Gender-Lens Investing Shouldn’t Be a Niche Strategy. It’s Time to Apply It Broadly.



Like many women, Wamahoro, a native of Rwanda, once worked two jobs, one of which was in the informal sector. “I used to sell my baskets at the local market to supplement my farming income,” she says.

At the local market, however, Wamahoro’s handmade baskets sold for only 82 cents a basket — not much in the way of supplemental income.

Women across the world live out a similar story. Many struggle to find secure employment that provides a living wage. According to UN Women, for women age 25 to 54, labor force participation is only 63 percent globally, compared to 94 percent for men. In 2018, 104 out of 189 economies still had laws that prevented women from working specific jobs. Worldwide, women are more likely to be unemployed than men, and they are overrepresented in informal sectors and vulnerable positions.

However, Wamahoro’s story took a different turn once she was connected with All Across Africa (AAA). AAA is Fair Trade Certified company that works with over 3,000 artisans, 95 percent of whom are women, in Rwanda, Uganda, and Ghana. These women produce handmade products for markets in the United States, and AAA sells these products to large clients like Costco, FTD (ProFlowers), and Ethan Allen. Although orders haven’t yet been large enough to create full-time employment, these women have benefited from gaining part-time employment that pays well: AAA’s average purchase price is about 5.7 times that of local markets.

“AAA buys from me at $4.60,” says Wamahoro. “I have since been able to acquire land and construct a house for my family closer to town and take my three children to school. I also employed someone to tender the farm while I weave.”

Supporting social enterprises like AAA is AlphaMundi Group’s core mission. Founded in 2007, AlphaMundi is an impact investing firm based in Switzerland with offices in the U.S., Kenya, and Columbia. It provides debt and equity financing to scalable social ventures in East Africa and Latin America.

“AlphaMundi Group was designed to address the missing middle gap in emerging markets,” explains Christine Roddy, executive director of the AlphaMundi Foundation. “In these markets, it can be difficult for small and medium enterprises (SMEs) to access financing to grow their businesses, so AlphaMundi identifies SMEs that are trying to implement financially viable Sustainable Development Goal solutions and then helps them grow to national market leadership and cross-border scale.”

In 2016, AlphaMundi Group founded a sister nonprofit, the AlphaMundi Foundation, to help catalyze and scale private sector investment in social enterprises that seek to improve the lives of the poor.

The foundation came about partially in response to the growth and scale of the firm, but mostly “as an acknowledgement that, based on our experience, SMEs need support beyond just investment,” says Roddy. AlphaMundi Foundation raises grant capital to provide SMEs with pre- and post-investment technical assistance spanning three core areas: financial management, internal governance, and operations. The foundation also supports the impact measurement and management efforts of high impact enterprises and shares lessons learned with the broader impact investing community.

Two years ago, AlphaMundi Group began integrating gender analysis into its investment process, including formally considering a company’s commitment to mainstreaming gender considerations across their business model as a component of the due diligence process. Meanwhile, AlphaMundi Foundation began mobilizing resources to provide SMEs with subsidized support to integrate gender considerations across their business.

“Everyone, whether you are a fund manager, asset owner, or entrepreneur, should be thinking about how to improve opportunities for women and girls, and everyone has a unique role to play,” says Roddy. “AlphaMundi Group can leverage its role as a capital provider to incentivize SME leaders to incorporate gender considerations throughout their business.”

Unlike many actors working in gender lens investing (GLI), AlphaMundi’s approach to GLI is broad rather than narrow. Many organizations active in the GLI landscape only work with companies that are women-run, women-owned, or centered on developing products/services geared towards women and girls only.

“We find that approach too limiting,” Roddy says. “I would estimate that about 20 percent of our portfolio companies meet that criteria. We want to work with that other 80 percent to help them make gender lens a core business principle across their business, like environmental sustainability or social impact.”

AlphaMundi’s hypothesizes that — when it comes to financial and social performance — those companies that incorporate gender considerations across their business model will outperform their peers that don’t take this approach.

