Closing the Gap: A Synthesis Report on the Cases for the ROI of Women’s Inclusion
Given the evidence and positive impact of gender equality on financial and social outcomes, women’s inclusion and empowerment in the private sector are increasingly recognized as core objectives for many investors, fund managers, donors, and implementers. However, most of this evidence is generated from large companies in high-income countries, even though small- and medium-sized enterprises (SMEs) are vital employers and key to creating jobs. SMEs account for 90 percent of businesses, more than 50 percent of employment, and create two out of three jobs globally. (World Bank, 2022) SMEs are also more likely than large companies to hire from marginalized groups experiencing higher unemployment. (ILO, 2019) Consequently, SMEs in low- and middle-income countries (LMICs) present a critical investment opportunity to advance inclusion.
To address this evidence gap, the Feed the Future Market Systems and Partnerships (MSP) Activity examined existing evidence on women-inclusive investments in SMEs in LMICs and conducted primary research with firms. Based on the research, MSP developed the Women-Inclusive Return on Investment (WI-ROI) Framework to provide development practitioners and impact investors with a better understanding of SME practices and incentives for women-inclusive growth.
Using the WI-ROI Framework as a foundation, MSP then published case studies in partnership with two SMEs in Ethiopia and Uganda to highlight promising models of women-inclusive investments. Leveraging financial data from these selected firms, the research team calculated the ROI, tracking revenues, costs, and financial returns to underscore the business value of these investments and build a credible evidence base.
This synthesis report encourages USAID, other donors, and managers of private sector investment funds to further develop evidence on the financial return of women-inclusive investments. Closing the evidence gap for LMICs could catalyze locally led and sustainable investment strategies in inclusive business, while the WI-ROI approach serves as a scalable evidence model with low-cost, rigorous, and localized learning. This report summarizes the findings, benefits, and considerations of the WI-ROI approach to support further understanding and implementation.
Source: USAID
Year: 2024
