The COVID-19 pandemic has profoundly impacted many lives across the globe. In this blog we focus on women. Worldwide, the pandemic has hit women harder than men. Women run a higher risk of COVID-19 contagion due to their occupations in health-related activities. They are also overrepresented in jobs where social distancing has been more difficult and where layoffs have been more common. Many women have had to interrupt their work for care-taking reasons. Moreover, women are often employed in micro and small enterprises with lower pay and weaker legal and social protection, and in informal activities where the situation is even more precarious. These factors have made the choice to leave the workforce much easier.

Labour participation rates are showing that women are dropping out of the labour market in record numbers, in a move that could become permanent. The longer women stay out of the labour market, the higher the risk of erosion of skills and permanent loss of income and perspective.

Prior to the pandemic, no country has been successful in fully achieving gender equality, as envisioned in the UN Sustainable Development Goals. But now, gender equality, as measured by the access to (high quality) education, labour force participation and female entrepreneurship, is further away than ever. Since the pandemic, girls in low-income countries are losing out on education in large numbers. Liberia, less than halfway to key gender equality targets, is seeing lower school enrolment numbers for girls than for boys as schools reopen after the lockdowns. Based on the experience and data of the 2014-15 Ebola crisis in Sierra Leona, the Malala Fund estimates that roughly 20 million more secondary school-age girls could be out of school after the COVID-19 crisis has passed.   

Inclusive finance can help to make the post-pandemic recovery more gender sensitive

Without education, opportunities to access the labour force diminish substantially. But once in the labour force, there are other obstacles. Worldwide, access to credit for SMEs is a major constraint. The International Financial Corporation (IFC) has estimated that there is a USD 300 billion gap globally in financing for formal, women-owned small businesses, and more than 70 percent of women-owned small and medium enterprises have inadequate or no access to financial services. This situation will become even more challenging as a result of the pandemic.

Other obstacles are related to the traditional role of women and the availability of child-care. Surveys conducted by Ipsos in 18 countries across the globe in May last year, suggest that women as a result of the pandemic are doing three times more chores at home than men in the form of care, home-schooling and paid work, pointing to a deterioration of the work-life balance.

Finance with positive gender impact

Generally, financial inclusion enables people and businesses to manage and plan their economies better. More specifically, inclusive finance can help to make the post-pandemic recovery more gender sensitive.

Through our investments, Triodos IM focuses on different sustainability criteria, including income, environment and gender related topics. From a gender perspective, we have the power to diminish some of the obstacles and enable women and girls to participate in society. The companies and financial institutions we finance can enable women to unlock their potential and participate in the economy, by making the labour market more accessible.

Triodos IM is involved at different levels in the transition to gender equality. The listed equity and bond funds have the preference for investing in companies with a positive reputation for diversity, female representation in management, equal pay and providing job opportunities for people with a disability. Positively screening the companies for these standards is a luxury, as it indicates that social inclusion is already at a somewhat higher level.

On the other side, the private debt and equity funds invest in companies and financial institutions that promote gender equality by facilitating access to basic needs, which help unleash women’s economic potential. Around 75% of all people who take out a loan at a financial institution in emerging markets, in which Triodos Financial Inclusion Funds invest in, are women. We also encourage investees to develop products that are better suited for women’s needs, given the specific requirements of some countries.

From a collaborative perspective, we have a long-term partnership with Women’s World Banking (WWB) where technical assistance capabilities and financial expertise come together. We are Investment Advisors to their women dedicated financial inclusion WWB Capital Partners Fund.

A post-pandemic recovery positive for gender equality requires looking for new investment opportunities that allow some catching up. These opportunities will have to be looked at through a gender lens, as gender neutrality is often not enough. For this purpose, we are looking at the gaps and opportunities that COVID-19 has left behind. A gender responsive workplace with child-care facilities and investing in female-owned businesses are but a few of the possibilities.

Having access to the financial system is crucial, especially in the context of COVID-19, in which not only the way of working has changed, but also in which all hands are needed to rebuild a more resilient, sustainable and inclusive economy.

Maritza Cabezas and Amber van der Schoot (Intern) are Investment Strategists.

Read more about our Financial Inclusion investment strategy.