MICROCAPITAL BRIEF: DFC Boosts 2X Women’s Initiative Goal to $12b; Adds Climate, Technical Assistance Components; Announces Women’s World Banking (WWB) Fund Partnership

The government-backed US International Development Finance Corporation (DFC) recently announced a set of initiatives to boost its promotion of gender equity, including: (1) an increased goal of investing USD 12 billion in women over five years through its 2X Women’s Initiative, which supports “investment in projects that are owned by women, led by women, or provide a product or service that empowers women;” (2) launching a 2X Technical Assistance Pilot Program to help the private sector boost gender equity “such as [by] increasing the number of women in leadership or developing products or services designed specifically to meet the differentiated needs of their women clients;” (3) plans to “invest in climate solutions that address the disproportionate impact of climate change on women and girls” in collaboration with other development finance institutions (DFIs); and (4) improving DFC’s qualitative methods for measuring the impact of gender-focused investments.

Additionally, DFC and the EU’s European Investment Bank (EIB) have named the Women’s World Banking (WWB) Capital Partners II fund of the US-based nonprofit WWB as a 2X Challenge Pioneer Flagship Fund “for its commitment to promote and maintain gender balance…and to invest with an explicit and intentional gender lens strategy” in Asia, Latin America and Sub-Saharan Africa. DFC and EIB both back the fund and its “goal to shrink the gender gap in financial inclusion in emerging economies.”

The 2X Challenge, which was initiated in 2018, encourages investments in access to finance for women-owned, women-led and women-supporting enterprises in developing countries and emerging markets. Among the criteria for an organization to receive investments from the 2X Challenge are a minimum of: 51-percent woman ownership, 20 percent of the entity’s senior leadership being women, or a 30-percent share of women staff. The 15 members of the 2X Challenge are DFIs controlled by the governments of Japan and various countries in Europe, and North America.

WWB Capital Partners II is an investment fund with a target volume of USD 100 million. Its purpose is to improve women’s financial inclusion by investing in financial service providers that cater to low-income women.

WWB was founded in 1979. In partnership with 49 institutions in 31 countries in Africa, Eurasia, Latin America and the Caribbean, WWB “designs and invests in the financial solutions, institutions, and policy environments in emerging markets to create greater economic stability and prosperity for women, their families and their communities.” This work falls into the following themes: Women’s Market Strategy, Digital Product Introductions, Digital Product Optimizations, Non-financial Services, Women-centered Design, Leadership Development, Research, and Policy and Advocacy. In December 2019, the NGO reported total assets of USD 38 million and 12-month revenue of USD 16 million.

DFC was launched in 2020 to “help businesses expand into emerging markets, foster growth and improve lives in the developing world while reinforcing US foreign policy and national security interests.” The organization issues equity placements, insurance, technical assistance and research in areas such as “energy, healthcare, critical infrastructure and technology.” Upon its founding, DFC took over the work of the Overseas Private Investment Corporation (OPIC) as well as the Development Credit Authority of the US Agency for International Development. During 2020, DFC brought in net income of USD 232 million, closing the year with assets of USD 12 billion.

EIB, founded in 1958, is “focused on innovation, SMEs [small and medium-sized enterprises], infrastructure and climate,” primarily in EU member states and potential future member states. In addition to funding, the institution “adds value in project implementation and the modernisation of public policies thanks to its technical and financial expertise and advisory services.” As of December 2020, its total assets amounted to EUR 554 billion (USD 675 billion) with disbursements during the previous year totaling EUR 58.3 billion (USD 71 billion).

By Harriet Ritchie, Research Associate

Sources and Additional Resources

DFC press release
https://www.dfc.gov/media/press-releases/dfc-announces-ambitious-new-commitments-gender-equitable-financing

EIB press release
https://www.eib.org/en/press/all/2021-245-women-s-world-banking-capital-partners-ii-supported-by-dfc-and-eib-becomes-2x-challenge-pioneer-flagship-fund

2X Women’s Initiative homepage
https://www.dfc.gov/our-work/2x-womens-initiative

2X Women’s Initiative webpage
https://www.dfc.gov/our-work/2x-womens-initiative

2X Challenge homepage
https://www.2xchallenge.org/

WWB homepage
https://www.womensworldbanking.org/

WWB financials
https://www.womensworldbanking.org/our-financials/

DFC 2019-2020 annual report
https://www.dfc.gov/sites/default/files/media/documents/DFC_2020_Annual_Report.pdf

EIB financial report 2020
https://www.eib.org/attachments/general/reports/eib_financial_report_2020_en.pdf

Did you know that MicroCapital publishes the MicroCapital Monitor newspaper each month? Find out more at https://www.microcapital.org/products-page/.