ImpactAlpha, May 26 – A decade ago, investors pushed back against the loan products Jessica Espinoza was designing for female business owners as an executive at ProCredit Bank Nicaragua. Their argument: “There just wasn’t a market opportunity,” Espinoza tells ImpactAlpha.
This week, the 2X Challenge of development finance institutions and multilateral banks worldwide announced that it has helped mobilize over $27 billion in public and private capital for the express purpose of serving women and advancing women’s business leadership in emerging markets.
“We see a lot more interest from private sector and institutional investors,” says Espinoza, who leads the challenge as CEO of 2X Global, formed by last year’s merger of 2X Collaborative and GenderSmart. “It’s exciting to see the momentum.”
Commitments to gender-lens investing are barely a sliver of the more than $6 trillion controlled by development finance institutions and multilateral banks worldwide. Along with venture capital’s neglect of women-led startups and asset owners’ abysmal allocations to female asset managers, that means too few dollars (or euros, pesos, shillings and rupees) flowing to women.
Espinoza’s journey to gender-lens investing started in microfinance, which promised to uplift poor women.
“But women were seen as beneficiaries. They weren’t consulted on their needs,” Espinoza says. “Loan officers weren’t women, leadership and the people who designed the loan products weren’t women. It always felt like a double standard: wanting to see women grow larger companies but keeping them at this micro level.”
Espinoza went to ProCredit Bank Nicaragua to work on financial product design, then to DEG, the German development bank, to tackled investor-side barriers to women’s financial inclusion.
In 2018, Espinoza represented DEG at the launch of the 2X Challenge at the G7 summit. The effort exceeded its two-year goal of mobilizing $3 billion from DFI member institutions; members invested nearly $7 billion and catalyzed more than $4 billion more from other public and private investors.
This week, 2X Global announced an additional $16 billion has been committed to gender-lens investing since 2021. That $27 billion total represents a remarkable collective effort, says Espinoza.
“We didn’t set any individual targets,” she says. “The collective commitment was in the spirit of having a joint challenge, and leaning in and learning together.”
For the next phase, 2X Global is developing a 2X certification, which will require third-party data validation on companies, funds and portfolios. It will announce a new financial target later this year.
“What for me is really important is how to embed gender across the investment and business cycle with intentionality,” Espinoza says, “and making and proving gender as a driver of value.”