The world’s first development financial institution, CDC Group, says investing in women is good business. CDC has been at the forefront of supporting companies that help poor countries grow for the last 70 years.
According to Morgan Stanley, workforces which include women at all levels correlate with those reporting better returns. On top of that, women are also playing an increasingly important role as customers – by 2028 it’s estimated that female consumers will control around $15 trillion of global consumer spending.
These statistics make a strong case for firms to apply a ‘gender lens’ to business growth and development, but what does investing in women look like in practice? We spoke to businesses across our portfolios which have qualified for the 2X Challenge, an initiative set up by G7 development finance institutions in 2018 to support the economic empowerment of women through gender-smart investing. Here, three business leaders share insights into their experience, motivation, and ambitions for strengthening inclusivity across their business.
In South Africa, Divercity is an affordable housing platform focused on the regeneration of South African cities. “At it’s a core we’re a very simple business. We rent out apartments to people’’, explains Divercity’s CEO, Carel Kleynhans.
As the name suggests, Divercity seeks to build neighbourhoods that are more diverse and socially equitable. They provide low and middle-income households with safe, inclusive and affordable housing options in inner city areas.
This is a stark contrast to most affordable housing delivery in South Africa, where lower income households are commonly found on the urban periphery – far from economic opportunities and essential services.
Over 50 per cent of Divercity’s primary tenants are female, which is why they’ve qualified for the 2X Challenge. But according to Kleynhans, this wasn’t something they initially set out to achieve.
“The truth is that as a core business strategy we don’t actively target women as customers. There’s no part of our marketing process or tenant vetting process that explicitly favours women on a gender criteria.
‘’However, we do see a disproportionately high number of women in our buildings compared to the national average of female tenants. This must beg the question – if we’re not actively going out and looking for women, why is this, the case?”
For Kleynhans, the answer lies in the physical form of South African cities. Living in an inner city area provides significant cost and time savings for tenants thanks to improved access to services such as schools, healthcare facilities, public transport networks and employment hubs.
Gender-based violence is also a widespread issue in South Africa, and Divercity’s apartments offer increased security. “You’ll hear this when you speak to people who live in our buildings – they’re much less frequently in situations where they’re vulnerable to gender-based violence. I think that’s a large driver behind why we see such a large proportion of women renting our units.”
These social and economic benefits for women mean that they are more likely to have longer tenancies, which in turn brings business benefits for Divercity. Together, these factors have affected the firm’s strategic priorities.
“From a purely commercial point of view it has become apparent to us that women are better customers in the long-run and on average. This has made us more receptive to thinking about how to improve our product offering for women, for example through services like the provision of childcare in our buildings.”
This approach is starting to affect how Divercity builds property too. During the development phase of a new 1,600 apartment project, the design team was tasked with thinking about how to make the space more appealing for women, including through elements such as increased childcare facilities and high standards of security. The firm has plans to take this even further: “One of the things we’ve done since CDC became an investor is form an Impact Committee as a sub-committee of our Board’’, says Kleynhans.
“It’s a forum with huge potential for us to achieve much more in this regard going forward. It creates a structured place where impact matters, including gender, are firmly on the agenda.”