13 August 2018 | Report

Tailoring Finance for Women’s SMEs

Gender Lens Investing


This report discusses how financial instruments may be tailored to better meet the needs of women’s small and medium enterprises (SMEs).

Impact investors and impact funds actively invest in businesses seeking not only a financial but also a social or environmental return, yet to-date there has been little focus on women-led businesses. This report outlines the opportunities for impact investing to overcome the financing challenges faced by women’s SMEs and analyses the suitability of various financing structures to bridge the finance gap for women’s SMEs.

This report provides a background on Investing in Women (IW), gender lens investing, and a discussion on how financial instruments may be tailored to better meet the needs of women’s SMEs. Further, it provides commentary on IW’s partner SEAF, who recently launched the SEAF Women’s Opportunity Fund.

Themes in this paper are general and refer to emerging economies in Southeast Asia; given the generalisation, commentary and issues identified will vary on a country-to-country basis.

This report was published by Ernst & Young with support from Investing in Women.


  • Three of the key challenges women entrepreneur face in raising capital are: unconscious investor bias, reduced available collateral, and limited access to financial services.
  • Equity was generally identified by investors as the appropriate instrument for SMEs, given the perceived risk associated with the SMEs’ life stage and the higher-return profile an equity investment provides.
  • However, the same market study together with market feedback found that women’s SMEs are generally less likely to prefer equity because of equity and venture capital channels tending to be dominated by men, from decision makers through to distribution.
  • Mezzanine and quasi-equity bridges the gap between equity and debt and may be attractive to women’s SMEs for a number for reasons including lower collateral requirements compared to debt and lower equity dilution compared to equity.
  • There is an opportunity for impact investors to utilise a gender lens approach in their ongoing investment thesis to help strengthen the financial ecosystem for women in business, and in turn, act to spearhead the campaign for women’s economic empowerment.

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