The Group of Seven (G7) large economies recently announced that they have mobilized a total of USD 2.47 billion in “gender-smart” investments as part of the 2X Challenge, which was initiated in 2018 by the US government’s Overseas Private Investment Corporation (OPIC). The goal of the 2X Challenge is to raise USD 3 billion to invest in access to finance for women-owned, women-led and women-supporting enterprises in developing countries and emerging markets. Some of the criteria to qualify to receive investments from the challenge fund are 51-percent woman ownership, 20 to 30 percent women in senior leadership, or a 30- to 50-percent share of women staff.
As part of 2X Americas, a segment of the 2X Challenge, OPIC has raised USD 500 million specifically for women in Latin America. This goal was accomplished in partnership with the US Agency for International Development and Citi, a US-based financial services provider.
David Bohigian, the Acting President and CEO of OPIC, said, “Surpassing our USD 500 million 2X Americas goal is an exciting milestone that shows the promising investment opportunity women across Latin America represent. By bringing together OPIC with our private sector partners and USAID’s technical expertise, we can multiply our impact in the region and unleash the enormous potential of women in Latin America.”
The founding members of the 2X Challenge are the following development finance institutions (DFIs): FinDev Canada, PROPARCO of France, Deutsche Investitions-und Entwicklungsgesellschaft (DEG) of Germany, Italy-based Cassa Depositi e Prestiti, the Japan Bank for International Cooperation, the Japan International Cooperation Agency, the UK-based CDC Group and OPIC. In May 2019, the members welcomed four new DFIs, the Netherlands Development Finance Company (also known as FMO), Sweden-based Swedfund, Finland-based Finnfund, and the Investment Fund for Developing Countries (also known as IFU) of Denmark.
Established in 1971, OPIC provides loans, grants, advisory services and political-risk insurance to private equity funds and financial institutions as well as projects in the healthcare, energy, technology and education sectors. As of December 2018, the organization reported total assets of USD 9.6 billion and 12-month gross revenue of USD 250 million, closing the year with 112 active projects in 88 countries.
US-based Citi offers consumer and commercial banking, brokerage, asset management, and institutional securities and transactions services. Its philanthropic activities, including a financial inclusion initiative, are carried out by the Citi Foundation. Citi serves approximately 200 million customers in 160 countries. As of 2018, it reports total assets of USD 1.9 trillion.
USAID is a government agency that provides international economic and humanitarian assistance. It focuses on areas such as economic growth, agriculture, trade, health, democracy, conflict prevention and humanitarian assistance. Under a Development Credit Authority, it provides credit guarantees that cover up to 50 percent of defaults on loans to underserved borrowers. USAID reported USD 39 billion in budgetary resources for 2019.
Formerly known as the Commonwealth Development Corporation, CDC is a UK-based development finance institution that was created in 1948. The organization seeks to make investments in Africa, Latin America and South Asia that “support growth and jobs that lift people out of poverty, and…make a financial return.” As of 2017, the company holds a gross loan portfolio of GBP 4.3 billion (USD 5.3 billion) and has total net assets of GBP 5 billion (USD 6.2 billion). The businesses within the company’s portfolio employed approximately 734,000 individuals as of that time.
By Anna Gravois, Research Associate
Sources and Additional Resources
OPIC press release
https://www.opic.gov/press-releases/2019/opic-commits-additional-500-million-womens-economic-empowerment-latin-america
OPIC homepage
https://www.opic.gov
Citi homepage
https://www.citigroup.com
USAID homepage
https://www.usaid.gov
2X challenge website
https://www.2xchallenge.org
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