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How Gender-Smart Investing Increases Profits and Gender Equality

February 3, 2021

By Michael R. DiGregorio

In The Asia Foundation’s continuing discussions of gender equality in the labor force and the private sector in Vietnam, gender-smart investing is trending. Gender-smart investing integrates women’s capacities and life experiences into investment analysis and strategy in order to increase profits while reducing gender gaps. We call this a shared-value opportunity.

Man and Woman prepare mango fruit for sale

A household business supported by the VBSP, the Vietnam Bank for Social Policies, an Asia Foundation partner

Micro, small, and medium enterprises (MSMEs) are vital to Vietnam’s economic growth, accounting for more than 98% of all businesses, 40% of GDP, and 50% of total employment. Women-owned MSMEs account for 25% of all active enterprises in Vietnam. A majority of these micro-enterprises are run by women whose primary goal is feeding their families. They are not entrepreneurs, but their businesses are crucial to the health and security of their families. At the same time, women make up roughly 35% of the executives in Vietnamese corporations. Many of these women have been pioneers in their fields.

Unfortunately, despite Vietnam’s long tradition of women-run businesses, data like our 2017 survey with the Vietnam Women Entrepreneurs Council consistently flags access to finance as a critical barrier to women’s businesses. This is because commercial banks generally stick to their “trusted” clients and will not invest in small, women-run enterprises in the absence of government regulations or programs. Our research shows that the biggest difficulties women face when they seek business financing are high interest rates based on perceived risk (67%), inappropriate loan application packages (45%), unsuitable terms and tenure (33%), and lack of collateral (30%).

Gender-smart investing that considers both formal and informal barriers can address many of the financial challenges that women face. Only 46 countries worldwide have laws prohibiting gender discrimination in lending. Simply providing equal access to credit will open up possibilities for women to start and grow businesses.

Gender-smart investing can also be climate-smart investing. In recent work with the Vietnam Chamber of Commerce and Industry, we discovered that a remarkable 78% of domestic businesses see opportunities in the climate crisis, including opportunities to create new products, services, or brand recognition, to create new markets for existing products, or to reorganize their own production processes. Increasing the participation of women-owned businesses will create more sources of these much-needed innovations.

Woman and man inspect fruit on tree

            The VBSP provides financial services to women-owned businesses like this one.


Gender-smart investing is increasingly viewed as a smart approach to business policies and strategies to cope with the pandemic. The Covid-19 crisis has spurred investment in public health, of course, but it has also accelerated the growth of all things digital—e-commerce, financial technology (fintech), blockchain technologies, smart-city development—it’s a long list supported by a lot of recent data. Our Vietnam office has been applying gender-smart principles in our programing, and here are a few examples from our experience:

The gig economy

The so-called gig economy of short-term, irregular employment is growing rapidly in Vietnam, as in the rest of ASEAN, initially led by companies like Uber, Grab, and Gojek. Our office has been addressing issues in the gig economy through a pilot project with Infinity Blockchain Labs and JupViec JSC, an Uber-like maid service. This project creates a blockchain identity for maids working through JupViec and an app that can be used for contracting. This provides both a secure means of contracting and payment and a record of employment that maids can use to secure a bank account or loan or to apply for temporary residence in Hanoi or Ho Chi Minh City—a requirement to receive healthcare services and schooling for children. Over the longer term, this blockchain system can also be used by maids who choose to contribute to government insurance programs. We think this model could be applied more broadly to all kinds of temporary services, because, since transactions are traceable, both service provider and client feel more secure about a stranger entering the home.

Financial inclusion

According to the World Economic Forum, nearly one in three women globally is excluded from the formal financial system. Women are statistically less likely than men to have access to basic banking services, mobile wallets, insurance, and loans, and the poorer the community, the wider the gender gap. As Women’s World Banking has observed, not being able to make private, secure digital payments increases the need for travel, which increases the risk of exposure to Covid-19. We also know that women who pay with cash are more vulnerable to violence and to spouses taking away their resources.

The key is to make sure that financial products are right for women by paying attention to where women are situated in the value chain. Our office is working with the Vietnam Bank for Social Policies (VBSP) and Mastercard to increase access to financial services for the bank’s 7 million low-income clients, particularly women-owned micro-enterprises. We are also using blockchain technologies to work with Vietcraft, the Vietnam Handicraft Exporters Association, to certify compliance of handicrafts for export. The primary beneficiaries are household handicraft producers who cannot afford to certify products on their own.

Woman researches on computer terminal

A client of the Tinh Thuong Microfinance Institution researches marketing skills on line.

Bridging the digital divide

Globally, 184 million fewer women than men own mobile phones, and 327 million fewer women can access the internet through their mobile devices. If a woman doesn’t have access to a mobile device or a computer, she will be ill-equipped for the job market when the economy recovers. She’ll have difficulty getting money that is available through governments, banks, or grants. She’ll have less access to education, to news, and to public-health information.

Go Digital ASEAN, a regional project implemented by The Asia Foundation in the 10 ASEAN member states, is expected to connect 200,000 people from rural, poor, and disadvantaged groups, particularly women with micro-enterprises or household businesses, to the digital economy. In Vietnam, with our partner Tinh Thuong Microfinance Institution (TYM), we expect to train 65 thousand women and underemployed youth in the northern and north-central parts of Vietnam.

Gender-smart investing can be achieved by improving women’s access to capital, by investing in women-led businesses, and by addressing the social issues that affect women and girls. The Asia Foundation’s programing in Vietnam supports gender-smart investing to advance women’s empowerment and contribute to the country’s priorities of gender equality and inclusive growth.

Michael DiGregorio is The Asia Foundation’s country representative in Vietnam. He can be reached at [email protected]. This essay is adapted from the author’s remarks at the ASEAN Women CEO Summit, “Making Changes for a Stronger and More Responsive Community of Women Entrepreneurs,” in November. The views and opinions expressed here are those of the author, not those of The Asia Foundation.


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