In 2018, AlphaMundi Group also began using a diagnostic tool created by Acumen and the International Center for Research on Women to assess how its portfolio and pipeline companies are currently incorporating gender considerations across their business model. AlphaMundi has all prospective investees complete the survey prior to pursuing investments. The survey is designed to be a light lift for companies: it’s short and self-reported. Even so, its results are revealing. For instance, one question asks whether at least one woman was consulted during the design phase of the company’s products/services. Many companies report “no.”

After AlphaMundi identifies a company’s current strengths and opportunities for improvement when it comes to gender integration, it works individually with that company to help to implement gender-smart solutions in areas needing improvement. The implementation of gender-smart practices, as well as the challenges women face, vary greatly depending on the context, region, and sector in which a company operates. “There’s tremendous variety in the challenges, so there’s also tremendous variety in the solutions,” says Roddy. “We have to think about the solutions that we propose and test them to ensure they make sense for the local context of our portfolio companies.”

For example, one company in the AlphaMundi portfolio is receiving grant funding from the foundation to assess the company’s sales, loan collection, and repayment processes with a gender lens. A deep analysis of the firm’s gender disaggregated sales and loan repayment data as well as interviews with staff and key stakeholders revealed that women sales agents required fewer interactions with customers to close sales than male sales agents did.

Based on these key data, AlphaMundi decided to support female agents by addressing the gender-specific challenges surrounding their mobility in an attempt both to increase their ability to see more customers per day and to determine if female agents could improve their sales performance even further because of this increase. The firm piloted both quantitative and qualitative strategies such as increasing travel stipends for staff that do not have access to company vehicles since the staff members without access often lack drivers licenses and are often women. The pilot is ongoing, but AlphaMundi is optimistic that interventions such as these will demonstrate both enhanced financial performance and improved gender equity across the company.

Such bespoke solutions are often more successful than one-size-fits all, cookie-cutter approaches. However, providing every company with unique technical assistance is expensive. For fund managers, implementing and exploring gender-smart investment requires subsidy. “To work with early growth stage companies operating in challenging environments, you need grant capital and time to identify, pilot, test, and scale the most appropriate gender-smart solutions,” Roddy says.

That’s where international development agencies such as the United States Agency for International Development (USAID) can play an integral role in promoting GLI.

Like AlphaMundi, USAID’s Office of Gender Equality and Women’s Empowerment believes that investing for gender equity and balance will result in increased profits, return on investments, and positive humanitarian results. It has been focusing on increasing the flow of capital into gender-smart businesses by increasing the use and quality of GLI strategies among investors and portfolio companies.

AlphaMundi is currently working with USAID INVEST, an initiative that mobilizes private capital for better development results, to develop, pilot, and test gender investing solutions for sustainability-oriented SMEs in developing nations. Partnering with Value for Women, a specialized advisory firm that helps organizations advance gender inclusion, AlphaMundi is assisting SMEs from both within and outside of its portfolio in identifying gender-smart solutions to their business challenges.

“INVEST is giving us the opportunity to perform the deep dive needed to analyze a company’s business model and structure with a gender lens,” says Roddy. “By working with INVEST, we can expand our ability to find and test solutions and continue to build evidence that supports the business case for gender-smart investing.”

Building that evidence base for GLI is an important goal for both USAID and AlphaMundi. USAID hopes that developing a database which shows that gender-smart investing is good investing will catalyze the field of GLI. Likewise, AlphaMundi has been a leader in GLI field building. It is a member of the Gender Smart Enterprise and Research Coalition (G-SEARCh), a group of five like-minded impact investors committed to integrating gender considerations across their portfolio companies by providing them with grant capital. They have partnered with Canada’s International Development Research Centre to build evidence on impact and a strong business case for this kind of support.

“Many people ask, ‘Why do you have to test this hypothesis about gender-smart performance? People should care about gender and advancing the opportunities of women and girls, period,’” says Roddy. “I agree [that people should care], but, in terms of working in the investing industry, you have to make a business case to move major capital. By building this evidence base, we can move major capital in a way that will positively affect women throughout the world.”


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