Capital infusion drives socioeconomic growth across strata, especially in developing economies. Whether it is government funding or investments from global investors, it has the potential to transform the lives of people, as well as the local economies they live off. The gender lens financing approach is a particularly relevant one for countries like India, given the skewed gender ratios we continue to witness in most aspects. It is a framework that encourages investors to consider the impact of their investments on gender equality and women’s empowerment. Across the global economy, there is a vast potential for investing in the well-being and progress of women. The idea is for investors to channel capital into women-owned or women-led enterprises, companies that promote workplace equity in terms of staffing, management, boardroom representation, and across supply chains); or investing in companies that offer products or services that significantly improve the lives of women and girls.
In the latest Global Gender Gap report released by the World Economic Forum (WEF), India has been positioned at 127 out of 146 countries. Despite a modest improvement of 1.4 percentage points and climbing eight positions compared to the 2022 report, India’s overall ranking still highlights significant gender disparities. Gender lens investing has the potential to be a gamechanger in this regard, by facilitating investment in the well-being and progress of this vast segment of the population.
Gender lens investing stands out as an impact-oriented approach, which has the power to transform the lives of women in India. This approach goes beyond traditional financial analysis and takes into account the unique challenges and opportunities faced by women-owned businesses. By applying a gender lens, investors can make more informed decisions that can generate financial returns, as well as contribute to creating a more equitable and inclusive society.
In India, the potential of women entrepreneurs remains largely untapped. A study by McKinsey Global Institute (MGI), showed that advancing women’s equality could lead to a $28 trillion increase in the global GDP. For India, this means a potential annual GDP boost of $770 billion by 2025, an 18% rise. By leveraging the gender lens approach and supporting women’s financial inclusion, investors can play a crucial role in unlocking this vast economic potential. India is, therefore, perfectly positioned to reap the benefits of gender lens investing, if the funds are utilized optimally to support women’s inclusion and growth.
Directing capital towards driving financial inclusion for women is a critical aspect of driving gender parity in Indian society. Traditionally, women in the country have been deprived of easy access to financial services, and even now, many continue to lack control over their own finances, leading to insecure circumstances and socio-economic disadvantages. Gender lens financing can be utilized to ensure that women across the board have access to the financial services, from lending to investing, at their disposal. This would facilitate financial independence and security for women, helping them achieve concrete progress.
The benefits of supporting women’s financial inclusion through a gender lens go beyond economic growth. One of the most significant ways it can affect positive change is by driving increased social mobility for women. When women have access to financial resources, they can invest in their families’ health, education, and well-being, leading to positive social change. In fact, according to the UN, women who earn, invest nearly 90% of their income in the well-being of their families and communities. This ensures that the population at large is more socially mobile, fuelled by greater access to education, healthcare, and better standards of living.
Empowering women entrepreneurs contributes to achieving several of the UN’s Sustainable Development Goals (SDGs), including poverty reduction, gender equality, and decent work and economic growth. Women-led businesses also often bring diverse perspectives and innovative approaches to the table. This results in better representation of women’s requirements, giving rise to products and services that cater to their specific needs.
Women entrepreneurs are one segment that has immense potential to positively impact society and is therefore a good candidate for gender lens investing to drive the second level of impact. Supporting women entrepreneurs fosters economic growth, as well as brings about significant social benefits. Women entrepreneurs often demonstrate a greater sense of social responsibility, directing resources towards priorities such as education, healthcare, and sanitation. By prioritizing these social issues, women entrepreneurs contribute to the overall well-being of their communities, creating a ripple effect of positive change.
Research has shown that women-led businesses are likely to be more efficient with capital and reinvest a larger portion of their profits back into their businesses and communities. Women also tend to be better borrowers than men, which is contrary to conventional beliefs and biases. Women have higher repayment rates, lower and delinquency, and they also drive social impact, which makes them a reliable avenue for investors looking for both financial returns and positive social impact.
Kinara Capital, a socially responsible fintech NBFC engaged in driving financial inclusion and growth for MSME entrepreneurs, has been demonstrating its commitment to supporting women entrepreneurs through the gender lens approach.
Kinara Capital leverages financing from global as well as domestic investors to provide capital support to women-owned MSMEs. The company provides tailored financial solutions, offering women entrepreneurs upfront discounts through HerVikas, and loan products designed to meet their specific needs and business models. Kinara also conducts workshops to support women borrowers with business knowledge and financial literacy, so that they can make the most of the financing they receive.
The women-majority management-led company also invests in mentorship and training programs focused on skills development and leadership for women employees. Kinara is dedicated to creating a diverse and inclusive work environment that allows individuals of all gender identities to thrive. The company has sensitization initiatives in place, as well as a zero-tolerance approach to issues like workplace harassment. By investing in these initiatives, Kinara has built a safe, inclusive and welcoming work environment for women.
By partnering with Kinara Capital, investors can actively contribute to supporting women entrepreneurs through the gender lens approach. Investors can support Kinara’s impact investing initiatives, which aim to generate both financial returns and measurable social impact by empowering women entrepreneurs.
The gender lens investing approach presents an exceptional opportunity for investors to positively impact society and their portfolios. By supporting organizations like Kinara Capital that empower women entrepreneurs, investors can contribute to the creation of a more just and inclusive world while still achieving positive financial returns.
Investing in businesses owned by women is a social responsibility, but it is also a pathway to realizing significant economic potential aligned with sustainable development goals. Investors can serve as catalysts for change by harnessing the power of gender lens investing and empowering female entrepreneurs, fostering a brighter future for all.
