Case: The untapped trillion‑euro opportunity: Bringing women into the economy

Increasing the number of women in corporate leadership, governance, and the workforce is a goal that sets Finnfund apart from many other impact investors operating in emerging markets. Step by step and investment by investment, gender equality advances even in some of the world’s most unequal countries in Africa and Asia.

“Being sensitive and understanding local practices is extremely important so that we can identify the pain points and find ways for the companies we invest in to support women,” explains Finnfund’s Development Impact Adviser Kenneth Söderling.

Finnfund has done pioneering work in countries such as India, where unmarried women were previously unable to obtain business loans. Microfinance companies had considered lending to unmarried women too risky because traditionally, once married, a woman moves to live with her husband’s family, and the change of address was seen as a repayment risk. In the worst case, the loan could be left unpaid. A woman could only receive a loan if her husband or a male relative acted as guarantor.

“We had long and difficult discussions with local microfinance companies. For years, the unmarried status of women had been at the heart of their risk management. Step by step, we convinced lenders that their policies had to change and that risk assessments should be based on factors other than marital status,” says Söderling, who specialises in gender equality work.

^{Finnfund’s investee company Kashf has grown to become the largest distributor of microinsurance solutions in Pakistan and also introduced health insurance products aimed at underserved women who did not have access to insurance before. Picture: Kashf Foundation}

The first breakthrough – the granting of a microloan to an unmarried woman entrepreneur – happened three years ago. Now there are a couple of years of data to examine.
“It’s been wonderful to see that investing in businesses run by unmarried women has actually been a business opportunity for microfinance providers. They have gained more customers, and the credit risk has not been any higher than with other clients.”

According to Söderling, the case has taught much about what can be asked in relation to local culture. It is now proven that profitable business and the advancement of human rights can go hand in hand. Microfinance companies have succeeded in building loan products where the risk level and interest rates remain reasonable for small female entrepreneurs. The impact is profound because previously, women had no access at all to formal financing.

“If this approach spreads to other lenders, it will have a significant impact on gender equality. Women will have a better chance to succeed and develop themselves,” he says.

A highlight in Kenneth Söderling’s career was in 2022 in India, when he listened to young women entrepreneurs.
“Most of the women had married before the age of 18, some even before 15. A woman who had married at 21 was admired by others. Witnessing the women’s internal empowerment was remarkable. One could truly speak of a cultural revolution. Supporting that shift was a great opportunity for us.”

Women – a vast business opportunity

According to consultancy firm McKinsey, closing the gender gap in global labour markets could increase global GDP by as much as 26%. As consumers, women—long underrepresented—now form the fastest‑growing market in the world. Women’s consumption already represents a market more than twice the size of India and China combined. It is estimated that by 2028, women will make purchasing decisions worth nearly 13 trillion euros.

Many want access to these markets, but understanding the female consumer requires having women in leadership, governance, and across the workforce. Finnfund has supported “win‑win” situations where bringing women into corporate leadership has opened new business opportunities.

Studies show that increased diversity creates more stable, lower‑risk business than highly homogeneous customer groups.

_{Globally the digital gender gap is decreasing – 65% of women and 70% of men use the internet. Despite the progress, in lower middle income and low-income countries, the gap is still over 10%. Picture: Netwey}

When Finnfund first raised gender issues with Indifi, an Indian fintech company, the response was negative. It was the COVID‑19 era, and Indifi wanted to focus solely on growth.
“Two years later, we reinvested in Indifi together with our British colleagues. As financiers, we encouraged them jointly to see that gender equality was beneficial. Indifi then formed an internal working group that identified the specific barriers women face. This was exactly the right approach. As a result, the company increased the number of women also at the leadership level,” says Söderling.

Finnfund has also supported the East African e‑commerce company Kasha. They sell for example menstrual products with discrete home delivery.
“There is strong stigma associated with purchasing these products. A company founded and led by women developed a service that significantly advances women’s reproductive health and hygiene. Their online store already has more than 100,000 customers.”

South Sudan is one of the poorest and most unequal regions in the world. Finnfund has financed affordable and environmentally friendly energy solutions for telecom towers there. In connection with a Finnfund‑financed project, a local partner supplied an energy solution to a maternity clinic where women previously had to give birth in the dark. Midwives have since been able to improve patient safety and make childbirth a more positive experience.

Thanks to Finnfund’s influence, local companies have also begun encouraging female employees to pursue training and higher positions, as well as offering remote‑work options after childbirth.
“In developing countries, having a child can be a huge obstacle for women. They often have to leave working life entirely because the culture hasn’t allowed them to continue working.”

Global standards help correct inequality

Finnfund has around 1 billion euros invested across more than 100 companies in developing markets. Gender equality within investee companies has long been one of Finnfund’s financing criteria.

Momentum increased after Finnfund joined the global 2X Challenge. This initiative encourages investors to increase the number of women in workplaces, leadership and governance, and to identify value chains and products that support women. Development financiers, impact investors and banks participate. The initiative has created an evaluation framework that helps correct gender imbalances.

This framework provides a benchmark against which Finnfund can set its goals.
“For example, if women make up on average 20% of jobs in Kenya’s energy sector, and in companies we finance the figure is 25%, we are performing above average. Our investee companies are helping correct inequality,” Söderling explains.

In many developing countries, the proportion of women in formal employment is far lower than that of men. Finnfund looks for companies committed to narrowing the gender gap in leadership, governance, and staffing.
“In our portfolio companies, women make up around 40–45% of employees and roughly 30% of leadership,” says Söderling.

Gender equality levels vary widely across sectors. In the energy sector, the proportion of women remains low, while in financial services the numbers are already stronger.
“It’s inspiring to hear about women who have managed to break the glass ceiling. Of course, there is still much work to be done,” Kenneth Söderling concludes.

“For example, if women make up on average 20% of jobs in Kenya’s energy sector, and in companies we finance the figure is 25%, we are performing above average. Our investee companies are helping correct inequality."

Kenneth Söderling, Development Impact Adviser, Finnfund

Published on 26 January 2026