A major new commitment was announced this weekend by the development finance institutions (DFI) of the G7 to mobilize US $3 billion by 2020 for investment in business activities that will benefit women.
The 2X Challenge: Financing for Women ('2X Challenge' - see www.2XChallenge.org ), is an ambitious target that calls on DFIs to mobilize their own funds, as well as private capital, to unlock resources that will help advance women as entrepreneurs, as business leaders, as employees and as consumers of products and services that enhance their economic participation.
DFIs from the G7 countries - FinDev Canada, the United Kingdom (CDC), the United States (Overseas Private Investment Corporation - OPIC), Italy (Cassa depositi e presiti - Cdp), France (Proparco) and Japan (JBIC and JICA), with support from Germany (DEG) - will use innovative ways, including using blended finance, to support investments and initiatives that provide women in developing countries with access to leadership opportunities, quality employment, finance, enterprise support.
Nick O'Donohoe, CEO of the UK's CDC Group: 'The case for investing in women is clear. We believe that this initiative can help set the standard for how investors can target capital and influence to ensure that investee businesses achieve gender-balanced boards and management teams, finance women entrepreneurs, provide women access to decent jobs and build gender-smart products and services that serve women customers across the value chain. All while at the same time creating high development impact.'
Paul Lamontagne, FinDev Canada's Managing Director: 'Women are the cornerstone of development as they spend more on family expenses that improve livelihoods, like nutrition, medicine, and education. Investments that improve the lives of women and girls have been shown to have an impact not only on the individual, but on their families, their communities, their local economies and, as a consequence, countries along with them.'
Ray Washburne, President and CEO of the US's OPIC: 'The U.S. is thrilled to accept the 2X Challenge to invest in the world's women. OPIC has prioritized investing in women because we understand that when women succeed, families succeed, communities succeed, and nations succeed. By joining forces with the G7 DFIs, we are sending a powerful message to the markets that by investing in women we can change the world.'
Gregory Clemente, CEO of Proparco: 'Initiatives dedicated to women's empowerment such as microfinance or education have demonstrated their economic and social benefits for society at large. Proparco is proud to participate in this ambitious and collective push intended to fuel the global momentum for inclusive growth and gender equality.'
Fabio Gallia, CEO of Italy's Cassa depositi e prestiti: 'For CDP, as a long-term player in global development, women's empowerment is crucial. All the Sustainable Development Goals require a commitment on gender equality. From agriculture to education, from healthcare to entrepreneurship, investing in women's rights pays the highest dividends.'
Tadashi Maeda, CEO of JBIC: 'JBIC welcomes the launch of the 2X Challenge initiatives, which enhance the empowerment of women entrepreneurs and in the workforce internationally under G7 framework. We are looking forward to collaborating with all 2X Challenge participants.'
Shinichi Kitaoka, President of JICA: 'Promotion of women's business and entrepreneurship is the key to sustaining and to maximizing the social and economic development. JICA is committed to further investing in women's economic empowerment by exploring innovative approaches in partnership with our diverse stakeholders, while we enhance our support to achieve women's health and education, and the elimination of gender-based violence.'
The funds will support investments and companies that will provide women in developing countries with access to leadership opportunities, quality employment, finance, enterprise support and products and services that enhance their economic participation and inclusion.
The participating DFIs will host an online platform (www.2Xchallenge.org ) to publicly track progress among participants and will coordinate efforts made by other 2X Challenge participants. They will report back in a year on their success.
Studies have repeatedly demonstrated that women are key drivers to achieving economic prosperity and global stability.
In its 2015 report entitled The Power of Parity: How advancing women's equality can add $12 trillion to global growth, the McKinsey Institute forecasted a GDP growth opportunity of $700 billion for Sub-Saharan Africa and $2,600 billion for Latin America by 2025 if the gender gap is bridged.
A year later, in March 2016, the worldwide GDP growth forecast for 2025 went from $12 trillion to $28 trillion, according to the Stanford Social Innovation Review, if the gender gap is addressed.