By Indigo Elliot Phibbs, BIDUK MEL Specialist

Gender has long been a hot topic in impact investing. With a growing number of people using social and environmental lenses to inform their investment decisions, gender has taken centre stage in social considerations. But how do we make sure that this inclusion is not tokenistic? How do we ensure that investors that claim to promote gender equity are actually creating meaningful opportunities for women? 

BIDUK is a financial intermediary working with small and growing businesses (SGBs) in Indonesia. We offer flexible, tailored financial products to better serve the needs of these businesses and encourage their sustainable growth. 

The BIDUK model has been designed with an acute awareness of the historical gender bias in SGB financing. At BIDUK, we’re committed to going beyond a compliance-oriented approach of targeting women to ‘tick off’ predetermined goals. We like to think of this as going beyond counting women to actually valuing women. 

Here are three ways that valuing women is enshrined within BIDUK’s model: 

Women are strong and capable business leaders. At BIDUK, we acknowledge and celebrate that as fact. The business case for women business owners has been made time and time again. As Sagana’s Gender Lens Investing Landscape report (2020) summarises, “women’s entrepreneurship is widely considered as a key to economic stability and GDP growth and sustainable development, as well as a source of innovation and business strength.” Among recent evidence of this, Calvert Impact Capital (2018) found that companies with the highest percentages of women in leadership positions had far higher return on sales, assets and equity compared to more male-dominated firms.

Among other evidence: 

• A 2016 study from the Credit Suisse Research Institute entitled The CS Gender 3000 found that companies with more women outperformed those with fewer, where the best-performing cohort was the group of companies with greater than 50 percent women in senior management. 
• A 2017 report from the IFC found that women business owners offer significant advantages for their businesses including opening new markets, leveraging unique assets and abilities and strengthening and diversifying supply chains.

Women have proven themselves to be capable business leaders and the BIDUK model positions them as such. By tailoring financial products to their individual businesses, we are acknowledging that it is often the financial institutions that need to do the extra leg work. Forcing women business owners to retrofit their financing needs into rigid loan products can be hugely detrimental. 

Removing gender bias from the lending process. BIDUK has taken pragmatic steps to eliminate gender bias, such as removing the need for spousal consent and offering uncollateralized lending. We have also created a due diligence process that is centred around the client’s individual needs and their cash flows. This means, regardless of gender, we can assess all clients to the same standard. 

Advocating for the value of gender equitable policies and practices. There is much evidence showing the positive impacts of businesses’ embedding gender equity into their policies and practices. Value for Women’s Gender Lens Investing in Southeast Asia report (2021) argues that having gender-forward policies and practices, such as gender-balanced teams, improves employee engagement, brand awareness, and client retention.. 

BIDUK values women beyond investing in their businesses. We advocate for these policies with the clients that we work with. However, rather than imposing such changes on businesses, BIDUK aims to initiate a process of reflection so that clients raise their awareness about the ways gender equitable policies and practices could benefit them. Then, changes are internally motivated and much more likely to be sustained in the long run.