NEW YORK & STAMFORD, Conn.–(BUSINESS WIRE)–In an effort to drive meaningful progress on gender equity in financial inclusion, Developing World Markets (“DWM”), a U.S.-based private equity and debt manager with more than two decades of experience and a pioneer of modern impact investing, has examined how inclusive finance products and processes affect gender equity in real-world practice.
In partnership with Criterion Institute, a think tank specializing in analyzing gender and power dynamics in finance, DWM created an assessment tool to probe how effectively those dynamics have been integrated into company operations and then used the tool on its own portfolio companies, with the goal of surfacing insights that can be applied throughout the inclusive finance space.
Among DWM’s key findings, which were released today in a new report, entitled Gender, Power, and Process in Financial Inclusion: Insights from Developing World Markets’ Private Equity Portfolio:
- A gender-diverse staff alone will not lead to more equitable gender outcomes for clients. Even majority-female staffs require training on engagement, outreach, and power dynamics.
- Gender-sensitive programs can be undercut by other constraints which must be addressed. Even companies with thoughtfully designed products addressing the needs of women can struggle to effectively roll them out because the typical sourcing and origination channels, such as credit bureau data or sales agents, may have their own built-in bias.
- A clear business case should be articulated to achieve gender-related targets. Initiatives around gender targets, whether internally set or externally imposed, are most likely to be achieved when the business case is made explicitly for the staff and management.
- Data is available, but blind spots remain on integration of feedback. For instance, inclusive financial institutions may receive feedback from a gender-representative set of customers, but integration of this feedback into product design is often not well developed or completely absent.
“Access to finance for women is a critical first step to gender equity, but is not enough on its own,” said Hannah Schiff, DWM’s Director of Impact. “This deep-dive report shows how financial institutions can go beyond counting women to make their day-to-day practices more inclusive. We’re leveraging these findings to enhance gender equity within our own portfolio right away. While DWM is still early in its gender lens investing journey, we hope this report presents a useful blueprint for other impact-focused investors, as well.”
The research underpinning the new report is based on the premise that the business processes used to design and distribute financial products – and the power dynamics underlying those steps – have significant effects on social and financial outcomes.
In their research, DWM and Criterion Institute led a guided, in-depth assessment of the business processes of DWM’s private equity portfolio companies. After reviewing the assessments, DWM and Criterion Institute developed recommendations for how each portfolio company could apply more sophisticated gender analyses to its business processes. The researchers also arrived at a set of key findings, outlined above, that will help guide the gender lens investment conversation across impact investing and inclusive finance.
“This study lends support to our basic belief that rigorous gender analysis has potential to uncover business opportunities and drive equitable social outcomes,” said Aleem Remtula, DWM Partner and Co-Head of Private Equity. “We are confident that these findings will deepen the business case for a process-oriented focus on gender.”
“DWM is grateful to Criterion Institute for its vital partnership in executing this research and shaping this report,” said Remtula. “The report’s depth and practicality would not have been possible without Criterion’s sector expertise and nuanced insight.”
Founded in 1994, Developing World Markets (DWM) seeks investible solutions that sustainably address the social, environmental, and economic needs of the developing world. DWM began impact investing in 1999 and shifted exclusively to impact in 2007. DWM has over two decades of experience in emerging and frontier markets. Through DWM Asset Management, LLC, the firm’s SEC-registered investment adviser, DWM has originated and managed over $2.2 billion of private debt and private equity in impact-oriented enterprises, including over 900 loan disbursements and 25 private equity stakes in more than 70 emerging and frontier countries.