Increasingly, the evidence shows that investing in women and betting on their potential is profitable for financial institutions and the investment community. Based on this evidence, more and more financial groups, banks, and organizations are incorporating a gender focus into their financial products, resulting in an innovative trend of using debt products as an effective vehicle to meet women’s financing needs.
Private debt products refer to loans or other forms of debt financing provided by private entities, such as banks, hedge funds, or private equity firms, which aim to offer alternatives to products offered by the government or other public entities.
During the GLI Forum LatAm, the panel “Debt Products for Gender Equality” focused on strategies to strengthen gender-responsive financing, fundraising challenges, the business case for the sector, and best practices and programs in debt financing in Latin America.
Led by Cecilia Rabassa, Division Chief Portfolio Management at IDB Invest, the session featured key players from the Latin American financial sector: Verónica Gavilanes, Deputy General Manager of BancoSol; Alejandro de León, Founder of Microwd; and David Grey, Corporate Affairs and Sustainability Manager of Banco Pichincha.
Verónica Gavilanes kicked off the discussion by talking about the importance of incorporating a focus on financial inclusion, poverty reduction, and sustainable development into an organization’s vision.
“We have built a comprehensive model that includes 7 areas of focus, 13 lines of action, and 48 key indicators that are all grounded in SDG 5,” said Verónica. “This model makes a clear statement that we are interested in and committed to closing gaps and promoting the growth of businesses led by women in Bolivia and supporting their growth while also ensuring that we center these values internally by implementing equitable practices and policies that support women’s development and opportunities within the organization.”
Alejandro de León then highlighted the critical role of women’s excellence in making these financing efforts profitable and positively impacting their families and communities.
“The greatest compliment I can think of for my clients is to say that our company is profitable thanks to them,” he shared. “We’ve boosted our social impact because, of course, investing in a woman gives so much more than just financial returns. She invests much more in her children’s education, improves her house, and sometimes even gives her husband a job. It’s clear that investing in a woman is investing in her family and her community. What we do is invest in extraordinary women.”
Alejandro then emphasized that Microwd’s challenge has consistently been demonstrating that Latin American women can be more profitable than other investments and that the knowledge and excellence found at the base of the pyramid can be converted into a social impact product that is more profitable than the stock market.
During his contribution, David Grey pointed out the financing gaps that exist for women in Ecuador and how Banco Pichincha has worked to reduce them: “In Ecuador, 53% of the population are women, but only 50% of these women have access to a bank account, only 8% can save, and only 15% have access to credit,” he said. “When we reviewed our own portfolio, we saw this same gender financing gap… Today, 6 out of every 10 loans are placed with women, and we have closed the gap in microfinance thanks to this intentional approach. But the world isn’t perfect, and this financing gap remains an issue for SMEs. We’re now focusing all our efforts on closing that gap.”
David shared additional information about how the bank’s “Crédito Mujer” product seeks to facilitate women’s financial education and empowerment, as well as offering adjusted terms and conditions unique to the Ecuadorian context, including low risk analysis and flexibility, e.g., not requiring the signature of the spouse to apply for a loan.
In closing, Verónica shared the importance of aligning commitment to gender and diversity at all levels of the organization to ensure consistency both internally and externally.
“Which leaders have a seat at the table, board diversity, diversity in the C-suite…these topics are all important. Diversity needs intentionality,” she said. “I always say, if your market is women, you must be intentional about bringing your female colleagues to the table. There is female talent in every organization—let’s give them an opportunity and a voice. Internal consistency requires a lot of focus on training and awareness.”
For his part, David emphasized the strategic role of financial institutions in driving women’s development and unlocking their potential as catalyzers and agents of change.
“As financial institutions, we have a vital role to play, which is financing,” he noted. “If we, as financial institutions, intentionally support women’s development in our regions and countries, this support multiplies. By providing financial independence, access to banking services, etc., we are helping that woman contribute to the development of her household. That woman is thinking about education, health, improving her home. She is thinking about development. Women focus on development; they have a broader perspective. Women think about their families and their immediate communities. They think about how to make a positive impact wherever they can.”
