Impact investing, which aims to generate social and environmental benefits alongside financial returns, has gained significant traction over the past decade. In the agricultural sector, impact investing plays a crucial role in promoting sustainable practices, enhancing food security, and supporting rural development.

Agriculture is a vital sector for economic development in Sub-Saharan Africa where it employs 50% of the population and contributes 15% to the total GDP[1]. Historically, agricultural investments overlooked gender-specific needs and contributions, leading to a gender gap in productivity and income.

Gender considerations in impact investing are essential, as they address the unique challenges faced by women in agriculture and leverage their potential to drive positive change. Gender Lens Investing (GLI) is a strategy or approach to investing that takes into consideration gender-based factors across the investment process to advance gender equality and better inform investment decisions.[2] This can include investing in women-owned or women-led organizations, enterprises that promote workplace equity, or products and services that benefit women and girls[3]. Women represent about 40% of the agricultural labour force in developing countries[4]. Closing the gender gap could help reduce hunger and improve livelihoods for Africa’s growing population, which is expected to quadruple within the next 90 years. If women worldwide had the same access to productive resources as men, they could increase yields on their farms by 20–30% and raise total agricultural output by 2.5–4%[5]. Moreover, Gender lens investing has grown significantly, with over $4.8[6] billion committed to gender-focused impact investments as of 2022.

Current Trends

Several trends characterize the current landscape of gender in impact investing in the agricultural sector:

• Gender Lens Investing: This approach involves incorporating gender analysis into investment decisions to identify opportunities that benefit women and girls. Gender lens investing has gained momentum, with investors increasingly recognizing the potential for higher social and financial returns.
• Women’s Empowerment Funds: Numerous funds have been established to specifically target investments that empower women in agriculture. These funds provide capital to women-led enterprises, support female farmers, and promote gender-equitable agricultural practices.
• Data and Metrics: The development of gender-specific metrics and impact measurement tools have improved the ability to track and report on gender outcomes. Initiatives such as the Gender Equality Mainstreaming (GEM) Framework and the 2X Challenge have set standards for gender-smart investing.
• Public-Private Partnerships: Collaborations between governments, development organizations, and private investors have facilitated gender-inclusive agricultural investments. These partnerships leverage resources and expertise to address systemic barriers faced by women in agriculture.

Future Opportunities

The future of gender impact investing in the agricultural sector presents several promising opportunities:

• Digital Financial Services: The adoption of digital technologies can enhance women’s access to financial services, markets, and information. Mobile banking and digital platforms can bridge the gender gap in financial inclusion, enabling women to invest in agricultural activities.
• Climate-Resilient Agriculture: Investing in climate-resilient agricultural practices that consider gender-specific vulnerabilities can enhance the resilience of women farmers. This includes supporting women in adopting sustainable practices and accessing climate adaptation resources.
• Capacity Building and Training: Providing training and capacity-building programs tailored to women’s needs can enhance their skills and knowledge. This empowers women to take on leadership roles in agricultural value chains and access higher-value markets.
• Policy Advocacy and Reform: Advocating for policies that promote gender equality in agriculture is crucial. This includes land rights reforms, access to credit, and legal protections that support women’s participation in agricultural activities.

Conclusion

Gender considerations in impact investing are critical for achieving sustainable and inclusive growth in the agricultural sector. By addressing the unique challenges faced by women and leveraging their potential, impact investors can drive significant social, environmental, and financial benefits. Future opportunities lie in harnessing digital technologies, promoting climate-resilient agriculture, building women’s capacities, and advocating for gender-equitable policies. Continued efforts to gather and analyze gender-specific data will be essential for measuring progress and driving impactful investments.

By Mitchel Ouma, Senior Investment Consultant, Agri Frontier Growth Hub

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[1] https://www.oecd-ilibrary.org/sites/agr_outlook-2016-5-en/index.html?itemId=/content/component/agr_outlook-2016-5-en

[2] https://thegiin.org/gender-lens-investing-initiative/

[3] https://www.imd.org/ibyimd/finance/gender-lens-investing-cuts-risk-and-boosts-returns/

[4] https://www.fao.org/rural-employment/work-areas/women-and-decent-work/en/

[5] https://www.worldbank.org/en/region/afr/publication/levelling-the-field-improving-opportunities-for-women-farmers-in-africa#:~:text=If%20women%20worldwide%20had%20the,output%20by%202.5%E2%80%934%25.

[6] https://www.imd.org/ibyimd/finance/gender-lens-investing-cuts-risk-and-boosts-returns/