Shifting Power: Utilizing Finance to Promote Gender Equality
Denise Dalusong, Program Manager for Gender & Inclusion at Villgro Philippines, attended the ANDE Translation Workshop in November 2023, facilitated by the Aspen Network of Development Entrepreneurs East and Southeast Asia Chapter (ANDE ESEA) in partnership with Criterion Institute. Read her reflections below.
Systems of finance and investments have the power to influence how businesses will act and what happens in society and economies. What sectors they prioritize will effectively inform business and societal trends that affect enterprises and communities. It’s these same systems of finance that have the capacity to affect change intentionally and also create gender, environmental, and social impact.
In using finance as a tool to create and influence gender and social change, here are some key questions to reflect on:
How do we present social change and gender equality as a viable investment opportunity?
Investors and funds will have their own checklist of business opportunities, whether that be the stage of growth, asset value, or the sectors in which these enterprises operate. For impact investors in particular, an opportunity may also mean specific goals on social change like jobs created, improved livelihoods, and plastic waste diverted. As an organization that mediates in many discussions between investors and woman entrepreneurs, it’s our role to showcase impact enterprises that contribute to the impact goals of investors.
How do we change the way investors view risk?
Financial systems assign value or devalue depending on how they view opportunity and risk. These assumptions inform the type of return they can expect in a deal, and therefore what they end up investing in. Ultimately, opportunities and risks are material in any investment decision.
If gender equality and social change can be presented as opportunities, can they also be taken in the context of business risks? To strengthen the business case of an enterprise with an investor, it’s crucial to also analyze gender and social patterns in relation to market, operational, and reputational risks that an investor or firm may experience.
How do we shift the structure and terms of an investment to change who holds the power?
Many entrepreneurs will say that the power resides with the investor given that they have the money to invest and dictate the deal process. As a result, these entrepreneurs feel they are at a disadvantage when it comes to negotiating deals with investors. Women entrepreneurs, specifically, may refer to their gendered experiences as less than ideal given the investors’ explicit and implicit biases.
That said, entrepreneurs are more than able to negotiate terms and advocate for themselves in the investment process. At the end of the day, investors invest in the entrepreneur, and their capacity to grow and make the business succeed. For entrepreneurs to feel empowered to navigate fundraising, structures, terms, and documents have to be made accessible, inclusive, and intentional.
How do we influence what expertise is trusted?
Financing follows its own business process — a process that not only reinforces power dynamics but also incurs costs at each step. Due diligence is a laborious undertaking that requires the participation of different industry and technical experts to properly conduct. If one were to account for gender and social considerations in their decision-making process, then it’s expected that certain processes in the investment cycle have to change. Due diligence questions must reflect gender and social opportunities and risks. Investing standards must be adjusted to promote inclusion in representation and expertise.
How do we modify the success metrics that we look at in every investment?
Investors diversify their portfolios to optimize opportunity and mitigate risk. This means investing in different asset classes, following what their intent is. If an investor is interested in profit alone, their portfolio will look very different from an investor that wants to support innovations, and very different from an investor that finances social and impact enterprises. And with different portfolios come different expected outcomes.
In gender lens and impact investing, intent and success are measured differently.
While profit is a core success metric for all investments, gender lens and impact investing take it a step further and also look at certain gender and impact metrics such as gender-disaggregated data on beneficiaries or environment-specific outcomes such as land and water restoration.
Despite the documented success and impact of women-led social enterprises, the gender finance gap persists. As a gender-smart incubator, intermediary, and community builder, it’s our responsibility to contribute to growing the discourse around feminist finance and leveraging the business viability of investing in women.
Villgro Philippines directly bridges the gap through several initiatives that target specific aspects of the gender lens and impact investing ecosystem. On the women entrepreneurs’ side, the Nüshu Network is a gender-smart platform that offers community, coaching, and capital for women entrepreneurs in Asia who are looking to build and grow sustainable enterprises. On the investors’ end, the Gender Lens and Impact Investment Council is an industry body with a mission to champion and build a vibrant gender lens and impact investment ecosystem in the Philippines. And as an effort to develop a financing instrument that meets the capital needs of women-led and impact enterprises, the Impact Pioneers Network is the first-of-its-kind angel investing network to catalyze local capital and back high-potential Philippine enterprises through customized incubation, technical assistance, and investment readiness to prepare to raise capital.
Through these initiatives and our ongoing work in incubation and ecosystem development, we hope to amplify and create the space for feminist finance to be the default in every investing discussion. And with innovative partners like ANDE and Criterion Institute (and possibly you!) who champion gender equality in their work around social change and finance, we know we’re closer to our goal.
About the author
Denise Dalusong is the Program Manager for Gender & Inclusion at Villgro Philippines. A passionate advocate for gender equity, Denise’s work revolves around creating opportunities, connections, and safe spaces for all genders to successfully navigate their businesses and thrive.
Connect with Denise at denise@villgrophilippines.org
