For AlphaMundi Foundation (AMF), applying a gender lens to impact investing is not just about social benefits—it’s a smart business decision.
“We’ve seen from the data that when you adopt a gender lens, it’s really not just about the social impact. It creates a positive financial benefit or return to the company,” says Ladé Araba, executive director of Alphamundi Foundation, during a webinar to promote ENERGIA’s new study focusing on financing of women-owned micro, small and medium enterprises (WMSMEs) working in the renewable energy sector or using renewable energy to expand their business, in sub-Saharan Africa. The study was supported by GET.invest and carried out in partnership with Distill Inclusion.
As a nonprofit that offers structured, blended finance to small and medium enterprises (SMEs) in Latin America and Africa, AMF has found that prioritizing gender inclusion at all points of the investment lifecycle leads to better business outcomes. AMF aims to influence the businesses it works with to adopt and support gender equity by embedding gender-smart practices—such as technical assistance—into their DNA at an early stage, while also empowering a new generation of female entrepreneurs (Source).
“Gender-smart technical assistance activities contribute to both positive business and social outcomes for companies and their stakeholders, including enhanced brand loyalty, increased sales and staff productivity, reduced costs, and stronger workplace cultures,” AMF says.
Many of AMF’s learnings have come through participating in a consortium called the Gender Smart Enterprise Assistance Research Coalition (G-SEARCh), which is committed to sharing and implementing key lessons from gender-smart interventions.
While partaking in the G-SEARCh consortium, AMF provided eight SMEs with gender-smart technical assistance in various areas of business, including:
- sex-disaggregated data and analysis
- products and services
“What we’re trying to also accomplish is not just focus on gender as the end goal, but to demonstrate the value in applying a gender lens and what that does for the bottom line,” Araba says of AlphaMundi Foundation’s work.
Through participating in G-SEARCh, AMF gathered three key insights that will help impact funds support SMEs with technical assistance:
1 – For business-focused technical assistance to be successful, there must be buy-in from the investees’ leadership.
2 – The success of different gender-based strategies varies depending on the SME’s business model. For example: Business-to-consumer (B2C) companies better capitalize on marketing and sales changes than business-to-business (B2B) companies, while human resources adjustments are a good fit for both B2C and B2B companies.
3 – Given that all SMEs have unique challenges and opportunities, it is important to perform a gender diagnostic with companies to identify areas of technical assistance that will have the highest impact.
One business to whom AlphaMundi Foundation offered technical assistance through their work with the G-SEARCh consortium is Fundación Espoir, an Ecuadorian microfinance institution. During the COVID-19 pandemic, Fundación Espoir experienced high customer attrition and other challenges.
But with support from AMF, Fundación Espoir conducted gender-inclusive market research to better understand their customers. Espoir found their understanding of their rural women group loan clients’ digital capabilities and access was incorrect and contrary to national trends. Fundación Espoir learned that these clients were digitally capable and interested in accessing business and financial advice through digital channels.
Using feedback from this customer research, Fundacion Espoir adjusted their internal processes to include a gender-inclusive performance management system and launched an e-learning platform for clients.
“The study confirmed that we have to be open to digitization because that is where the world is going,” says Claudia Moreno, deputy director of Espoir.