Investing in women: a profitable path to empowerment and equality
Date: Thursday, May 6, 2021
Panama, May 04, 2021. In Latin America and the Caribbean there is a significant, but often unnoticed, gap. It is one more form of inequality, another form of discrimination against women: access to credit.
According to data from IDB Invest, the division of the Inter-American Development Bank that works with the private sector, in 2017 microenterprises owned by women received US$5 billion less in financing than those run by men.
And in Small and Medium Enterprises (SMEs) led by women, the credit gap reached US$93 billion. This is a paradox, considering that 22% of women in Latin America and the Caribbean are self-employed.
According to data published by the International Finance Corporation (IFC), only 5% of all venture capital and private equity funds go to women-led businesses.
Additionally, the average venture capital and investment capital funding received by women-led businesses is US$500,000, compared to US$12 million for male-led businesses.
Despite this challenge in accessing funding, women-owned or women-led businesses produce 78 cents for every dollar invested, as opposed to just 31 cents for male-led ventures, according to the Boston Consulting Group.
"If women generate more income, decide on spending and are profitable entrepreneurs, why do they have fewer opportunities?" recently asked UN Women's Regional Director for the Americas and the Caribbean, María Noel Vaeza.
The question was addressed to the panel of the event "Investment, Women and Technology", organized by UN Women as part of the Investors for Equality initiative, which seeks to promote innovative financing and gender-sensitive investments in Latin America and the Caribbean.
The event, moderated by Isabel de Saint-Malo, former Vice President of Panama, was attended by Silvina Moschini, first unicorn startup in Latin America and Founder of ! Maren Lau, vice president of Facebook for Latin America, Marcelo Melamed, vice president of Human Resources Latin America for Lumen Technologies; Paloma Castellano, director of , the investment, open innovation and entrepreneurship support arm of Telefónica in Latin America, and Leonardo Villa Reynolds, portfolio manager of the Administradora de para Retiro de México.
One of the challenges for the economic empowerment of women is the mobilization of capital for impact businesses, diversifying the sources of financing and the development of more innovative mechanisms. When it comes to technology, women receive barely 2% of the capital invested in this industry.
"The future of the world is technological, and this future cannot leave out 50% of the population. Investing in women today builds a more diverse and fulfilling future," said Paloma Castellano. For Marcelo Melamed, diverse and inclusive companies are more profitable. And this is through the creation of strategies that address the skills and knowledge of the entire work team."
"An increase of women in leadership positions in companies is associated with a 15% increase in profitability. We need actions and not intentions, in order to change reality and not just the narrative," said Silvina Moschini.
For Leonardo Villa, women must be involved in the design of organizations, "impacting the culture of organizations from the strategic decision makers. This is even more important in key industries that have the greatest impact on societies, where the technology sector clearly leads the list.
Among the challenges to achieve substantive equality for women and girls, and their empowerment, and in view of the accelerated advance towards a Fourth Industrial Revolution (based on the technology sector), a fundamental task is to close the digital gap between women and men.
Worldwide, less than 50% of women are connected to the Internet. In Latin America, although 69% of women use mobile internet, 70 million women still do not use it.
Therefore, for Lauren Mau, "the democratization of access to digital tools and platforms allows women, especially those from vulnerable populations, to move forward having vision and future in technology".
There is a long way to go, but the event made it clear that investing in women is a wise decision: it helps close gaps, improves profitability and brings us closer to gender equality.
Watch the webinar again here: https://fb.me/e/5kP6MojCK
About the Initiative:
Investors for Equality is promoted by UN Women in the framework of the "Win-Win: Gender Equality is Good Business" program, implemented by UN Women and the International Labour Organization, with the financial support of the European Union.
It is a platform for meeting and dialogue between the actors of the investment ecosystem for the promotion of innovative financing and the mobilization of investments with a gender approach in Latin America and the Caribbean.