Through the Gender Lens

Since my previous post, I’ve continued to delve into gender lens investing, that is, investment in women-led firms, businesses that promote gender equity, and companies that benefit women through products and services.

In analyzing GroFin’s portfolio and others operating in a similar space, it’s become clear that we as investors are becoming more cognizant of emerging trends. Recently, there has been an almost palpable shift away from a gender-specific silo towards a more holistic vision of empowering women as investees, employees, consumers, suppliers and beyond.

GroFinPortfoliobySector

What are the implications?

GroFin Female Investments by SectorWe recognize that gender lens investing transcends far beyond female ownership of portfolio companies. Within our 10 years of investing in small and growing businesses in emerging market, we have amassed social indicators on more than 400 portfolio companies. This wealth of data leads to some interesting insights.

Firstly, we found our women entrepreneurs were most reachable within the high-impact sectors. While they were more or less proportionally represented within GroFin’s main sectors (wholesale/retail and manufacturing), women investees were 3 times more likely to operate in the community and social sectors, which include health and education.

Secondly, when examining the top third of our portfolio with the greatest percentage female employees, we found that we need to target a different set of sectors to promote greater female job creation. Wholesale and retail, followed by manufacturing, community & social sectors, were leaders in terms of employing the highest absolute numbers and percentages of women.

Finally, the resulting social outcomes are much more vast than just the number of women entrepreneurs or women employees. There’s a much bigger ripple effect that we are only beginning to quantify.

 

GroFin Female Employment by Sector

A Greater Impact

We know women tend to invest a higher percentage of their earnings into health, food and education for their children. For example in a multi-sector portfolio such as ours, gender equitable investment could translate into increased years of education for children and life expectancy. It may also lead to greater financial returns, given as recently noted at the SEED Africa Symposium in Nairobi by our Investment Executive Rishi Khubchandani, “Our female investees report twice the turnover growth of the average portfolio company and are generally more consistent in repayment.”

The Future of Gender Lens Investments

In just a short time, gender lens investing has gained tremendous traction, appearing in Forbes, catalyzing the formation of gender lens funds, and more. While the issue moves to the forefront, causing more investors to talk about gender and to measure gender investment impact, the real benefit is coming closer to finding the blended value of equality. Studying data about the longer-term effects of gender-focused investment and quantifying the metrics we can help create a more equitable economy and a more balanced society. GroFin will continue to work with initiatives like Vital Voice VV GROW to increase our provision of business support and appropriate finance for female entrepreneurs in Africa and the  Middle East.