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Authors: Melanie Levine and Erin Sweeney Committee Members, Women in Agriculture Asia (WOMAG)

Women in Agribusiness Asia (WOMAG) recently partnered with Grow Asia and the OECD Centre for Responsible Business Conduct in a webinar “Responsible Agricultural Investing in Southeast Asia.” Webinar speakers discussed perspectives on due diligence and the responsibilities of investors in financing agriculture and forestry supply chains. 

In this blog, we aim to demonstrate the importance of applying a gender-lens across the finance pipeline. We address how responsible financing can impact women, particularly smallholders and explore how investments in women in agriculture are implemented in Asia, as well as the challenges that exist, and how to overcome them. We also provide a set of tools to support responsible investing and share how agribusiness professionals can engage on these topics in Southeast Asia with WOMAG.

What is Responsible Finance? 

Responsible financing models, platforms and activities have skyrocketed in the last few years. Trends show that stocks with sound environmental and social targets may fare better than those without these targets, even in times of crisis. There are many definitions and “types” of responsible (or sustainable) investments, which vary among asset managers, impact investors, commercial lenders, and third-party auditors. At the basic level, a claim of responsible finance indicates that investments catalyze positive outcomes alongside financial returns. Responsible finance can also help investors reach their sustainable development goal (SDG) targets.

Investing in Women in Agriculture

In Southeast Asia, there is growing interest in one responsible financing approach that focuses on women’s economic empowerment, often called “gender-lens investing.” Gender-lens investments can include deploying capital to women-owned enterprises, women-led businesses, and companies which center women and girls as part of their business model (among others). Of course, a financial return is also expected. 

There are many international and regional standards and resources available to guide gender-lens investment in agriculture, as it is broadly recognized as a critical lever for women's empowerment and sustainable development. A few key documents are linked in the resources section at the end of this piece.

Women account for just over 40% of the agricultural labor force. Yet, women in forestry, agriculture and fisheries receive just 7% of agricultural investment. Women in the agriculture sector face significant barriers in accessing finance, especially in rural economies. These constraints vary across cultures and geographies, depending on entrenched gender norms, sex-based laws and regulations, and access to education. Women often spend more time managing their households, which limits the hours allotted to engage in financial endeavors. Further, banks may not view women as legitimate clients, assuming their primary responsibilities are in the domestic sphere and that they can rely on spouses or fathers for resources. 

Women have fewer opportunities and legal protections than men for owning property, opening bank accounts, or earning higher incomes that can be used as collateral in financial transactions. In more extreme cases, women have trouble obtaining the identification documents necessary for accessing financial services in the first place. Illiteracy levels are highest among rural women, who historically achieve fewer years of education than men. In turn, women can struggle to understand what financial products and services exist and how they can navigate the system to access these opportunities. Responsible finance models can accelerate access to finance, credit, and financial literacy among women smallholders, while creating a larger pool of bankable clients and return on investment.

Cases from Asia 

In Singapore, the Women’s Livelihood Bond (WLB) was arranged by the Impact Investment Exchange (IIX) in 2017. The bond is evaluated based on SDG-linked metrics, including Goal 5 (Gender Equality) Goal 8 (Decent Work and Economic Growth) and Goal 17 (Partnerships for the Goals). The WLB aims to empower 385,000 women in Cambodia, Vietnam and the Philippines through enhanced access to credit, market linkages, and affordable goods and services. With US$8 million raised, the bond demonstrates interest among international investors for responsible gender-lens financing.

In China, fintech conglomerate CreditEase launched a public welfare program called YiNongDai to fight poverty and empower women. YiNongDai has reached 200,000 rural women farmers in Henan Province so far, matching with clients through local NGOs and cooperatives and using phone apps equipped with blockchain technology. Small loans of up to Rmb 20,000 help these women diversify crops, buy livestock, or develop businesses such as shops at interest rates of 2% to 10% depending on the context. Zhang Yanbin, chairwomen of the Nanmazhuang Ecological Agricultural Products Cooperative, says of the program: “Funding inspires left-behind women to do something positive. Previously they have children to take care of and cannot do anything else, especially between the [planting and harvesting] seasons...But when they have funding, they begin to think about doing something: they develop a start-up spirit.”

International NGO Mercy Corps created the “Building Resilience Through the Integration of Gender and Empowerment” (BRIGE) project in Indonesia’s West Nusa Tenggara Province aimed to drive inclusive microfinance. Mercy Corps connected Bank Perkreditan Rakyat (national rural bank) with women’s farming cooperatives. The bank developed flexible and gender-responsive administrative policies as well as group-based mobile services, and conducted bespoke training sessions around the benefits of savings and maintaining a strong financial history. After participating in the BRIGE project, one woman farmer said, “I now realize that saving money under the pillows must be replaced with saving money at the bank.” 

Looking Ahead

Responsible finance is a key enabler to drive progress towards the SDGs and ensure gender equity, especially in agriculture, a sector that relies heavily on women’s labor and stands to make strong gains by fostering and harnessing an entrepreneurial spirit in women.

And while investing in women farmers and agripreneurs is a core element of responsible finance, a gender-lens should be applied across the finance pipeline to include those who decide where capital is invested. At the end of 2019, the majority (65%) of venture capital firms globally did not have a single woman partner (although this is improving). Many organizations, including the OECD, Grow Asia and WOMAG are placing increasing importance upon building capacity among industry professionals, including women, to drive responsible finance. 

Resources for Responsible Finance

  • The OECD-FAO Guidance for Responsible Agricultural Supply Chains provides a sector-specific guide for companies through a five-step framework for risk-based due diligence. This guidance calls for enterprises to: help eliminate discrimination against women; enhance their meaningful participation in decision-making and leadership roles; ensure their professional development; and facilitate their equal access and control over natural resources, inputs, tools, a financial services, training, markets and information. 

  • The OECD Due Diligence Guidance for Responsible Business Conduct provides clarity on how companies and the financial sector can integrate gender-lens into their due diligence process. Investors can ask whether companies consider how actual and potential adverse impacts may differ for or be specific to women. 

About 

WOMAG is a women-run and volunteer-led association of professional women and men committed to creating an inclusive community of food and agribusiness professionals. Our mission is to foster the insights required to address the challenges facing the industry in Southeast Asia and build a pool of future leaders for our industry. Their community includes a wide range of individuals from the entire food and agribusiness ecosystem.