Gender Equity in Development Finance: How Are DFIs Doing?

The COVID-19 pandemic is not gender neutral.

Many people, including the managing director of the IMF, have highlighted the disproportionate costs for women. Women’s jobs tend to be more concentrated in the informal sector, which is both hard hit by the crisis and often beyond the reach of government social programs. And their larger share of the household workload only expands when shutdowns force adults to stay home from work or children to stay home from school.

Women entrepreneurs all over the world have been affected by the crisis, especially as they often run businesses in retail service sectors dependent on face-to-face contact with customers. One survey found that 87 percent of women owners of small and medium enterprises (SMEs) saw significant declines in sales in the first quarter of 2020, with most seeing sales drop by 70 percent or more.

How can DFIs support gender equity?

The role of publicly funded development finance institutions (DFIs), which provide finance to SMEs and other private businesses with development impact, will be a critical part of the crisis response. Income transfers from governments can only do so much; the fate of people in poverty will ultimately depend on whether they can access and retain jobs and sustain businesses in the private sector.

The role of publicly funded development finance institutions (DFIs), which provide finance to SMEs and other private businesses with development impact, will be a critical part of the crisis response. Income transfers from governments can only do so much; the fate of people in poverty will ultimately depend on whether they can access and retain jobs and sustain businesses in the private sector. As private banks and other private sources of finance retreat, DFIs must step in to help businesses survive. It is more important than ever that women have equal access to the benefits of DFI finance. Without it, the pandemic and DFI response efforts risk exacerbating already-significant gender gaps in the economy and broader society.

Many DFIs are vocal about their commitment to gender equity and women’s empowerment. Many are supporting pooled funds, special initiatives, and communities of practice. But is this commitment actually making a difference in their investment choices, results, and internal management? Are DFIs ready for the surge in investing in women as entrepreneurs, workers, and consumers that the pandemic has made even more urgent? Surprisingly, we lack data across institutions to answer that question.

New data on DFI policies and practices

To begin to fill that critical data gap, we surveyed the gender policies and practices of 16 DFIs, bilateral and multilateral. The Gender Equity in Development Finance survey examines two facets of DFIs: their (1) external policies and practices governing investments, advisory services, and other development finance programs; and (2) internal policies and practices with respect to DFIs’ own employees and administration.

The survey had four goals:

  1. Establish a baseline (how DFIs are currently incorporating a gender lens in operations)
  2. Identify shared DFI strengths
  3. Note where there are shared DFI weaknesses—that is, where current policies and practices fall short of reasonable and desirable performance standards
  4. Recommend actions that DFIs can take to reap significant gains from additional efforts. We also identify top performing institutions according to the survey criteria.

For the external component of the survey, we scored 25 questions across 6 categories. For the internal component, we scored 29 questions across 11 categories. The detailed questions give us a comprehensive way to assess the many dimensions of gender lens investing. We designed the questionnaire to be as straightforward and objective as possible and to primarily elicit yes/no responses. All questions are weighted the same in the scoring process. For every "yes," institutions received one point. The percentage scores shown below for top performers are the number of points each institution received divided by the total number of points possible.

The results: DFIs are making real efforts to strengthen the use of a gender lens in their operations. 

Our survey results indicate that DFIs—large and small, bilateral and multilateral, old and new, global and regional—are making serious efforts to integrate gender analysis and gender equity-related objectives into their investment process and into their own internal policies and administration. Almost all the institutions have both external investment and internal gender strategies. At the portfolio level, nearly all monitor the share of investments with a gender focus. Most incorporate gender into investment deal sourcing and due diligence, choice of investor partners, and investment documents. Most have gender experts on transaction teams and offer gender training to investment partners. And more than half disaggregate results data by gender and use the disaggregated data for developing lessons for future investments.

In their internal policies and practices, institutions prioritize gender-equitable recruitment, hiring and promotion, and speaking roles at institutional events. Most institutions offer opportunities that promote work-life balance, and every institution offers some form of family leave. Most offer confidential formal channels for reporting discrimination and harassment and just over half the institutions report on these issues to their boards. They all track gender in the composition of their boards and most track the gender composition in senior positions and the investment committee. They measure gender gaps in compensation.

