Global Gender-Smart Fund (GGSF)

World’s largest gender-lens fund starts operating with new investment strategy to help address the USD1.7 trillion gender gap

Luxembourg, 13 June 2024 – The Global Gender-Smart Fund (GGSF), the world’s largest gender-lens investment fund, has implemented a new strategy focused on gender-smart financing. This strategy aims to address the USD1.7 trillion gender gap by providing responsible financial services to underserved women, women-owned, and women-led businesses in developing markets. It seeks to improve livelihoods, promote women’s leadership, and enhance gender balance within financial institutions.

Building on a successful 15-year track record, the Microfinance Enhancement Facility (MEF), initially founded in 2009, was transformed into the Global Gender-Smart Fund (GGSF) on 1 January 2024, introducing a new gender-focused strategy as well as a new structure.

Since MEF’s inception – originally intended as an emergency response vehicle to the global financial crisis – the Fund evolved and successfully provided liquidity to the microfinance sector across the developing world, focusing on low-income households and micro-entrepreneurs with average end-borrower loan sizes of USD1,700 and high outreach among women and rural populations. Over the past 15 years, the Fund has supported over 320 financial institutions across 65 countries, with an average loan size of USD3.5 million, reaching USD3 billion invested by end of 2023.

As the Fund transitions into its new mandate, Ruurd Brouwer, Chairman of the Board, explained: “The Fund’s founding shareholders, the Federal German Ministry for Economic and Cooperation and Development (BMZ), the German development bank KfW (both as trusted for BMZ, but also investing its own funding), the International Finance Corporation (IFC), and the Development Bank of Austria (OeEB), have been instrumental in defining the Fund’s new impact focus. The Board is looking forward to providing oversight and support to the world’s largest gender-lens investment fund, addressing the USD1.7 trillion gender gap through financial inclusion.”

“Since the Fund’s inception, the microfinance industry has matured and financial inclusion efforts have shifted,” said Tomasz Telma, Director & Global Head of the Financial Institutions Group at IFC. “The Fund’s new strategy to focus on gender-smart financing and to expand focus beyond microfinance to small enterprises as well is adapting to the current environment and also aligns with IFC’s priorities, including the focus on gender finance, which greatly supported IFC’s renewed commitment.”

The new strategy focuses on strengthening the provision of gender-smart and responsible financial services concentrating on underserved women as well as women-owned and women-led businesses in developing markets, thereby seeking to improve livelihoods, increase gender balance and outreach, and promote women’s leadership. Additionally, the Fund aims to improve gender equality at the level of the financial institutions themselves: On the one hand, by improving the gender-balance at senior level, on the other hand by improving working conditions for women. In this dual approach, the Fund aims to build on the 2X criteria, a global baseline standard for gender finance (2xchallenge.org/2xcriteria) and seek 2X Certification for its investees.

“As one of the initial shareholders, we have seen the Fund grow and adapt to the realities of the market, and the clear intention and additionality of this gender-smart strategy naturally led to OeEB renewing its commitment to continue supporting the provision of impactful financing in regions where it is most needed”, said Sabine Gaber, Member of the Executive Board of OeEB.

In order to support the Fund’s new mission, a technical assistance facility has been set up, with initial funding provided by the fund’s largest shareholder, BMZ. Such a facility will foster engagements with partner financial institutions on critical areas of improvement that are identified during due diligence, thus supporting financial institutions in designing and implementing a concrete gender-smart action plan.

Dirk Meyer, Head of Directorate-General Multilateral Development Policy; Transformation; Climate at BMZ indicated: “Germany remains a strong supporter of impact investment. The revised investment strategy of the GGSF sends a signal to the financial markets that there is the willingness and the opportunities to tackle the funding gap for women and female entrepreneurs in emerging markets and developing economies. The technical assistance facility is an important step to support partner financial institutions in strengthening their gender lens.”

Stephanie Lindemann-Kohrs, Global Head of Equity and Funds at KfW Development Bank emphasized: “We are very proud of the ambitious strategy that is being implemented with a very clear purpose: Building on a strong blended finance structure to tackle the funding gap faced by women in developing markets through innovative financing solutions”.

