Accelerating gender responsive innovative financing for sustainable development

Financing mechanisms to enhance development impacts

D6
Lab debate
Tuesday, June 18, 2019
15:15 to 16:30

The cost of solving the world’s most critical problems runs into the trillions—including an estimated $2.5 trillion annual funding gap needed to achieve the SDGs. Innovative financing is now recognized by multilaterals and national governments as a central solution to this challenge, a view increasingly shared by civil society and the private sector. This session will explore how financing mechanisms – such as public-private partnerships, sectoral and thematic bonds, gender-responsive investments, risk mitigation tools and repayable contributions – can be used to enhance the development impacts of international assistance programming, with a particular focus on women’s economic empowerment and gender equality. It will also delve into indicators to measure progress, and possibilities for joint or complementary strategies, including capacity building.

Key points

  • Significantly increased investment will be required to achieve the Sustainable Development Goal (SDG) 5 objectives of gender equality and female empowerment.
  • Gender equality and female empowerment also helps other development goals, including poverty reduction and economic growth.
  • Innovative financing approaches are needed; new partners and funding sources must be found; greater efficiencies obtained, and efforts must be more result oriented,
  • Efforts to increase gender responsive investments should be evidence-based and challenge existing biases.

Synopsis

Significantly increased investments will be required to achieve SDG 5’s objectives of gender equality and empowerment of all women and girls. They are focusing on gender-responsive investment cuts across other development objectives because women are also disproportionately poor; women are also migrants, refugees and internally displaced persons; and they are also young. According to the Organisation for Economic Co-operation and Development (OECD), the full tool box of development financing must be used, including (1) mobilising financial resources from all sources dedicated to gender equality and female empowerment; (2) integrating gender equality into all development investment, public and private; and (3) ensuring, at least, that development investments do not undermine gender equality and female empowerment. OECD analyses indicate that 38% of Official Development Assistance (ODA) integrates gender equality, but only 4 % of ODA is dedicated to gender equality programmes. Data reported to the OECD from philanthropic foundations shows that only 16 % of financing targets gender equality. Innovative financing approaches are needed to achieve the SDGs. New partners and funding sources must be found; greater efficiencies must be obtained; and efforts must be more result-oriented. “Gender lensed” investing is currently receiving much attention. It means considering gender impacts in investment decisions. One result is increased investment in female-owned businesses; another is investment in businesses producing goods and services that improve the lives of women and girls. A further result is considering the risk of gender-based violence in investment decisions. Women investors are increasingly making investments with a gender lens. Female and male participants in pension funds can encourage their funds to make gender-lensed investments. Efforts to increase gender responsive investments should be evidence-based and challenge existing biases. Loans to women are not necessarily high risk. Equality advocates should work with fund managers and loan officers to understand why many women entrepreneurs often do not complete business plans. The reasons could be lack of experience requiring skill development, or lack of trust in male dominated financial institutions requiring trust building. Care should be taken to uncover implicit and subconscious biases. The burden should not be placed on female loan applicants to prove they can repay loans when a similar burden is not placed on male applicants. Laws that inhibit women’s access to financing should be reformed, such as laws that bar women from property ownership. Government guarantees can help de-risk loans to female applicants. European Union efforts to increase gender-responsive financing focus on three pillars: (1) blending public and private sources of financing; (2) improving the business climate, and (3) providing technical assistance. Technical assistance should include support for people who have good business ideas, but do not know how to present them persuasively.

Insight

Financing gender equality and female empowerment helps everyone, not just women.

Organised by

Speakers

Moderator
Elissa Golberg
Assistant Deputy Minister
Global Affairs Canada
Félix Fernández-Shaw
Director
European Commission DG DEVCO
Rachel Turner
Director of Economic Development
DFID, Government of the United Kingdom
Haje Schütte
Senior Counsellor & Head of Financing for Sustainable Development Division
OECD
Christina Madden
Director for Engagement
Criterion Institute