Giving Compass’ Take:
• Gladys Kai Xin Ng shares three ways that entrepreneur support organizations can work to close the gender financing ap that hurts women.
• Are you doing enough to ensure that female entrepreneurs are receiving support?
• Learn how philanthropy can unlock capital for women.
Despite efforts to reduce it, the gender gap is still alive and well for entrepreneurship in Asia. While women are the fastest growing group of entrepreneurs in Asia, they tend to have less access to financial resources. Zooming into Southeast Asia, female-owned enterprises with sufficient access to financing averaged only 5-6% of microenterprises, 12-15% of small firms, and 17-21% of medium-sized businesses.
With capital flows being more interconnected than ever before, ESOs should partner and collaborate to mobilize capital for female-led businesses. Here are three ways that they can do so:
First, work with gender-focused funds to unlock greater impact. Gender lens investing, which aims to advance the interests of women and also generate strong financial results, is gaining traction is Asia. As its goals are multifold, collective action across stakeholders will be crucial in driving impact. With the growing number of gender-focused funds like the Sasakawa Peace Foundation’s Asia Women Impact Fund, ESOs should explore collaborations with these funds to unlock more capital for female entrepreneurs.
Second, partner with public and private funders to promote more financing options. The three most prominent financing types in Asia’s social investment landscape, namely equity, grants and debt, might not always be the right fit for businesses. They can potentially ignore certain groups of entrepreneurs by focusing on specific business models and risk appetites. At a time when funding is increasingly skewed towards male-run businesses, ESOs should work with investors to think creatively in deploying capital. For example, ESOs can promote investment vehicles like hybrid financing, which generates higher returns than debt but is more liquid than equity. This provides businesses with a more supportive financing environment, and can mobilise more capital towards female-led businesses.
Third, make your programmes more accessible and inclusive for all genders. Female-led growth-stage businesses receive considerably less funding pre- and post-acceleration partly because of fewer participation levels in these programmes. This calls upon ESOs to (re)design their activities to increase participation of all genders. Actionable plans include securing a gender-diverse pool of facilitators and mentors, developing marketing materials that explicitly depict programmes as gender-inclusive, and ensuring that programme location(s) and logistics are accessible for all regardless of gender.
Read the full article about entrepreneur support organizations by Gladys Kai Xin Ng at AVPN.
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