LUXEMBOURG
PATRICK SCHEURLE

BlueOrchard focuses on the empowerment of female entrepreneurs through its microfinance investments. Closing the credit gap in just 15 countries in the ASEAN region by 2020 could result in a 12% increase in per capita income by 2030.

Despite considerable efforts over recent years, gender inequality is still a consistent feature of modern society. From lack of access to decent work and gender pay gaps to underrepresentation politically, considerable challenges continue to exist when it comes to achieving parity and meeting the UN’s sustainable development goal for gender equality. This is particularly true when it comes to the developing world, where women are still often excluded from the workforce and 56% of the 1,7 billion unbanked adults are female.

Photo: BlueOrchard - Lëtzebuerger Journal
Photo: BlueOrchard

As former Secretary-General of the UN, Kofi Annan, said: «There is no tool for development more effective than the empowerment of women.» It is not just that striving for equality between genders is the right thing to do, although this is undoubtedly true. It has been proven that empowering women economically and socially leads to stronger economies and a better quality of life, not just for women, but for their families, communities, and ultimately for society as a whole.

There is also strong evidence to show that women can offer different benefits to men from an investment perspective. In particular, investment in female entrepreneurs tends to have a more significant social impact. This is partly because women are more likely to spend their money on the needs of their children and communities, on things like education, food and healthcare, rather than purchasing consumer goods. Investing in female-owned businesses can also reduce the financial risk associated with the investment. Women tend to be more risk averse and cautious with their financial decisions than men, which reduces the likelihood of them defaulting on credit.

Dedicated Women Empowerment Fund

These are just some of the numerous reasons why BlueOrchard has focused on the empowerment of female entrepreneurs through microfinance investments. Nearly 75% of the end beneficiaries in the flagship microfinance fund are female, and in 2016 a dedicated Women Empowerment Fund was launched, which aims to fight poverty and support female-owned businesses in South East Asia. Within this fund more than 90% of the end beneficiaries are women, with all of the microfinance institutions partner having a majority of female clients.

Asia is a particularly interesting area to focus on – we are seeing an increasing proportion of female micro-entrepreneurs across the region, particularly in economies like Myanmar, Indonesia, Malaysia, Thailand and Vietnam. Closing the credit gap in just 15 countries in the ASEAN region by 2020 could result in a 12% increase in per capita income by 2030. More broadly, the Asia Pacific economy could stand to increase by 89 billion dollars annually if women were able to achieve their full economic potential.

One example of the women that has been a beneficiary of our investment in Asia Pacific, is Daw Mya Mya Win in Myanmar. Daw Mya Mya owns a farming business located in Pa Tauk Tan Village. On top of running a business, she is also a mother of three children, all in full time primary education. In order to invest in her business, she had been pawning gold, which left her with high interest rates and short payback periods. In 2017, Daw Mya Mya applied for her first agriculture loan from a local microfinance institution. In addition to an initial loan of 500.000 Kyat (400 dollars), the loan office provided her with a financial literacy course, which empowered her to make smarter decisions about her finances. Daw Mya Mya has since steadily grown her business with the help of some additional small loans. She has expanded her farming operation to include more seasonal crops, and as a result has been able to increase her family’s living standards to such an extent that she no longer has to worry about whether she can afford education or healthcare for her children.

About BlueOrchard

UN initiative

BlueOrchard is a leading global impact investment manager. As a pioneering impact investor, we are dedicated to fostering inclusive and climate-smart growth in emerging and frontier markets, while providing attractive returns for investors. BlueOrchard was founded in 2001, by initiative of the UN, as the first commercial manager of microfinance debt investments worldwide. We offer premium impact investment solutions to qualified investors worldwide and provide debt and equity financing to institutions in emerging and frontier markets. Being an expert in innovative blended finance mandates, BlueOrchard is a trusted partner of leading global development finance institutions. BlueOrchard is a member of the Schroders Group. The British asset management company Schroders was founded in 1804. Today, it has more than 5.000 employees on six continents. Its headquarters are located in the heart of the City of London and it has also been present in the Grand Duchy of Luxembourg since 1991.