Gender bonds, what they are and how they can help women

THE gender bond They are loans issued with the aim of promoting gender equality and supporting the economic and employment development of women. Let’s learn more about them

In the beginning there were green bondsthen came the sustainability bondand for a year or so a new class of social bonds has begun to appear on the market: that of gender bondtargeted bonds supporting businesses run by women with the aim of (precisely) reducing the gender gap, both in terms of salary and role, and in providing the financial resources necessary for the development of the companies themselves.

The ultimate goal of this type of bond defined as “social” is to fill the gaps in the welfare sector by investing in certain sectors that are considered weaker or less supported, so that a benefit for the whole system is achieved. Just like other types of bonds, they can be issued by both governments and private companies that decide to invest in social issues.

What are gender bonds?

Gender bonds, or gender bonds, are a specific type of bond that is created for the purpose of funding initiatives aimed at promoting gender equality and to reduce inequalities between men and women.
These bonds are issued by government agencies, international organizations or private companies and the revenue raised is used to support projects that promoteempowerment of women, improving access to economic and social opportunities and addressing gender inequalities in all sectors. Therefore, the main feature of these bonds is to provide financing to businesses with a specific focus on gender issues, such as businesses run or owned by women, businesses that promote gender equality in the workplace, and businesses that develop products and services that improve women’s quality of life.

The case of the World Bank

The first to cross the gender bond finish line in November 2022 was International Bank for Reconstruction and Development (World Bank), which did issue a first link for sustainable development and to raise awareness of the importance of investing in women and girls and thereby accelerate economic growth, reduce poverty and help build sustainable societies in all respects. Achieving gender equality and empowering all women and girls is, moreover, one of its goalsUnited Nations 2030 Agenda, and to achieve this it is important to use all available tools. Despite the increased sensitivity on the subject, i female labor force participation rates are often low and significant gender pay gaps persist, not to mention the fact that in many countries women are still concentrated, at the employment level, in sectors and occupations usually associated with lower earnings, the absence of contracts and the lack of protection. Hence the World Bank’s decision to invest in gender bonds.

“We are encouraged by the growth of the sustainable finance market as more and more investors focus on investments that make a difference – said Heike Reichelt, Head of Investor Relations and Sustainable Finance at the World Bank – Making progress towards achieving gender equality is a fundamental development objective and is a fundamental objective of the World Bank”.

The example of Kyrgyzstan

Among the most recent countries to focus on gender relations are the Kyrgyzstanone of two former Soviet republics in Central Asia along with Kazakhstan to issue the first gender bonds in November 2022. The initiative is the result of a partnership between UN Women Kyrgyzstan, the Asian Bank, the Institute for Economic Policy Research of the Kyrgyz Republic, the Green Finance Center, the Kyrgyz Stock Exchange and the financial company “Senti”.

Gender bonds were issued by Bank of Asiawith the aim of contributing to gender equality, respect for women’s rights and their economic emancipation: 82,000 gender bonds worth 1,000 Kyrgyz SIM cards (the local currency) each was auctioned and will remain in circulation for three years, with a total value of approximately 90,000 euros. 25% was bought within the first half hour of trading, mainly by the corporate sector, and among the first buyers were the Accumulative Pension Fund of Kyrgyzstan, Lee Jong Beck, one of the shareholders of Bank of Asia, Nadira Kasymova, CEO of World Class Bishkek and the insurance company Jubilee Kyrgyzstan.

“This initiative will pay special attention women entrepreneurs in suburban and rural areas and several regions of Kyrgyzstan that can bring huge dividends to the community – said Ulziisuren Jamsran, UN Women’s representative in Kyrgyzstan – this is because women’s economic empowerment and sustainable economic development are mutually reinforcing.”

How gender bonds can make a difference

As mentioned, investment goals Gender links can include funding for women-led businesses, projects to promote gender equality in the workplace, initiatives to improve women’s access to education and health, but also projects that develop products and services that specifically benefit the women.

Therefore, through the issuance of gender bonds we seek to mobilize investors’ funds towards goals that promote gender equality, offering them an investment opportunity that aims to create a positive social impact. Added to this is the possibility of contributing to raising awareness of a fundamental issue and thus encouraging concrete change in society.

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