The Fund also attracted strong private sector interest, in particular from M&G Investments which has provided USD120 million in senior notes to support the growth of the portfolio.

Eoin O’Shaughnessy, Co-Head of Structured Credit Research at M&G Investments, says: “We are proud to be one of the largest investors in the Global Gender-Smart Fund – a unique and innovative vehicle that combines financial returns with social impact. By investing in financial institutions that empower women and promote financial inclusion, we are supporting the economic development and resilience of some of the world’s poorest communities. This investment also demonstrates how different parts of M&G can work together to provide our clients with access to a diverse and attractive range of opportunities across different asset classes and geographies.”

The new strategy and structure became effective as GGSF on 1 January 2024. Innpact Fund Management, the Alternative Investment Fund Manager (AIFM) in Luxembourg dedicated to impact finance, serves as fund manager and global portfolio manager. Innpact Fund Management is a 100% subsidiary of Innpact S.A. The sourcing, relationship management, and investment decision is conducted by three portfolio managers, Incofin, responsAbility and Triple Jump, all three leading impact investing specialists with extensive global experience. The technical assistance is provided through a streamlined process by a global consortium formed by NIRAS A/S and Women’s World Banking, both gender specialists with extensive experience in the implementation of projects supporting gender equality.

Patrick Goodman, Founding Partner at Innpact, reiterated: “The great collaboration of the different parties in the Fund – shareholders, investors, portfolio managers, service providers – is an impressive achievement and it is inspiring to see such great industry leaders coming together to serve a common impactful objective. We expect this evolution of the Fund will be transformational in addressing gender issues through financial inclusion thanks to the breadth of countries and financial institutions the fund invests in. The strong blended finance structure of the Fund, preference for local currency financing, and support from committed DFIs and donors, will enable additional private sector financing, allowing the Fund to grow and increase its impact on women in developing markets.”

About BMZ

The Federal German Ministry for Economic Cooperation and Development (BMZ) is in charge of German development policy. This includes the coordination of Germany’s financial and technical assistance in emerging and developing economies on behalf of the German Government. BMZ is headed by Minister Svenja Schulze who pursues, inter alia, a feminist development policy aiming to eliminate discriminatory structures – for women and girls, and also for marginalised groups. It is only societies in which all people enjoy equal participation in political, economic and social life that are stable and peaceful.

For more information, visit www.bmz.de

About IFC

IFC — a member of the World Bank Group — is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2023, IFC committed a record USD43.7 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises.

For more information, visit www.ifc.org.

About KfW Development Bank

KfW, founded in 1948, is the German promotional bank and one of the world’s leading promotional banks. It is 80% owned by the Federal Government and 20% by the federal states.

KfW Development Bank carries out Financial Cooperation (FC) projects with developing countries and emerging economies on behalf of the German Federal Government, especially of the Federal Ministry for Economic Cooperation and Development (BMZ). KfW Development Bank employs approximately 1,200 people at the head office in Frankfurt am Main and over 400 specialists at more than 60 international locations, who cooperate with partners all over the world. Their goal is to combat poverty, secure peace, protect the environment and the climate as well as ensure fair globalisation. KfW Development Bank is a competent and strategic adviser for current development policy issues.

For more information, visit www.kfw.de

About OeEB

Oesterreichische Entwicklungsbank AG (OeEB) has been the development bank of the Republic of Austria since 2008 and is wholly owned by Oesterreichische Kontrollbank AG. As a specialized institution, it finances private investment projects in developing and emerging countries, which must be both economically and developmentally viable. In addition to projects, it supports programs that achieve additional development effects.

For more information, visit www.oe-eb.at

About Innpact

Headquartered in Luxembourg and with a presence in Mauritius, Innpact is an impact investing platform since 2007 which offers specialised advisory services in the establishment and management of impact finance funds.

Innpact is the Alternative Investment Fund Manager and Global Portfolio Manager of the Global Gender-Smart Fund since 1 January 2024. Innpact was already at the origin of the Fund as it assisted KfW, IFC and OeEB in establishing it under its original form, the Microfinance Enhancement Facility, in February 2009 and in managing it since then.

