Meet one inspiring female founder. Larasati Widyputri is the CEO of Ecodoe, an e-commerce platform based in Indonesia that sources handmade souvenirs from rural and indigenous creators and sells to large corporate buyers. When Larasati first founded the company in 2016, she faced myriad challenges: lack of funding, no mentor, missing connections to support providers in the entrepreneurial ecosystem. Early on, the company was on the verge of bankruptcy.
Yet fast-forward and we find that Ecodoe has received support from the investment readiness program of the Asian Venture Philanthropy Network (AVPN). AVPN then linked Larasati to the USAID RISE Platform funded by USAID and managed by Swisscontact Cambodia. Through RISE, Ecodoe accessed fundraising support through Empassion, the advisory wing of Instellar. After this support, Ecodoe won the DBS Foundation Social Impact Prize worth SGD 10,000 and secured an additional debt investment from the GLI lending platform, BIDUK.
Most recently, in the midst of the COVID-19 crisis, Ecodoe made a quick pivot and hired unemployed shoemakers and garment workers to produce handmade personal protection equipment (PPE) – meeting the market need for PPE while providing quality jobs for poor and disadvantaged workers. Larasati’s team is poised to survive the pandemic and emerge strong and more resilient in its wake. Her determination, flexibility, and commitment to her business and social impact are impressive!
Larasati is one of many compelling examples of a successful female entrepreneurs in our region. Investor who apply a gender lens are eager to support such entrepreneurs. GLI is a form of investing that takes gender into consideration along with financial returns and risk. Investors approach GLI in different ways; there are any genders lenses to consider. Examples of lenses include women-owned or -led businesses, companies that promote gender equity in the workplace, and businesses whose products or services benefit women and girls and/or contribute to gender equity in the market.
Applying a gender lens to business can catalyse deeper impact. On the one hand, when women found, lead, manage, and/or work for businesses, they generate income, contribute to economic growth, and open new economic opportunities such as access to credit and investment. A 2015 McKinsey Global Institute report finds that empowering women to achieve their full economic potential and advancing women’s equality could add USD 12 trillion to global GDP by 2025.
The gender lens benefits are not only economic. In a conversation with Christina Lagarde, the Managing Director of the International Monetary Fund (IMF), Katja Iversen, President/CEO of Women Deliver, explains that “research shows when women have the opportunity to participate in the formal labor force and have an income, it increases their influence and decision-making power within their families and communities.” She continues, “It [research] also shows that women to a larger extent reinvest their earnings in their children’s health and education, creating a ripple effect that benefits future generations. The gains can also be observed in the workplace, men and women complement each other, “creating more value than if workplaces were less gender diverse”.
In this conversation, Christina Lagarde adds another dimension from a 2018 IMF study, Economic Gains From Gender Inclusion: New Mechanisms, New Evidence. The study examined the impact of the different skills women and men bring to the workplace. Christina explains:
Because of these differences, men and women actually complement each other, creating more valuethan if workplaces were less gender diverse. As a result of such complementarities, raising women’s participation in the labor force – including in leadership - can bring greater gains than raising male participation.
Despite these, and other, compelling arguments for gender equity, the 2019 Global Gender Gap Report alarmingly states that it will take a little under a 100 years to close the overall gender gap. Astonishingly, the area that has regressed in terms of achieving parity is economic participation and opportunity. Too many jobs dominated by women are becoming automated, and in jobs where there is a high chance of growth such as the tech sector, women are less represented. Insufficient access to capital and care infrastructure adds an additional barrier.
Businesses and investors who apply a gender lens can help address the gender gap and improve gender equity. But they face myriad challenges, including history, culture, politics, educational systems, and conscious and unconscious biases within the entrepreneurial ecosystem. These challenges manifest in many ways. Women-led and -owned companies, for example, access venture capital disproportionately less than companies led by men. The 2019 IFC report Moving Toward Gender Balance in Private Equity and Venture Capital explains that in emerging markets, women-led businesses receive only 7 percent of total private equity (PE) or venture capital (VC) funding. The fact that women are significantly underrepresented among PE and VC investment decision-makers.
Through the USAID RISE Platform, we have seen that GLI is an important strategy, conceptual framework, and financial instrument for addressing gender challenges in businesses and in society. But we have also seen that GLI requires non-financial support services to increase its effectiveness. Therefore, we have developed partnerships and products to help contribute to support gender lens investors and businesses. We have partnered with GLI investors such as BIDUK and Teja Ventures, providing post-investment technical assistance (TA) in the form of a repayable grant to exciting women-led and -benefitting businesses such as Duithape and Siklus. We partner with gender-focused acceleration programmes such as Kinara, SHE Investments, and WISE to offer investment readiness TA to their graduates. And we are developing a GLI TA product tailored to our female clients who aim to raise GLI funds.
We will continue our work to support gender-focused businesses and investors and encourage you to find ways that you can support them as well!
To learn more about GLI, we highly recommend the Global Impact Investor Network’s (GIIN) Gender Lens Investing Initiative and the recent Gender Lens Investing Landscape - East and Southeast Asia report produced by Sasakawa Peace Foundation, Catalyst at Large, and SAGANA.