Challenge:
An estimated $300 billion gap in financing exists worldwide for women-owned small businesses, and more than 70 percent of women-owned small and medium enterprises have inadequate access to financial services. Investing in the untapped potential of women will not only improve the lives of women: it can lead to stronger, more inclusive global economic growth. Women’s economic empowerment has been shown to increase national incomes, lower overall rates of income inequality, and bolster financial sector resiliency.
Solution and Impact:
A DFC loan of $10 million provided first loss capital to the Impact Investment Exchange (IIX) Women’s Catalyst Fund to help launch Women’s Livelihood Bond™ (WLB) 5: the world’s first Orange Bond.
Orange Bonds—named after the color of Sustainable Development Goal 5: Gender Equality—represent a new asset class designed to build a gender-empowered financial system. The Orange Bond Initiative™, led by IIX, aims to empower 100 million women and girls worldwide by unlocking $10 billion in capital by 2030.
WLB5 invests in small businesses that empower women in emerging markets across Africa, South, and Southeast Asia. As an Orange Bond, WLB5 adheres to proven gender lens investing methods with high standards for capital allocation to women, diversity in leadership, and transparency in both investing and reporting.
DFC is committed to supporting women’s economic empowerment through its 2X Women’s Initiative. Through its role in the Orange Bond Initiative™, the agency is at the forefront of global efforts to close the gender financing gap in emerging markets. DFC serves on the steering committee that devised the Orange Bond Principles, which were published in October 2022 and lay out criteria and best practices for Orange Bond financing.