From Philanthropy to Impact Investing: The Role of Women Investors in Asia

By Weina Li

There is a historical gender-bias in investment and finance, with women often considered “too soft” and “not enough returns-focused”, whereas their comparative strengths in leadership positions and their importance as key consumer is often overlooked. This explains the extremely low proportion of women investors across the globe, and especially in Asia.

However, the trend is changing. This is in part due to the increasing number of female high net worth individuals; they are high breadwinners, entrepreneurs but also heirs of a considerable proportion of Asia’s wealth. Even more important, is the increasing number of educated women in Asia. According to a 2008 survey, more than half of women with business degrees out-earn their husbands. This is especially true in countries such as Bangladesh, where more and more women gain access to higher education, achieve higher income and bring the region one step closer to inclusive growth and sustainable development. What’s more, women have become savvy investors. Research shows that 70% of married women fire their financial professionals within one year of their husband’s deaths.

For impact investing in Asia, this is good news. IIX Shujog’s database shows that women investors are more socially-minded and tend to focus on more human-centric investments such as health and education, rather than technology-focused energy businesses. Most importantly, women’s strong relationship with philanthropy means that they tend to donate more of their wealth to philanthropic means than men. As the world’s attention turns towards the development potential of social capital markets in the region, this creates an opportunity of transferring large amounts of wealth from the philanthropy sphere into impact investing.

There are still a number of challenges. Studies show that at present, women investors tend to take money for impact investing from their traditional investment buckets instead of decreasing their philanthropy dollars. This is due to the limited knowledge and lack of confidence in impact investing, exacerbated by the lack of familiarity of traditional financial advisors in this new field. There is also a lack of tools to help investors decide how and where to invest.

To fully capitalize on the potential of women in impact investing, more effort is needed to help provide the information women need to become confident impact investors. Shujog and IIX are working together to translate this need into action in Asia through investor education, knowledge building and developing appropriate investment tools to help more women become key contributors of Asia’s social capital markets.

About Weina Li

Weina Li is the head researcher at Impact Investment Shujog, a Social Enterprise seeking to foster growth, maturity and innovations to the SE and Impact Investment sectors of Asia. Weina has extensive experience working with SMEs and Social Enterprises across the globe. Among other projects, Weina has led an impact assessment project in the Peruvian Andes, working with Alpaca farmers to help them enhance their economic capabilities and setting up a women’s handicraft social enterprise. She is now spearheading Shujog’s research projects on women and impact investing. Weina has a BSc in Environmental Policy and Economics from the London School of Economics and a MSc in Environmental Change and Management from the University of Oxford.

This article was first published on The Story Exchange and is distributed with the permission of the writer.

[Image credit: 123rf]

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