economies rebound.

As expected, SMEs have taken a particularly hard hit during the COVID-19 crisis. A recent sampling of 4,467 companies across 132 countries through the ITC’s COVID-19 Business Impact Survey illustrates that while SMEs tend to be more agile than larger companies, they face severe resource constraints, making them more vulnerable during a crisis of this magnitude. The same is true for marginalized populations: CARE’s on-the-ground COVID-19 recovery work in 67 countries (out of the 100 countries where CARE provides development and humanitarian assistance) shows that women and girls are the hardest hit, due to previously existing inequalities that have been further exacerbated by the pandemic. The best way to cushion the impact of this crisis and to preserve the livelihoods of poor women and their families is to invest in SMEs that create value for women in the short term, so that they can sustain and build more resilient and equitable communities and economies.

At CARE and ITC, our contribution to this important recovery effort is the US $75 million CARE-SheTrades Impact Fund (“the Fund”), which is focused on investing in SMEs that promote gender equality in the workplace, with consumers, and with supply chain businesses in South and Southeast Asia. The Fund has also joined forces with five other global funds to form the SDG500 – a ground-breaking impact investment platform designed by Bamboo Capital Partners to meet the critical demand for new financial mechanisms that can reach SMEs around the world. Today, as we continue to battle the greatest crisis of this young century, the need for this type of financial vehicle is even more relevant and urgent than ever.

On July 14, CARE, ITC and Bamboo Capital Partners discussed this need at a roundtable with heads of government, UN agencies and NGOs, as a side event at the UN’s High-Level Political Forum on Sustainable Development. The conversation was focused around one central question: How we can the global community come together to finance SMEs as the critical path to recovery from COVID-19 – while still hoping to achieve the SDGs in time? We believe the answer is to invest, now and with intention, in SMEs in the regions that are most impacted by the pandemic and best positioned to support the continuity and ultimate growth of these businesses.


Why investing in SMEs can help us recover from the COVID-19 crisis 

Small and medium enterprises are critical to the economic and social development of emerging markets, generating between 70% and 95% of their new employment opportunities. These businesses are the backbone of many economies, contributing to job creation, innovation and productivity. Many are providers of essential goods and services such as food, agriculture, healthcare, water and energy – sub-sectors that are particularly resilient in challenging environments due to their crucial nature. SMEs tend to have local demand drivers that are somewhat protected from global trends, and their nimbleness helps them quickly recover as the economy picks up after crises and slowdowns.

Despite the tremendous economic, social and environmental value that SMEs represent to their local economies, these businesses tend to get lost in the crowd when it comes to financing. There are a significant number of SMEs in emerging and frontier markets that have customers, revenue and growth traction. But because they are too small for traditional financing and too big for microfinance, they are often overlooked by local, regional and global finance providers. This is a significant missed opportunity.

SMEs’ ability to sustain operations during a crisis and then efficiently put capital and people to work afterward makes investments in the sector a smart strategy to rebuild communities impacted by COVID-19 and the subsequent economic slowdown. Creating opportunities for SMEs in emerging markets is an essential way to advance economic development and reduce poverty, and this will be even more critical during the recovery from the pandemic.


How investing in women will generate the greatest returns

We don’t want the COVID-19 crisis to turn back the clock on women’s economic participation. Our Fund will harness the power of the private sector to achieve SDG5: Gender Equality. To help achieve this important goal, CARE has worked to protect women at work around the world – for example, by providing access to dignified jobs for eight million garment workers in Asia – and has partnered with the United Nation’s International Labor Organization to adopt global labor standards that prevent violence and harassment at the workplace.

Businesses that create positive economic impact for women are well-positioned to generate financial and social returns. We know that women are active in essential sectors like agriculture and education, and that their participation in economic systems contributes significantly to GDP and global growth. By growing businesses that create value for women in hard-hit regions of the world, we hope to increase women’s participation in their local economies to build a sustainable and just recovery from the devastating effects of this global pandemic.

The CARE-SheTrades Impact Fund is centered around a comprehensive, innovative gender-lens approach, applying CARE’s proven gender analysis frameworks and tools at every stage of our investment process to address the unequal power dynamics that continually hold back marginalized women. Through the provision of technical assistance to its portfolio companies – provided by CARE’s on-the-ground gender and business experts – the Fund will improve the working conditions for female employees, create economic prosperity for women consumers, and strengthen and expand women-owned SMEs in the supply chains of its investees.


Why we’re focusing on South and Southeast Asia

A recent study by the International Finance Corporation shows that just over half of the global finance gap for SMEs can be found on the Asian continent. This underscores how vastly underserved the region is in terms of its capital allocations by investors, with only 3-6% of global assets under management invested in Asia. In addition, tens of millions of people are living below the poverty line in the region.

Alongside this significant regional need is an even bigger opportunity. From an investor perspective, the region also shows the With consistently strong macroeconomic growth trends in the past decade – alongside solid civil infrastructure, government support and a growing pipeline of businesses – it is unsurprising that the Emerging Market Private Equity Association’s investor survey has ranked Southeast Asia as the most attractive market for investment for the past two years. Asia’s emerging markets continue to hold the highest overall positions in the survey, with India and China rounding out the top three. Given the important nexus of need and opportunity converging in South and Southeast Asia, the Fund’s regional strategy will focus on Indonesia, Vietnam, the Philippines, Cambodia, Myanmar and Bangladesh.


A first-of-its-kind partnership

CARE, ITC and Bamboo Capital Partners have come together to form a first-of-its-kind partnership to lead and manage this SME-focused gender justice fund, and each party brings its unique expertise and resources to bear in the hopes of making it a success.

CARE is a global humanitarian, development and social justice non-profit with 10,000+ staff working in 100 countries, and Bamboo Capital Partners is a frontier markets impact manager. Through its for-profit subsidiary, CARE Enterprises Inc., CARE is partnering with Bamboo to govern and manage the Fund. CARE Enterprises will be working with CARE’s gender and business experts, in markets where the Fund invests, to help source and generate the impact of the Fund’s investee companies.

Meanwhile, ITC’s SheTrades initiative, which aims to connect three million women to markets, will leverage its deep market expertise, in-country teams and projects in the Fund’s six target countries to help our investee companies grow. It is also leveraging its 20,000-strong female founder network to ensure a robust pipeline of investment-ready companies.

This collaboration is our chance to build a more equitable and sustainable future – a network of profitable enterprises that are committed to using gender-just business practices to lift families out of poverty. Join us to accelerate the recovery from the COVID-19 crisis by investing in the inclusive businesses that will lead the way. If you’re interested in learning more, please reach out to or send an email to ITC SheTrades at


Vanessa Erogbogbo is Chief of Sustainable and Inclusive Value Chains at the International Trade Centre and Ayesha Khanna is Managing Director of CARE Enterprises Inc.


Photo courtesy of Johen Redman.




Coronavirus, Investing
COVID-19, gender equality, gender lens, impact investing, SDGs