Investing with a Gender Lens: What is that?

Guest blog post by Marlous van Oorschot. Marlous is a Lendahand investor and one of the initiators of Flourish, a network of driven female impact investors in the Netherlands.

Two years ago, I started social impact investing through Lendahand. In addition to my partner and mine's regular investment portfolio, I wanted to find a way to invest with a social impact, but I struggled to find a good starting point. Not only did I think I didn't have enough money to make such investments, but it was also exciting to start investing in these kinds of projects. One day, I read an article in the newspaper about Lendahand and realized the platform was ideal for starting social impact investing on a small scale and giving it a try. After a careful start, I soon found out how much I value investing in doing good for the world. My partner and I slowly but surely began adjusting our portfolio to make our investments match the change we want to see in the world. That's when I started to dive deeper into the different kinds of social impact investing and realized that, without even knowing, I am a so-called gender lens investor. 


Gender Lens Investing

The first time I came across the term Gender Lens Investing, I had no idea what it was. Even though this type of investing has experienced a growth spurt in the past few years, and many investment companies have adopted gender lens investing as their core business, not many people know why it’s necessary.

When gender lens investing, you consciously consider the impact your investment makes on women. The focus on women came about because of the persisting disadvantage women face as compared to men. Notice that this doesn't mean that investing with a gender lens rules out men and boys. According to the Global Impact Investing Network (GIIN), you apply a certain strategy when gender lens investing. Before making an investment decision, you investigate what the gender dynamics are at the company or fund you want to invest in to consciously and measurably combat gender inequality with your investments.


More than just empowerment

The reasons to invest with a gender lens are pretty straightforward. Investing in women is necessary to allow a better future for us all. Half of the world's population is female, and when they are doing well, their communities benefit from that. Women in emerging markets invest 90 cents of each extra dollar they earn in their family and immediate environment. This translates into better schooling, healthcare, and overall lifestyle, and eventually economic growth1. Previously, Lendahand wrote a blog article on the power of female entrepreneurs and the good it can bring when investing in them. From a social impact point of view, a focus on women is a wise investment. On top of that, it has been shown that fighting gender inequality through your investments makes you more alert to gender inequality in your immediate vicinity and lowers the barrier to act. 

Looking at your investments with a gender lens generates a good social return on investment. Skeptics will wonder how this will affect the financial return on investment. There is often hesitation to invest in women, mainly because the perception is that you will make less money from it. Time to debunk this thought! Research has proven that companies led by women or companies where the management team consists mostly of women do better than all-male companies2. The Boston Consulting Group discovered that startups led by women generate 78 cents of revenue for each invested dollar instead of 31 cents when men run the startup. On top of that, women have a better credit risk than men3. Among borrowers who receive microfinancing, women are more likely to pay back than men, and they’re more likely to do so on time4


An investment where everybody wins

Actually, gender lens investing is a win-win-win situation. You invest in a better life for women and thus society, you become more conscious about gender inequalities and try to act upon them, and you can potentially make a financial profit (depending on the risks you take and the companies you invest in, of course). 

I'm curious, does this change your view on investing? In my next blog post, I'll discuss how to invest while looking through a gender lens. 



1 Jackie VanderBrug, "The Global Rise of Female entrepreneurs", Harvard Business Review (September 4, 2013)
4 Bert D ’Espallier, Isabelle Guérin, Roy Mersland, ”Women and Repayment in Microfinance”, Institute of Research for Development, November 18, 2010

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