For more information, visit https://innpact.com

About M&G Investments

M&G Investments is part of M&G plc, a savings and investment business which was formed in 2017 through the merger of Prudential plc’s UK and Europe savings and insurance operation and M&G, its wholly owned international investment manager.  M&G plc listed as an independent company on the London Stock Exchange in October 2019 and has £343.5 billion of assets under management (as at 31 December 2023). M&G plc has customers in the UK, Europe, the Americas and Asia, including individual savers and investors, life insurance policy holders and pension scheme members.

For nearly nine decades M&G Investments has been helping its customers to prosper by putting investments to work, which in turn creates jobs, homes and vital infrastructure in the real economy. Its investment solutions span equities, fixed income, multi asset, cash, private debt, infrastructure and real estate.

M&G recognises the importance of responsible investing and is a signatory to the United Nations Principles for Responsible Investment (UNPRI) and is a member of the Climate Bonds Initiative Partners Programme.  M&G plc has committed to achieve net zero carbon emissions on its total book of assets under management and administration by 2050 and committed to reduce operational carbon emissions as a corporate entity to net zero by 2030.

For more information, please visit: https://global.mandg.com/

About Incofin

Incofin is a leading impact investing specialist and one of the core portfolio managers of GGSF, bringing extensive global experience to the fund. With a strong focus on financial inclusion in emerging markets, Incofin has successfully supported numerous microfinance institutions worldwide. Their expertise in sustainable investment practices aligns seamlessly with GGSF’s mission to enhance gender balance, support women entrepreneurs, and promote inclusive economic growth.

Based in Belgium, Colombia, Kenya, India, and Cambodia, the Incofin team has invested USD3 billion over the past 20 years and currently manages USD1.4 billion in assets. Incofin’s investor base includes development banks, institutional investors, family offices, and private individuals, all committed to driving inclusive progress and sustainable transitions through a social, gender, and climate lens.

For more information, visit https://incofin.com

About responsAbility

responsAbility Investments AG is a leading impact asset manager specializing in private market investments across three investment themes to directly contribute to the United Nations Sustainable Development Goals (SDGs): Financial Inclusion, to finance the growth of Micro & SMEs; Climate Finance, to contribute to a net zero pathway; and Sustainable Food, to sustainably feed an ever-growing population. All responsAbility investment solutions target specific measurable impact alongside market returns. Since its inception in 2003, responsAbility has deployed over USD15.4 billion in impact investments. With over 270 employees collaborating across eight offices, as of 31 May 2024 the company manages USD5.0 billion in assets across approximately 280 portfolio companies in around 70 countries. Since 2022 responsAbility is part of M&G plc, the international savings, and investments business, and contributes to enhancing M&G’s capabilities in impact investing.

For more information, visit www.responsability.com

About Triple Jump

Triple Jump, founded in 2006, is an impact-focused investment manager dedicated to creating positive change in emerging markets. Managing and advising on funds that generate both financial returns and social impact, Triple Jump operates across five key development themes: financial inclusion, SME finance, affordable housing, access to clean energy, and climate and nature. With a global presence and local expertise, the firm manages over €1 billion in assets, supporting projects that contribute to sustainable and inclusive financial sectors. Recognizing gender equality as both a fundamental human right and a catalyst for sustainable development, Triple Jump integrates a gender lens across its investment strategies, prioritizing women-owned or women-led enterprises and businesses that promote women’s economic empowerment and leadership diversity.

For more information, visit www.triplejump.eu.

About Niras and Women’s World Banking

The consortium NIRAS / Women’s World Banking is the Preferred Technical Assistance Provider for the Global Gender-Smart Fund.

NIRAS is an international multi-disciplinary consultancy firm headquartered in Denmark. The largest of its Business Units is NIRAS International Consulting, which specializes in providing services in development cooperation to international financial institutions, bilateral, and multilateral partners. NIRAS has a fixed presence in 34 countries across a network of 62 offices in Europe, Africa, Asia Pacific, and Latin America.

For more information, visit www.niras.com

Women’s World Banking is an NGO that, for over 45 years, has been dedicated to serving the nearly 1 billion women excluded by the formal financial sector. It provides strategic support, technical assistance and information to financial institutions and policymakers to design, develop and implement services that facilitate systemic change for low-income women in emerging economies.

For more information, visit www.womensworldbanking.org