Durreen Shahnaz, founder and chairperson of Impact Investment Exchange Asia, was the keynote speaker on December 12 at the Annual Stree Shakti Awards and book launch by Minister of Tourism Kumari Selja in New Delhi, India.
Stree Shakti-The Parallel Force, is a platform for the convergence of grassroots efforts, scientific research, creative ideas and enterprise and a collective voice of women seeking justice and equality.
The event was co-sponsored by the International Women’s Centre, whose mission is women’s empowerment through promotion of art, culture, and communication to resolve social, economic, and political issues and bring women from all over the world on a common platform for world peace.
Excerpt from Keynote Speech: Women’s Role in Social Enterprise
I am in a unique position to be standing in front of you today to discuss today’s topic. I am the youngest of four daughters of a Muslim family. After I was born, my mother had to bear the shame of giving birth to a fourth daughter. My father was encouraged to marry again. My mother eventually recovered from the depression of giving birth to me, and my father did not remarry. Instead, they put their parental energy into our education. Although we had our social boundaries, nevertheless, we four girls became a doctor, a teacher, a development worker, and an entrepreneur.
My entrepreneurial spirit has never been based on a desire to make lots of money but on a desire to fight social injustice. Whatever the source of ones entrepreneurial spirit, it propels a person – especially a woman – to new heights of innovation and opportunity. Thus, I hope you will all go away from the talk today and do your part – whether nurturing your own entrepreneurial spirit or encouraging another woman entrepreneur in your own way – both because they truly hold the key to the success of the next generation and to make each of our countries a better place.
I was fortunate to have a career that spanned the full spectrum of private to public sector. I began my career as an investment banker at Morgan Stanley in New York. I was young and excited about being at the heart of the capital markets that made the financial system of this world work. However, when I arrived what struck me was what a small role women played in influencing and defining the capital markets of the world. During those days, in the entire staff of Morgan Stanley (which was then several thousand), there were less than 30 women bankers. And I have to say, from my Wall Street experience, I have to agree with the recent observations that some have made that the financial meltdown of the last 12 months could have been avoided if the large financial institutions were run by women.
I left Morgan Stanley to join Grameen Bank in Bangladesh. Similar to Morgan Stanley, Grameen offices in both the city and the villages were staffed largely with men. The difference was that almost all of the clients (at that point, around 2 lakh) were women. The women were clients not because anyone was doing them a favor but because they were better clients – they had better repayment rates than their male counterparts and they shared their income with their families. During that time, I was fortunate to meet thousands of these incredible women entrepreneurs who were fueling the engine of the rural economy and at the same time building Grameen into one of the most incredible success stories of social enterprise.
I was humbled and impressed by the women entrepreneurs I met in the villages. Because the system did not work for them, they were forced to innovate to survive in the system. More than 80% of the women I met while at Grameen were illiterate, and yet they were smart enough to figure out complicated concepts such as interest rate arbitrage (where at time some were becoming lenders themselves) and innovative management practices – like the woman who had her husband marry three more times and then hired those other wives into her growing weaving business.
These women neither saw themselves as heroines nor as hand-out cases – but simply as human beings who at last had the opportunity to stand on their own feet. And, every single woman I met, as soon as they saved some money they sent their children to school. And, every single one of these women told me that they did not want their daughters to have the same life as theirs.
Today, microfinance all over the world is one of the sexiest ‘asset classes’ and has become an essential fuel of the economy in many developing countries. I meet investment bankers who talk about the high financial returns of the MFIs and are creating sophisticated financial instruments around the MFIs. Sadly, I have not met a single banker who for a second talks about these millions of women across the globe who are fueling the MFIs and playing their role in nation building.
What are we doing for these women other than giving them small loans? Sadly, the answer is “not much.” And yet, we are creating and fueling fancy financial institutions on their back.
A recent article in the The Economist magazine said, ‘forget China, India and the Internet. Economic growth is driven by women.’ The article goes on to say that an increase in women’s employment, in both the developing and developed world, has been the biggest engine of global growth in recent decades.
And, as I have seen with my own eyes, experts are also pointing to the clear evidence that helping women to develop their skills and join the labor market boosts incomes and the well-being of society as a whole. It is now an established fact that educating girls boosts prosperity. The multiplier effect of that is – more productivity, income generation, healthier and better educated children – thus raising the welfare of the entire family and in turn nation.
