MANAGING INVESTMENTS

How can I execute and manage investments in this area effectively?​

Tips

Tools

Checklist

Additional Resources

Compared to traditional investments, investing in ventures in emerging markets with a focus on girls and young women may require more active management from investors. This involves not only monitoring impact and risks (as well as financials), but also providing broader support to investees. While the Defining Impact section of this toolkit lays the foundation for impact management with a girl lens, the following are some additional tips and tools to help investors maximise the success of investments.
  • TIPS

Use of partnerships to scale

Key Tip

Partnerships with larger players such as corporates, NGOs or other donors can bring additional experience, expertise, reach and brand to catalyse/amplify a venture's potential scale and impact.

Two ventures using partnerships to scale

Using partnerships and co-funding approaches can help to de-risk impact investments, particularly in emerging markets. SPRING leveraged its networks to connect ventures to other relevant programmes and entities, which sometimes led to helpful new partnerships, as highlighted in the two examples below.  

Sehat Kahani provides low-cost, high-quality healthcare to marginalised communities in peri-urban Karachi and in rural areas of Sindh and KPK. Through collaboration with Lifebuoy, a brand of soap marketed by Unilever, and UNICEF, Sehat Kahani was able to fund its expansion and reach marginalised girls and young women. Leveraging UNICEF’s expertise, Sehat Kahani was also able to reach women and girls in very different socio-cultural contexts, overcoming a barrier identified by their research that mobility depends on ethnicity, and so outreach strategy needs to be extremely contextualised.


From an investor’s point of view, this collaboration helps to de-risk the investment by the power of the partnerships on the table. Sehat Kahani is able to leverage the experience, expertise, reach and brand of these larger players. Through the expansion, Sehat Kahani will be able to improve knowledge, awareness and use of healthcare among girls and young women, leading to greater use of contraception and improved diets. These behavioural changes will result in improved nutritional status, improved overall health and well-being of girls, as well as delayed marriage and childbirth.

A large national agribusiness in Nepal, Shreenagar aims to increase both business and nutritional impact by encouraging adolescent girls to eat more eggs for affordable high-quality protein. USAID had been working in the region to train women poultry farmers, thereby creating a supply chain for eggs. Shreenagar was able to benefit from that supply chain (and the training and funding that went into the development) as part of its business expansion. This means that Shreenagar did not have to spend financial resources to create a supply chain – instead, it was able to use the supply chain already created by USAID.

Influencing ventures

Influencing ventures to focus on younger populations

 

The due diligence phase is a good initial opportunity to influence a venture’s focus, but this influencing can also be done on an ongoing basis. SPRING was able to influence both the age and gender focus of its ventures. Those that already had a gender focus sometimes identified market opportunities with younger populations. SPRING worked  with a security company in Nepal that was providing sexual violence risk reduction training to women in small groups. When an opportunity arose to provide the training to a younger group – girls in schools – SPRING helped them capitalise on it. Using human-centred design, they adjusted their curriculum and delivery model, and went from reaching up to 30 women at a time to holding ‘en masse’ trainings in schools for up to 500 girls at a time. They added new training elements to reach parents, teachers and boys, making the programme even more effective. The new model was not only more scalable, it was also more impactful and provided greater financial returns.

 

In summary, investors could play a critical role in challenging and encouraging ventures to focus on younger populations – a way to increase and improve their social impact and business results. 

Cautionary tales​

As a way of generating earned income, some ventures may sell directly to low-income populations. However, in SPRING’s experience, they may not always want to pay for a product or service that that may be available for free from the government, a donor or NGO, albeit at lower quality – making it difficult to achieve financial sustainability when targeting low-income populations. 

 

One agricultural venture that engages girls as producers mentioned that it is even difficult to convince those that are making a profit to reinvest in their farms as they are used to obtaining farm inputs (seedlings, fertilizer, etc.) for free and associate SPRING with donor-led programmes. One microlending venture faced a similar issue as many clients did not repay their loans, thinking it was a donor-led programme and repayment was not required. 

In emerging markets, political factors may impact the businesses. In the case of one agricultural venture, a government initiative distributing free seeds to farmers led to a dramatic drop in prices for the crop they were focused on, reducing the company’s profit margin. Ventures in Kenya also spoke about having to pause their expansion plans due to election turmoil within their target communities. 

