IDB Invest and Banco Pichincha have recently partnered to issue the first gender bond in Ecuador for USD 100 million with a five-year term. IDB Invest subscribed for USD 50 million of the issuance and was joined by the International Finance Corporation (“IFC”), a member of the World Bank Group. The country is following the steps of Panama and Colombia, a leader in gender bonds in the region, and it is hoped that the issuance will incentivise improvements towards the country’s gender equality objectives.
This is welcome news as Ecuador faces one of the starkest gender divides in Latin America. An executive at IMPAQTO Capital, an impact investing fund providing flexible capital to early-stage startups in the Andean region, shared his comments on the thematic bond, “Ecuador’s new gender bond is a step in the right direction to address gender inequality in the country as it expands access to capital for female-led SMEs. The figures clearly show that women receive less investment for their companies from banks and investment funds. However, much more needs to be done to close the gap and many barriers to female entrepreneurs will continue to exist.”
“Ecuador’s new gender bond is a step in the right direction to address gender inequality in the country.”
Executive, IMPAQTO Capital
This is the latest in a string of initiatives across Ecuador that aim to improve the gender divide. In November of last year, the University of Ecuador launched a crusade against gender violence following work by the Aldea foundation that reported over one hundred fatal female victims of male violence (‘femicide’) in Ecuador in 2021. Exclusion is also a key concern – the World Bank announced that 57% of unbanked Ecuadorian’s are women.
The executive also addressed the many obstacles that women continue to face in Ecuador, “There are many barriers for women entrepreneurs in this country, including more difficulty in accessing capital, lack of support networks, fewer educational opportunities and explicit discrimination. An intentional and focused effort must be made to promote female entrepreneurship and lay the groundwork for female entrepreneurs to have the same opportunities as male entrepreneurs.”
“There are many barriers for women entrepreneurs in this country, including more difficulty in accessing capital, lack of support networks, fewer educational opportunities and explicit discrimination.”
Executive, IMPAQTO Capital
Ecuador’s gender bond is supported by The Women Entrepreneurs Finance Initiative (“We-Fi”) and the Women Entrepreneurs Opportunity Facility (“WEOF”) which will provide additional financial support in the form of performance-based incentives to extend the bond’s reach to underserved female owned or led SMEs. “Actors in the private sector generally support robust monitoring and evaluation of the bond’s results to ensure that it delivers on its promise and expected impact,” added the executive IMPAQTO Capital.
Femicide, violence against women and gender inequality are problems that span much of Latin America and we expect other countries in the region to follow Ecuador’s steps.