Viability of Gender Bonds in Sub-Saharan Africa: A Landscape Analysis and Feasibility Assessment

Gender lens investing (GLI) is based on the premise that investing in companies that promote gender equality through their internal policies or through their business activities is not only morally responsible but can lead to higher financial returns. To date, the majority of GLI in Sub-Saharan Africa has been carried out through dedicated investment vehicles such as Alitheia, a Nigerian private equity fund which uses a gender lens approach, or initiatives such as the IFC’s Banking on Women (in conjunction with Goldman Sachs’ 10,000 Women). Now, a number of development finance institutions (DFIs), development agencies and investor groups are looking to expand the footprint of GLI, popularise gender considerations in investing and provide greater clarity about GLI.

Gender bonds, as a recent development in both the themed bond space and in the GLI space, are still relatively poorly defined, beyond being bonds that support the advancement, empowerment and equality of women. No official or universal definition exists. Like other themed bonds, gender bonds can be issued as senior unsecured notes referencing the balance sheet of the issuer, where proceeds are ringfenced for specific use on eligible ‘gender’ activities, or as securitisations referencing a pool of assets directly (e.g. issued off balance sheet by an SPV into which a portfolio of eligible loans are placed).