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The World Sees a 30% Increase in Number of High-Net-Worth Women

BY Soko Directory Team · February 22, 2019 06:02 am

The increase in the number of high net-worth-women and women in leadership positions who are invested in gender empowerment is driving the field of gender lens investing.

Women held $39.6 trillion, or about 30 percent of the world’s wealth in 2016, up from 25 percent five years earlier. While the world’s wealth grew by 5.2 percent between 2015 and 2016, women’s wealth grew by 6.6 percent.

Female entrepreneurship is up 10 percent since 2014 with 163 million women starting businesses across 74 economies worldwide. The surge in the number of women entrepreneurs and women-backed ventures has led to an increased demand for capital and other forms of investment as well as a pipeline which has consequently attracted more investors into the sector. However, capital supply is still limited with an existing unmet demand of over USD 285 billion from women-led businesses.

Women and girls make up about 49.6 percent of the global population and continue to experience inequality and discrimination which limit the choices and opportunities available to them.

Private sector investors have joined in to add to the efforts of philanthropic initiatives and governments to mitigate the issues of gender inequality, resulting in the emergence of the field of ‘gender lens investing’ over the last decade.

Gender Lens Investing

Gender lens investing is an investing approach to promote social and/or economic empowerment of women in addition to financial returns. Most of the gender lens investing funds as well as the research in this field is concentrated in the global north with limited awareness and understanding of the concept in the global south. In order to understand the potential of gender lens investing to make a positive difference in achieving gender balance, it is necessary to understand the context in which it is being adopted.

Research studies show that women have a greater interest in sustainable investing with positive socio-environmental returns, in addition to financial returns as compared to men. The increase in women’s wealth coupled with an interest in Socially Responsible Investing (SRI) is reflected in the increase in gender lens investments backed by influential/high net worth women globally.

There are numerous venture capital and private equity funds taking the lead in gender lens investing, led by women as part of the executive and investment teams. Additionally, the number of women starting business ventures has been on the rise globally.

Gaps in Gender Equality

Globally, there are wide gaps in gender equality and access to economic opportunities for women. Women face disproportionate challenges in access to opportunities across all spheres of life such as education, health care services and finance. They also have to face social challenges such as gender stereotypes and mobility and safety issues, which in turn impacts their social and economic empowerment.

Almost a billion women of employable age are not part of the formal workforce, and women routinely contend with issues such as insufficient support for entrepreneurship, gender pay gap, sexual harassment at the workplace and underrepresentation in top management – in both private and the public sectors.

Promoting women’s empowerment – both social and economic – has been the focus of significant development research, economic theorization and policy design globally.

Governments across the world have attempted to bridge gender gaps in social and economic spheres of the society. In the postcolonial era, governments in most developing countries prioritized interventions to tackle social issues such as child marriage and domestic violence and invested in the areas of right to education, women’s property rights and access to maternal benefits.

Over the last decade, policy interventions to promote women entrepreneurship and improved workforce participation were undertaken across the globe. Both developed and emerging countries have launched government schemes that route capital to women owned enterprises. Governments, in partnership with private actors, are also improving the entrepreneurship ecosystem for women to provide mentorship support, capital facilitation and access to markets.

Even though gender lens investing has shown some success in developed countries, there is a need to promote the practice and contextualize underlying strategies for application in developing countries.

Various factors such as wide-spread recognition of gender inequalities, increase in evidence of financial value creation through socio-economic empowerment of women, and improved policy environment are driving the adoption of gender lens investing.

Soko Directory is a Financial and Markets digital portal that tracks brands, listed firms on the NSE, SMEs and trend setters in the markets eco-system. Find us on Facebook: facebook.com/SokoDirectory and on Twitter: twitter.com/SokoDirectory

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