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Investing in Women and Inspiring Inclusion: Strategies That Work

Sarona and 2X Global team
Sarona and 2X Global team
Sarona and 2X Global team at the GLI networking event in Toronto, Canada

Every March 8th, on International Women’s Day, we are reminded of the ongoing gender inequalities and the obstacles women encounter in business and the workplace. This year’s theme, “Investing in women and inspiring inclusion,” resonates strongly with Sarona’s values. In the spirit of this theme, Sarona is outlining three concrete strategies that showcase our dedication to promoting women’s progress:

  1. Deploying a gender lens investing strategy ensures financial resources flow to ventures prioritizing gender equality
  2. Providing capital to fund managers that support women entrepreneurs, recognizing their pivotal role in driving innovation and economic growth
  3. Championing diversity and inclusion initiatives to create more equitable and inclusive workspaces

Through these efforts, we ensure that women’s economic empowerment becomes a tangible movement, not just a topic of discussion.

Deploying a gender lens investing strategy to ensure financial resources flow to ventures that prioritize gender equality

Sarona is actively implementing a gender lens investing strategy, directing capital to companies that champion workplace equity at all levels, from employment and management to boardroom representation and supply chain practices.

Sarona is the investment manager of Australian Development Investments (ADI), a development finance mechanism launched in June 2020 by the Department of Foreign Affairs and Trade (DFAT). With an impact-driven approach, ADI facilitates SME expansion across South and Southeast Asia and the Pacific to generate both financial returns and social, environmental, and governance benefits, with a strong emphasis on gender equality and climate action.

As of 2022, the three SME Funds have invested in 17 businesses that provide products and services benefiting 553,801 individual clients, more than 1 million micro-enterprises, and 15,100 SMEs across five countries. The ADI fund seeks to support women-led SMEs, provide products and services that sustainably improve women’s and girls’ lives, or promote gender equality in their workplaces. To achieve this, ADI incorporates gender analysis alongside financial and legal due diligence in screening all investments. It actively assists fund managers and their portfolio companies in strengthening gender equality while maintaining profitability.

Using our GLI Framework, ADI identifies the extent to which targeted Fund Managers integrate gender into their investment processes and operations. To date, ADI has allocated AUD 16.8 million – 70% of its total investable capital – to four SME Funds in Southeast Asia. This commitment has attracted AUD 197 million in private investments, and ADI has co-invested this amount alongside an additional AUD 263 million in public investments, including those from Development Finance Institutions (DFIs). ADI’s mobilisation rate of 1:12 surpasses the typical benchmarks for the Asia-Pacific region.

Ralitsa Rizvanolli, Partner, Head of Impact Investments at Sarona
Ralitsa Rizvanolli speaks at GLI event in Sinapore

All ADI fund managers met or surpassed the 2X Challenge criteria for women’s representation in the Investment Committee, Executive/Partners, Managers, and Employees. However, more progress is needed in achieving gender-balanced company boards. At the portfolio level, 75% of ADI portfolio companies met the 2X Challenge criteria. In August 2023, ADI’s facility cap was raised to AUD 250 million to promote more significant development impact through investments in gender equity and climate mitigation and adaptation.

Providing capital to enterprises that empower women entrepreneurs, recognizing their pivotal role in driving innovation and economic growth

Sarona and Koinworks teams at the Koinworks office in Jakarta, Indonesia

Increasing the number of women entrepreneurs leads to a healthier economy and higher earnings in communities. KoinWorks, a credit-led MSME neobank based in Indonesia, is a portfolio company of Lendable, one of the ADI SME funds.

As a part of its mission, KoinWorks has introduced a particular category for women-led businesses within its KoinRobo product to facilitate quicker access to funding. Since 2019, KoinWorks has doubled the number of women-led small and medium-sized enterprises (MSMEs) in its portfolio, with women now heading 37% of all MSMEs.

