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25 Sep 20

What can the Blended Finance World Do to Address Gender-based Violence?

What can the Blended Finance World Do to Address Gender-based Violence?

Recently, Convergence participated in the Criterion Institute’s “Convergence XVII: Financing the reduction of gender-based violence” conference. Reducing gender-based violence (GBV) is key to realizing equal rights and opportunities across genders. Yet, GBV seldom gets the same attention as other gender-related topics, such as equal access to resources, equal representation in decision-making, and equal pay.

Convergence – our firm that is, not Criterion’s fortuitously named event – is the global network for blended finance. We have built a membership that includes private investors looking to diversify their portfolios, businesses seeking capital, as well as public agencies and philanthropic foundations, all focused to drive capital towards projects aiming to achieve the Sustainable Development Goals. In learning more about the role of finance in addressing GBV, Convergence has identified ways its community can help reduce violence against women and girls.

Here, we share some of those approaches. In doing so, it is important to recognize that efforts to reduce GBV must be met with a strong understanding of the local culture, people and history, and adequate local representation. Without this awareness and connectedness, good actions can lead to bad unintended consequences. Consulting gender specialists and local stakeholders before implementing any action or strategy is therefore crucial.

1. Identify and support companies and projects that work to reduce gender-based violence


The most straightforward strategy discussed at Criterion Institute’s conference is to support social enterprises whose business models address GBV directly. One example is the Nepalese company Fightback, which provides mental, vocal and physical self-defense training to girls and young women to reduce and mitigate the risk of sexual violence. Fightback was one of 75 businesses that received support from the SPRING accelerator, a 5-year program for businesses to innovate and improve the lives of adolescent girls across East Africa and South Asia. This accelerator was backed by three Convergence members; the UK’s Department for International Development, the U.S. Agency for International Development and the Australian Department of Foreign Affairs and Trade. This newly released report by the International Development Innovation Alliance’s Gender & Innovation Working Group lists a range of enterprises, projects and approaches that help prevent and reduce GBV.


2. Design or invest in financial structures that aim to increase women’s economic independence


Among the many reasons why women affected by violence cannot just leave the situation is because they lack control over financial resources. Designing and investing in transactions that enable women to access capital, whether for education or for their business, is one way to mitigate GBV and place women and girls in positions of power.

Chancen International, a Convergence member, shows how this can be done. The social enterprise with offices in Germany and Rwanda designed the Future of Work Fund, a USD 20 million debt vehicle that enables women and men to obtain tertiary education. The fund pays for their education up front, and students repay after graduating, using a percentage of their income over a number of years. In comparison with traditional student loans, these so-called income share agreements (ISAs) do not require any collateral and are designed so graduates only pay when they earn above the minimum income threshold.

MCE Social Capital, a non-profit impact investing firm, has developed a loan guarantee model to generate economic opportunity for women and families living in poverty. MCE uses these guarantees to lend to microfinance institutions and small and medium-sized enterprises (SMEs) in developing countries. It has so far disbursed more than USD 200 million in loans, reaching 55 countries. Lastly, the CARE-SheTrades Fund, a partnership between CARE Enterprises Inc., Convergence member Bamboo Capital, and the International Trade Centre (ITC), lends to women-led and women-owned businesses in South and Southeast Asia. Its target size of USD 75 million is composed of a senior tranche of USD 60 million and USD 15 million as first loss capital.


3. Partner with media companies that address how gender norms are being portrayed


In many sessions at Criterion Institute’s conference, participants reiterated the need to transform gender norms and fight bias. Given that the media influences social attitudes and norms, partnering with advertisement agencies, radio stations, and media companies that address how gender norms are portrayed, and are actively working to break away from biases, for example against LGBTQI people, is therefore another approach to help reduce GBV.

The Media Development Investment Fund, a Convergence member, provides affordable debt and equity to SMEs in the media sector with high social impact. In this case study, Convergence reflects on the fund manager’s history in providing over USD 200 million in loans and equity investments as well as USD 30 million in technical assistance grants to over 120 independent media companies across 42 countries. Amongst others, the fund works with Radio Daljir, a Somalian radio station that covers topics such as gender, education, and health.


4. Adopt internal organizational policies that address GBV and continue conversations


Institutionalizing a zero-tolerance policy towards GBV, both internally and in affiliated/invested projects, is another step forward. For internal gender violence considerations, this resource offers guidance in addressing and tackling challenges in the workplace. Additionally, investors should integrate GBV considerations in their due diligence process (see this guide for investors and this letter of intent). Not only is this good practice to reduce investment risk, but it also signals commitment to reduce GBV to potential investees.

GBV data and resources need to be translated and connected with financial performance, ideally by financial experts, so that investors can put relevant data to better use. Integrating GBV research into methodologies that assess market risk of investments and pricing these risks appropriately would strengthen investors’ decision-making about where to place their capital.

Last but not least, leaders are encouraged to ensure GBV remains a part of regular discourse within their organizations to ensure related issues come to the surface.

The conversations hosted by Criterion Institute have allowed impact investors, civil society organizations, and development practitioners to huddle together to act on GBV. As the leading market builder for blended finance, Convergence will continue to participate in discussions that will introduce new pathways for how blended finance can aid the fight against GBV.

Are you working on a blended finance transaction addressing gender-based violence? Contact us to learn more about opportunities to gain visibility with funders and investors in the Convergence network, or check out our Resource Library to learn about blended finance advancing SDG 5.

About the Authors
Regina Rossmann

Regina serves as an Associate for both the Training and Member Engagement teams. Prior to Convergence, Regina was a policy advisor at GIZ, the German agency for technical development cooperation, where she advised the German government on innovative finance for water and sanitation, and on pro-poor subsidy reforms. Prior to GIZ, Regina was a consultant at the World Bank Group in Washington, DC. She holds a master’s degree from the Johns Hopkins School of Advanced International Studies (SAIS) in Washington, DC, and a Bachelor’s in Chinese Studies from the University of Wuerzburg in Germany.

Aditya Vashist (Adi)

Adi is a Senior Associate on the Design Funding and Market Acceleration team. Previously, he worked as a sell side advisor at KPMG, where he supported multiple M&A/Venture Capital transactions in the consumer and technology space. Adi has also spent time working in social impact, through the Heart & Stroke Foundation, where he worked on scaling up Canada's first Social Impact Bond in healthcare. Prior to moving to Canada for his MBA, Adi worked in Oil & Gas consulting in Houston and Chicago, and led a successful e-commerce startup in New Delhi. He holds an MBA from the University of Toronto – Rotman School of Management, where he was the President of Rotman Net Impact, a university club dedicated to sustainable finance, and a BSc. in Industrial Engineering from the University of Illinois.

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