Gender lens investing (GLI) is an approach to investing into companies, organizations and funds that takes into consideration gender[1]based factors across the investment process to advance gender equality and better inform investment decisions.

Although most funds that invest with a gender lens are based in and operate in the Global North, investors operating in developing countries have also started to adopt the practice in recent years, investing in women-owned enterprises and in enterprises that empower women as customers, employees, suppliers or distributors (termed as gender[1]inclusive businesses). Research demonstrates a strong business case for investing with a gender lens: companies which have women in leadership demonstrate higher share price returns, better attract and retain talent, and are more creative.

However, the scale of GLI remains small, despite increasing interest in this asset class. Women entrepreneurs attract a minority of global investments, receiving 2.3% of global VC funding in 2020. Lack of tailored funding, gender bias from capital providers, inadequate business and technical skills, lack of networks and patriarchal social norms are the key challenges restricting access to finance for women-owned enterprises. Gender[1]inclusive businesses struggle with limited access to information, lack of investor networks and a limited ability to measure their gender impact.

In Kenya, women entrepreneurs similarly struggle to access capital. Most women-owned businesses in Kenya operate informally and struggle to access capital from sources beyond friends and family, microfinance institutions and savings groups (such as Chamas and SACCOs) . Banks and investors often do not view them as potential customers. This is also the case for formal enterprises: although 34% of formal microenterprises in Kenya are women-owned, they account for 76% of the total financing gap for formal microenterprises in the country.

While progress is slow, multiple interventions by the government, donors and ecosystem support organizations are helping channel capital with a gender lens. Aspects such as local presence of impact investors, a growing number of women in business, improved educational attainment of women and a growing entrepreneurial support ecosystem have been enabling GLI in Kenya.

However, success has been mixed, with existing strategies and interventions being unable to sufficiently serve women-owned and gender-inclusive businesses. There is therefore a need for innovative and disruptive solutions to increase GLI in Kenya. This study builds on existing research through consultations with ecosystem stakeholders to identify persistent market gaps and challenges experienced across the GLI ecosystem and potential solutions to address these.

This research provides an in-depth assessment of the gender lens investing market in Kenya. This report builds on existing research through consultations with ecosystem stakeholders to identify persistent market gaps and challenges experienced across the gender lens investing ecosystem and potential solutions to address these.

The key objectives of the research include-