In short, DFIs have indeed laid the groundwork for increasing the benefits of their investments for women and to create equal opportunity for women inside their organizations.

But are the efforts making a difference in impact?

A significant investment in process inputs is not matched on the output measurement side. It is unclear whether DFIs’ investments in process changes are actually making a difference in how much gender is mainstreamed or a focus in investment decisions, or whether changes are yielding beneficial gender-related outputs and outcomes. DFIs have room to improve in setting targets that ensure the aspirations reflected in strategy documents are met. And they could be more transparent about how well they are performing, both in their investments and in their internal practices.

Setting targets, increasing transparency, and providing training are all areas for improvement.  Half of the institutions don’t set targets for measuring the implementation of their external gender strategies. Most do not publish the shares of their investments that have a gender focus. Half do not systematically incorporate gender scores or other qualitative factors into each investment approval decision by the investment committee. Most don’t train their own staff on how to integrate gender analysis and objectives into investments. And most do not publish their gender disaggregated data.

The same pattern can be seen in internal practices. While DFIs measure pay gaps and gender imbalances, most do not publish targets for narrowing gaps or improving gender balance on boards and senior management. And most don’t train staff and managers on gender, bias, and diversity. On average, women account for a third or less of board members and senior staff. Of all the DFIs we surveyed, only one institution promotes the sourcing of goods and services for its own operations from women-owned businesses. (Read our brief for a full breakdown of the numbers.)

DFIs should be commended for building the systems and databases needed for institutional change. But they can get more from this investment by defining, measuring, and publishing their targets for change with respect to internal and external gender equity and women’s empowerment. If they translate data and analysis into measurable and transformational institutional goals, the result will be major advances in transparency, accountability, and development effectiveness.

Top performing DFIs

External Internal
IDB Invest (92%) IDB Invest and IFC (79%)
CDC Group (88%) CDC Group (76%)
IFC (84%) ADB (72%)
FinDev Canada and ADB (80%) JICA (62%)
Average (68%) Average (52%)
*All scores are out of a possible 100%.

The top performing institutions in our survey include multilateral DFIs (IDB Invest, IFC, ADB) and bilaterals (CDC, JICA, FinDev Canada). We are encouraged to see smaller or more recently established institutions among top performers (e.g., FinDev Canada). Moreover, age, size, geographic focus, and bilateral/multilateral shareholding structure do not predetermine DFIs’ prioritization of gender equity in their external or internal operations. This is a cause for optimism and a reason to push for ambitious policies and practices across institutions.

Recommendations: from commitment to impact

Below, and in the survey brief, we outline concrete recommendations for DFIs.

1. Increase transparency.

Establish a common methodology for measuring the volume and share of annual investments with a gender focus and publish the data. Publish and share gender disaggregated results data, as well as diagnostic and baseline data (without compromising business confidentiality). Publish data on internal gender gaps in pay, board composition, management, hiring, and sourcing.

2. Set targets and timetables.

Set targets at the portfolio level for the volume and share of investments with a gender focus, that is, specifically targeting and benefiting women. Set targets and timetables for closing gender gaps in pay, boards, management, hiring, and sourcing.

3. Make gender-related impact, including benefits and risks of DFI investments to women and girls, a key, standalone criterion in every investment decision.

Opportunities for extending and expanding investment benefits, and avoiding harm, for women and girls should be truly mainstreamed and required in all investments.

4. Keep leading through collaboration.

Building on the 2X Challenge and We-Fi, keep setting measurement standards; promoting high-impact investments; and sharing strong gender policies, practices, and learning with other impact investors, including private investors interested in empowering women, to push the field forward collectively.

5. Train management and staff

In integrating gender into investment development and design, and in internal gender, bias, and diversity issues and challenges.


We hope that our initial efforts to deepen collective understanding of DFIs’ gender-related policies and practices and recommend further actions will help DFIs accelerate progress in narrowing gender gaps and benefiting women and girls. At a time when COVID-19 makes investing in women more essential and urgent than ever, we are eager to continue to engage with DFIs to track their progress over time.


CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.

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