While there may be business benefits to including girls and young women in the value chain, there  can also be considerable challenges. For example, social norms may  prohibit their continued participation and engagement. Several SPRING businesses that experimented with hiring adolescent girls in their value chains faced issues with high drop-out rates, leading them to stop focusing on a specific age range or to pivot to focussing on older girls. Here are some lessons learnt from businesses trying to reach girls aged 10–19 through value chains:

 

  • Girl focus needs to fit with a venture’s core business 
  • Roles assigned to girls and young women should match their experience and skill levels
  • Working through families or gatekeepers may be a key to success
  • Girls may require a higher level of support/training than a business is able to provide, so a business should consider working with other actors or seek grant funding

In emerging markets, a large share of the population typically work in the “informal economy”.1 Girls and women, compared to their male counterparts, make up a disproportionate percentage of workers in the informal sector – up to 95% of female workers in South Asia and 89% in Sub-Saharan Africa are employed in the informal sector.2 As such, impact ventures focused on girls and young women may be more likely to operate within the informal economy than the formal one – making it harder for investors to look at traditional financial metrics to determine success. This does not mean that there are fewer financial opportunities, but the opportunities need to be evaluated differently. 

1 The informal economy in developing countries: An introduction (by The World Bank, 2011)

2 Women in informal economy (by UN Women, 2016)

  • TOOLS

Ensuring compliance

Safeguarding 101


There are two important concepts here: 


  • Child abuse: significant harm caused to any child by physical injury, sexual abuse, neglect or emotional damage as a result of failure to act or deliberate harmful acts.
  • Girl safeguarding: responsibilities and actions taken by individuals, organisations, businesses and communities to keep girls safe from all forms of harm.


The figure below shows the various dimensions of harm that may be caused to adolescent girls:
As an investor, it is important to know that the company is putting safeguarding mechanisms in place. Moral and legal responsibilities mean that investors should not expose girls to the risk of harm or abuse, and should respond appropriately to disclosure and suspected abuse.


The four components of safeguarding are awareness, prevention, reporting and responding.


Investors should put a girl safeguarding plan in place and implement it, as well as require investee(s) to do so.

Know the law


As an investor, knowledge of local laws is crucial to ensure compliance as well as to identify any legal barriers to business success. Legal considerations relating to girls and young women include:

This may vary depending on the market. Most countries also have, by law, a minimum working age for children (usually 13 or 14 years) to undertake restricted or easy work, with parental permission.

Currently, 104 economies, mainly in the developing world, prevent women from working in certain jobs. In 59 economies there are no sexual harassment laws in the workplace, and in 18 economies, husbands can legally prevent their wives from working. While these may present opportunities for businesses to intervene and help improve legal rights for women and girls, they may also present barriers to business success.

For investors looking at the health sector, sexual and reproductive health laws can be restrictive in many countries, limiting access to modern contraception and other reproductive health services, including abortion. Understanding such laws is crucial to understanding challenges girls and young women face in preventing unwanted pregnancies.

Legal discrimination against women, such as employment laws and inheritance rights, has contributed to a gender gap in access to formal banking – women are 15% less likely than men to have a bank account.

Moreover, as part of safeguarding, investors should confirm with investees that whistleblowing mechanisms and protection of those who report abuse, or who refuse to cooperate with abusers, are in place.

  • CHECKLIST

Capital-plus support​

Investors should not only consider the capital they are putting in when they are closing deals, but also the additional support they are able to provide for investees. This checklist helps investors think through some options for providing additional support.

 

Investors can introduce investees to other investors, customers, partners as well as talent (potential hires). 

 
  • Strategy
  • Financial management
  • Impact measurement and management
    Beyond Capital: “Overall, our view is not that impact measurement is difficult, but it needs to be set up with a defined process. As investors, we try to break down the business model and think about beneficiaries being impacted by various aspects of the business model. Then, we go forward by having a conversation with the entrepreneurs, and we try to match as many IRIS indicators as we can.”
  • Gender
    Tina Assi, Program Officer, Grand Challenges Canada: “Grand Challenges Canada is committed to integrating gender considerations across our investment process, from outreach to due diligence, to post-deal execution activities and monitoring and evaluation. This includes providing support to move innovators forward in their gender strategies.”

 

Beyond Capital: “The value added is the relationship and being a sounding board; companies operating in frontier markets have a smaller talent pool to pick from. We can help by being a sounding board in the absence of a strong no. 2 or no. 3.”

 

This includes legal support, Human Centred Design (HCD) expertise or funding for HCD research

 

Funding from the Shell Foundation enabled SafeBoda, a motorcycle taxi company in East Africa, to create a gender-focused impact report with external consultancy support. View the impact report here.

 

Suzanne Biegel, Investment Director, SPRING: “I help my investees to go to events they otherwise won’t have access to; and I promote them as speakers. I also try to get them into the press, to be interviewed or at least mentioned, and for awards/other recognition. In my own social media, I promote their work. Exposure and visibility has value for business development, attracting talent, partners, and more.”

If investors have their own business or have access to one business, in addition to the following capital-plus support, consider:

 
  • Supply chain capabilities and/or distribution channels
  • Marketing and/or operations support

Due Diligence