Between 2020 and 2021, AlphaMundi and Value for Women (VfW) piloted strategies designed to both address gender disparities and improve business performance in small and medium enterprises (SMEs) in emerging markets. To learn about these strategies and the exciting early impacts and results, scroll on.
In the past decade, traditional gender-lens investing (GLI) definitions have focused heavily on investing in women-led businesses, however, only 7% of venture capital/private equity in emerging markets goes to women-led businesses and women-owned enterprises only account for approximately one third of all SMEs in emerging markets. While targeting women-owned and led enterprises for investment is laudable, AlphaMundi and VfW also recognized a large untapped market to work with all SMEs and to go beyond this single lens.
In 2017, AlphaMundi made a landmark commitment to integrate gender analysis throughout its investment process and published its first gender report, “Investing for Gender Equality”, which critically and holistically looked across its portfolio with a gender lens. The next year, VfW and the Shell Foundation published the watershed “A Business First Approach to Gender Inclusion”. In it, VfW brought forward a framework for addressing business challenges using gender-focused solutions. This approach opened new doors. There were now powerful new entry points: products and services impacting women, women in the value chain, and workplace equity. Together, these diverse entry points showed promise to maximize financial and social return per investment dollar in SMEs.
In 2018, AlphaMundi and VfW joined forces to pilot targeted business-first, gender-smart technical assistance activities with AlphaMundi´s portfolio companies. In 2019, and with the support from USAID’s Gender Equality and Women’s Empowerment Hub through INVEST, we expanded this initiative. We began to see exciting early impacts and preliminary results among SMEs with varied business models and in different geographies and sectors. We decided we needed to share this widely.
While many investors are convinced that investing with a gender lens is important, they need practical guidance and tested approaches for the “how.” We hope that the strategies and learnings presented here can serve as a starting point for investors and intermediaries starting on their respective journeys as gender lens investors.
Gender-lens investing is not a one-size-fits all approach; it requires highly tailored strategies. To develop these strategies, we began by carrying out a Gender Assessment that identified each of the participating SMEs' gender gaps and opportunities aligned with its respective business model. From there, we worked with each SME to design, implement, and measure the results of a set of highly tailored strategies with intended business and social impacts. At the end, Sustainability Plans were developed by each business, assigning roles, responsibilities, timelines, and metrics for continued gender strategy work.
Kentaste is a coconut processor in Kenya that produces a number of coconut-derived products sold regionally and internationally. VfW's Gender Assessment plus market research carried out with Kentaste revealed that the company could boost the reliability, quality, and sustainability of its supply chain by increasing engagement with women coconut suppliers. In response, Kentaste implemented targeted recruitment, registration, and training of women suppliers. Over a single month, these actions increased by 2.7x the number of women farmers recruited by Kentaste.
Espoir is an Ecuadorian MFI that provides services to low-income micro-entrepreneurs— 73% of whom are women. During the early months of COVID-19, Espoir could no longer carry out in-person education, which was a key element of its value proposition to women customers, and Espoir experienced customer attrition. Yet market research revealed that, contrary to expectations, Espoir’s women customers were more digitally savvy and connected to technology than Espoir had known. This included rural group borrowers, and these women wanted to receive business and finance-focused content via digital channels. In response, Espoir actively connected women to its e-learning platform. Today, women group borrowers represent 47% of all platform users, indicating a significant value-add and opportunity to improve customer satisfaction and loyalty.
Twiga Foods, a B2B food distribution business in Kenya, was keen to build an inclusive workplace culture, and particularly one that did not penalize working mothers. Based on its Gender Assessment, VfW supported Twiga Foods with incorporating gender into its Code of Conduct and adopting a Return-to-Work (post-maternity leave) policy. Twiga socialized these changes with its 700+ employees through town halls and other internal communications and Twiga’s staff appreciated the company’s increased attention to gender. Twiga saw employees’ overall satisfaction with the company increase by 20+ points.*
Ecuadoran MFI Espoir secured US$3M investment for their new financial product for women. This was a result of both its commitment, and the strategies it has implemented, to advance gender equality. These strategies ranged from implementing a gender-inclusive performance management system to enabling the e-learning platform with women-focused content, and were undertaken with support from VfW as well as other projects.
For details on these strategies, additional impacts and learnings, download the full report here.
AlphaMundi and VfW are continuing to partner on a new initiative to further support portfolio companies to implement business-first, gender-smart strategies. AlphaMundi is also spearheading Gender Lens Initiative Switzerland and G-SEARCh field building initiatives; and VfW is scaling and iterating its technical assistance model to ensure maximum reach and impact.
Forthcoming, additional findings and results from this work will be shared via the Gender-Smart Enterprise Assistance Research Coalition (G-SEARCh) and will feed into AlphaMundi´s larger research to build the evidence base and strong business case for investing with a gender lens.
Gender equality is a journey and not a destination. We hope you will join us on this collective voyage and we invite you to continue the conversation with us, through convenings, forthcoming publications and our social networks.