The GLI Forum LatAm 2023 opened its first day with an inspiring session with Nisha Biswal, Deputy CEO of the U.S. International Development Finance Corporation. Interviewed by Carmen Correa, CEO of Pro Mujer, the wide-ranging conversation covered the general panorama of gender lens investing in the region, the role of large organizations in developing new financial instruments, and how to create opportunities for women through gender lens investing.
During the session, Nisha highlighted how DFC, through its 2X Women’s Initiative, has expanded and diversified its activities in the region.
“The 2X initiative has really helped us to focus and incorporate gender and inclusion in everything that DFC does around the world,” she said. “Since the 2x Initiative was launched, DFC has mobilized nearly $10 billion in gender lens investments, and last year we invested $2.54 billion in gender lens investments that meet the 2X Criteria.”
The 2X Criteria are a series of metrics to guide and inform a gender lens investing framework. Some of the metrics include share of women ownership, share of women in senior management, share of women in the workforce, etc. The objective of the 2X Criteria is to provide a solid framework to identify and align gender lens investments.
Nisha also highlighted the importance of creating innovative strategies that implement multiple tools to address shared sustainability and inclusion objectives. “Our loan portfolio guarantees are helping financial institutions lend to women and at-risk communities. We are also exploring equity investments and new innovative instruments, such as impact loans. Our first orange bond focuses on women and female leadership. We are also creating impact bonds with other focuses, such as refugee impact bonds, and exploring other innovative ways to use these tools.”
Orange bonds are a sustainable debt asset class for investing with a gender lens. They are designed with the Global South and North having an equal seat at the table in an effort to build a financial system that embraces diversity, equity, and inclusion.
During the conversation, Nisha also highlighted that while strengthening gender lens investment instruments is fundamental to strengthening the ecosystem, it is critical to combine these efforts with technical assistance and other types of support to ensure the success of the projects and, by extension, the return of capital.
“One of the things we discussed earlier was the need to adopt an ecosystem approach,” said Nisha. “Financing is a key component, and DFC is providing all the tools to facilitate that access to finance. We want these companies to succeed, so our financial interest is to make sure that the loans are repaid and that we can take that capital and recirculate it. If we want companies to succeed, we have to provide the necessary ecosystem: that’s innovation. We are seeing more institutions looking to drive entrepreneurial development through mentoring and training for businesses to succeed and grow.”
Although she recognized that the immediate goal is to facilitate as much capital as possible for businesses that meet the 2x Criteria, Nisha emphasized that the real objective is to go beyond supporting microenterprises to help them grow and reach international markets. The real challenge for DFC is learning how to harness the power of investment to ensure that access to capital is only the gateway to a whole value chain that truly maximizes an enterprise’s growth potential.
In closing, Nisha emphasized that the most effective way to address the financing gaps that affect women in rural and underserved communities is to target our focus and initiatives specifically to these areas. This means listening to the women in these communities, understanding their needs, and creating products that respond to them. She also stressed the importance of rethinking gender lens investing from an interconnected and intersectional perspective to incorporate sustainability and climate change in impact strategies.