KoinWorks’ research indicates that women-led businesses benefit more from their support, with 75% of women MSMEs achieving financial goals (vs. 70% for male-led), increasing life quality, and doubling cash flow improvement. However, women-led enterprises show slightly lower growth at 31% (vs. 35% for males).

Despite starting from a slightly more challenging position than their male counterparts, these women entrepreneurs exhibit a greater desire to scale their businesses and a higher propensity to adopt digital banking solutions, with 91% showing a strong drive for business growth (compared to 82% of men) and 15% utilizing digital banking (versus 2% of men).

Eunike Adelia is a founder of the Jakarta-based coffee shop chain Kopitagram. It is a cozy place where people can meet up with friends or family, chat casually, or work while enjoying their favourite iced coffee. The KoinWorks funding helped Eunike open new Kopitagram branches in more locations around Jakarta and other cities.

Eunike Adelia
Eunike Adelia Founder Kopitagram

“One of the most impressive things about applying for a loan at KoinWorks is the administration process. I find it really quick. Once my loan application was accepted, it only took 4 days for the loan disbursement, so I could go ahead with my expansion plan. I tried another similar company, but their administration takes a very long time.“

Eunike Adelia, founder of Jakarta-based coffee shop Kopitagram, is one of the borrowers funded through KoinWorks.

In the future, KoinWorks plans to increase engagement with female entrepreneurs to develop gender-specific solutions for equal business growth.

Championing diversity and inclusion initiatives to create a more equitable and inclusive workspaces

Creating an environment where every individual can actively participate and reap the benefits of economic growth is crucial for minimising social inequalities. Adopting an inclusive business model promotes a more just society and enriches corporate culture with diverse perspectives.

Do The Right Thing (DTRT) Apparel is a clothing manufacturing company in Ghana that offers cutting, making, and trimming services. It is part of the Verod Fund portfolio and has two production locations. DTRT employs approximately 5,000 full-time staff in Ghana, over 70% of whom are women.  Each of our employees supports an average of three to five dependents – primarily children and other family members- through the wages they earn at DTRT.  The company is making further strides in its commitment to workforce diversity. In the next three years, DTRT plans to hire more people with disabilities (PWDs), aiming to have over 1% of its workforce be PWDs. The United Nations has found that PWDs usually have difficulty finding jobs, with an 80-90% unemployment rate in developing countries.

Working in partnership with the Ghana National Association of the Deaf (GNAD), DTRT welcomed 16 deaf employees into its Accra and Tema factories in August 2022. By April 2023, eight of these team members have continued their journey with DTRT, making substantial contributions to the organisation. Notably, Bella emerged as a top performer, embodying DTRT’s commitment to fostering a diverse and inclusive environment.

Bella is a highly regarded DTRT employee, providing that persons with disabilities can be productive team members

As Bella explained: “I’m 28 years old, and this is my first job. And I don’t know how I would survive now if I didn’t have this job because it’s very difficult to find work. Yes. I have been told I’m a good worker, but I don’t believe that my being deaf has caused this. It’s just that I’m a hard worker. I have no desire to leave DTRT. Instead, I want to become a team leader for deaf employees. We speak each other’s language and can support each other in ways other employees can’t. It’s not that they don’t want to try. It’s just that deaf people know how to overcome our special challenges, especially if we work together.

Bella’s success, along with DTRT’s efforts and partnership with GNAD to think about starting a production line run by deaf people, shows DTRT’s commitment to including everyone and its belief in overcoming obstacles to create a supportive workplace for all.

Happy International Women’s Day from all of us at Sarona. Let’s continue to invest in women and inspire inclusion today and every day.

Sarona Asset Management, a global pioneer in impact investing, is dedicated to generating competitive financial returns alongside positive social and environmental outcomes. Our firm’s investment strategies focuses on fostering sustainable development by partnering with local entrepreneurs operating high-growth businesses in emerging markets that generate attractive returns for our investors while contributing positively to their communities. Our goals include empowering women, protecting nature, creating and enhancing employment opportunities, improving governance, and building strong communities.

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