DGGF, Financing local SMEs - Gender Lens strategy explained

The Dutch Good Growth Fund (DGGF) is committed to improving the financial ecosystem for missing-middle SMEs operating in frontier markets. Increasing the access to finance to female entrepreneurs is a strategic priority. In this article, we explain what our Gender lens strategy entails and what’s our way of working.

Besides investments into locally managed funds and financial institutions DGGF deploys a broad range of instruments such as seed capital, pre- & post-investment technical assistance, ecosystem support and knowledge development. Through this inclusive and intentionally systemic approach, the DGGF has identified the where and how in order to reach female entrepreneurs owning and running SMEs. Via its investments, DGGF has gained a practical understanding of how to best support local capital providers to better serve female entrepreneurs’ financial needs.  

Female entrepreneurs are particularly underrepresented in the SME sector across the world. Research indicates that a higher participation of women as business owners and in the workforce would be beneficial to a sustainable growth of economies. [1] However, women are often overlooked or discriminated by systemic biases in the entrepreneurial ecosystem which prevents them from growing their businesses. Reasons why fund managers and financial institutions fail to finance female entrepreneurs can relate to lack of networks, male oriented biases and practices in the investment process, as well as lack of tailored financial products. Women entrepreneurs on the other hand, could benefit from better access to education networks and opportunities to build an investment track record.

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DGGF’s approach

As DGGF Financing Local SMEs there is a strong commitment to reaching a minimum of 25% female entrepreneurs** with financing via locally managed funds and financial institutions. DGGF has developed a tailored product offering with the aim to address the most pressing obstacles throughout the finance value chain preventing women from obtaining suitable financing to grow their businesses. Together with key partners, DGGF aims to provide more financing and create awareness to achieve a systemic change of the financial ecosystem for the benefit of female entrepreneurs, female employees and women in the value chain.

References

* =  UN Secretary General’s High-Level Panel on Women’s Economic Empowerment, Leave No One Behind: A Call to Action for Gender Equality and Women’s Economic Empowerment. Available here.

** =  Female entrepreneurs are defined in line with the IFC definition: ≥ 51% owned by woman/women; OR ≥ 20% owned by woman/women; AND (i) has ≥ 1 woman as CEO/COO/President/Vice President; AND (ii) has ≥ 30% of the board of directors composed of women, where a board exists.

Do you want to know more about DGGF’s strategic priorities and practical examples of how we implemented our gender lens strategy? Please click here.