A group of women-led companies yesterday called for innovative financing within a variety of South African development finance institutions (DFIs) in a bid to support women in leadership, management, ownership and entrepreneurship.
Women-owned businesses in South Africa are still in the minority in spite of statistics showing that they present a lower risk for business financiers.
Jessica Espinoza, the chief executive of 2X Collaborative, called for gender lens investing to be a stand-alone focus in companies and not only be an aspect of environmental, social, and corporate governance (ESG), to maximise its advancement.
Espinoza said it had been proven that investors make superior returns when they invest in women-owned and led businesses.
“We would like to reach a state where gender lens investing has a similar status to ESG considerations due to its economic impact,” Espinoza said.
“2X Collaborative was set up precisely to try and work with international investors with DFI to encourage them to make gender lens investing as part of their day to day investment decision making process.”
Espinoza was speaking at the Women Economic Assembly financial summit hosted by the Industrial Development Corporation (IDC) in Johannesburg yesterday.
The IDC said it could not be the only bearer of equity risk capital and urged the nation to find ways of increasing the size of available equities of world capital, both for startups and women.
IDC chief executive Tshokolo Nchocho said their business doors were open for all women in business, with billions of rand in funding available to tap into.
“Our commitment is in the order of R9 billion runs over the next three years to advance to women-owned business. It's written in my performance contract. So please, I need you to help me to achieve this target,” Nchoncho said.
“R9 billion over the next three years that you would like to advance. And very easily the demand were to be higher, [there is] no doubt in mind, we have the balance sheet capability to be able to do that.”
The Women Economic Assembly aims to advocate for equal economic participation of women by focusing on industry supply chains.
South Africa’s largest asset management group, the Public Investment Corporation (PIC), admitted that more needed to be done to fund women-led companies.
PIC chief investment officer Kabelo Rikhotso said investment organisations had not been very intent on how they make sure that women benefit across the whole value chain of the investments that they make.
Rikhotso said the PIC was, however, allocating capital funding for women-led companies from both its listed and unlisted investments.
“As we provide capital to companies, we appoint women largely or on boards, but not just women, but women with disabilities. We have a team at the PIC that specifically looks out for these individuals, provided they are qualified,” Rikhotso said.
“As the PIC we have been provided with a new mandate of about R25bn, and of that R25bn we would like at least 50 percent to be spent in some form in activities that promote women, either at ownership level or providing equity capital to your businesses.”
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