Giving Compass' Take:

• B. James Soukamneuth explains cultural norms that keep money out of women's hands, and impacting investing is needed to close the gender capital gap. 

• How can philanthropy help to close the gender capital gap? What is the economic potential of gender-lens impact investing? 

• Learn how to get involved in gender-lens impact investing. 

Investing in women makes smart economics. Yet, women, especially poor women, remain economically marginalized — working harder, receiving less income, and enjoying less decision making power than their male counterparts.

Women-owned and women-led businesses operating in the small and medium-sized range (collectively women’s SMEs) account for a large source of untapped job creation and economic growth in developing countries but encounter significantly more barriers to growth than their male counterparts.

Women start businesses with less capital than men and have less access to capital to expand their enterprises. Financing options, availability of capital, and their associated costs drive firm size, determining a company’s ability to compete, respond to evolving market conditions, and scale operations to realize market opportunities.

In developing countries, an estimated 70% of women-owned small and medium-sized enterprises in the formal sector are unserved or underserved by financial institutions — a financing gap reaching US$ 287 billion. In East Asia and the Pacific, this financial gap runs to US$ 68 billion.

Investing in Women, an initiative of the Australian government, was designed to support the growth of impact investing for women’s SMEs in Southeast Asia. Launched in 2016, the Investing in Women Initiative promotes women’s economic empowerment by redressing socio-cultural barriers to women’s full economic participation, whether in leadership positions, access to capital, labor force participation, or workplace equity. Within impact investing, the program seeks to expand access to — and control over — economic resources for women entrepreneurs.

Read more about investing in women by B. James Soukamneuth at Medium.