Sadly, despite all this evidence, women remain perhaps the world’s most underutilized and under-recognized resource. Equal opportunity in the economic sphere is not a reality, and its absence is a drag on growth, development and poverty alleviation.
Globally, women are most heavily represented in micro and small businesses. That is not a surprise. This is due to legal, social and cultural forces which guide and in some way constrain their business decisions.
What do the women themselves perceive as their biggest obstacle? In Bangladeshi villages when I asked this question, the answer was access to capital, education, culture and support system. When this question was asked in the US, the answers were very similar, and to the list above the American women added trade, affordable health care, taxes, government policies, and media exposure.
Interestingly, if you look at these issues, they are concerns about accessing the capital and markets needed to grow profitable and sustainable business. And, they are about securing essential social protection. These concerns are common to all entrepreneurs in many countries, whether men or women. These are small business issues, not particularly women’s issues. However, because most representation in these small and micro businesses is from women, they become women’s issue. And women’s entrepreneurship needs special recognition because it constitutes an important untapped source of economic growth and societal wellbeing.
One group of entities which is trying to assist, among others, the disadvantaged, women and small businesses are Social Enterprises. Thousands of Social Enterprises (which can be defined as Social mission-oriented for-profit companies OR business-oriented non-profit entities) across the globe are working relentlessly to bring better livelihood, education, healthcare, sanitation and income opportunities to the poor and make this world a more equitable place. However, many of these entities struggle themselves to get sufficient capital and recognition for the work they are doing.
In response to this need, and to support these Social Enterprises and assist them in growing their impact, I founded Impact Investment Exchange, a social stock exchange for social enterprises in Asia. I was audacious enough to think that we can make investors care about more than just a financial return for their investment. And we did. I have been receiving resounding support from the financial sector and the public in creating this exchange, which will in essence assist social enterprises to increase their social impact and in effect assist millions of women and disadvantaged across the globe.
So, what is IIX? IIX will be Asia’s first social stock exchange, providing a trading platform and an efficient capital raising mechanism for Asian Social Enterprises (SEs), including both for-profit and not-for-profit entities with a social mission. IIX will connect these SEs with Impact Investors seeking to achieve both a social return and an economic return on their investment while providing capital to fund innovative social businesses.
In Asia (especially in South Asia) we face the gravest of the world’s challenges covering a whole spectrum of issues, including women’s empowerment, poverty alleviation, and environmental protection. It is SEs like Grameen Bank, BRAC, SEWA, BWDA, and Selco that are playing a leading role in confronting these challenges.
What can we do to assist them? What can we do to help them expand their impact? The answer is simple: to provide access to capital. Just as microcredit has given access to millions of individuals and given them an opportunity to create a new life, IIX will give access to capital to the SEs that assist millions. These SEs will be judged for the social and financial sustainability that they attain and they will help us broaden the definition of a ‘successful enterprise’.
We need many social enterprises, impact investment exchanges, private sector initiatives and public sector support to listen to the voices of women entrepreneurs. Gender specific constraints to entrepreneurship require well-supported specific policy responses.
These responses need to be financial, political and most importantly practical. Women need targeted training in how to start, manage, and grow businesses. Just as they need the entities like social enterprises to give them the structure to grow and sustain their businesses. Women and these social enterprises must lend their voices to efforts to identify and address laws and policies that do not adequately address their needs.
Now why is all this relevant to you? It is because you each have an important role to play in bringing about this positive social change.
As Ghandiji said, “We must be the change we wish to see”. If we want our nations to develop, if we want our children to be educated, if we want our environment to be clean, we will need to leverage the vast capabilities of the women in our society. Women in the audience: you have the power to change the world for the better…each in your own way — as an entrepreneur, or a social entrepreneur; as a government policy maker, or one who influences government policy; as a leader and as an example. Everyone in the audience: we each need to support the women in our society; and, we need to support the entities that support these women…Women are the key to the future.
There is a saying that women must do twice as well as men to be thought half as good. Luckily, that is not so difficult. Just give us the chance, and we will show you what an incredible force we are.