Tania Beard: Launch of the Senegal Women’s Investment Club - A Journey to the “Missing Middle” in Women-led Investment

By Tania Beard, Francine Ndong and Salma Ait Hssayene

Women-led investment has slowly taken off in recent years in developed economies – initiatives such as 37 Angels in the U.S. and UAE-based WOMENA are prime examples. However, in the developing world – where the financing gap is the largest – women-led investment is still an anomaly. Africa has only a handful of women-led investment initiatives in the formal financial market: Kenya Women Investment Company, Women's Investment Portfolio Holdings Limited in South Africa, Alitheia and Women Investors Fund (NWIF) in Nigeria – and still, only NWIF dedicates a significant portion of its assets to women investees.

In Francophone West Africa, what we have in abundance are ‘tontines’, or informal revolving savings and credit groups. Women from across the socio-economic spectrum participate, even if they hold a formal bank account; some estimate tontine membership as high as  80% of the adult female population in urban areas. Solidarity with other women, in addition to the rapid, flexible, and liquid cash management system offered by the tontine, are key motivating factors for membership. The amounts collected vary significantly, but can reach tens of thousands of dollars per month. However, no interest accrues and investments are informal, limited to small personal projects. In its current form, the tontine cannot significantly move financial markets.

Here we have a “missing middle” between the informal tontine and the formal women’s investment funds. How do we bridge this gap and support the evolution of tontines towards broader financial impact, while maintaining the powerful social aspects of tontines?

We have in front of us a prime opportunity: huge, untapped potential for women-led investment to drive financial markets and pioneer a shift away from African women as “recipients of financing” to “drivers of financial markets”.

"Investment is not something that women do in Senegal. We help our families and look after our kids. Even when we see a woman drive a car we say that her husband bought it for her. That’s how people think. The Women’s Investment Club is a beautiful opportunity for women to take a pro-active role to drive financial markets, and serve as role models for other women – showing that women-led investment can work."

- Women’s Investment Club Participant

Introducing the Senegal Women’s Investment Club: a journey to find answers

The Senegal Women’s Investment Club (WIC), positioned between the tontine and the formal fund structure, launches today on International Women’s Day in the presence of UN Women, Regional Stock Exchange Securities (BRVM), and management and intermediation company CGF Bourse.  A commercially-oriented investment platform where women can learn from one another, WIC is the first initiative in the WAEMU region to mobilize exclusively female investment into a broad portfolio that over time will bridge the gender finance gap by supporting women-led businesses. In the short-term, the Club will build women’s capacity to invest, while supporting the growth of female entrepreneurship and leadership in the long-term. However, our fact base is thin and there is much we do not yet know. The WIC journey will be reflective to better understand issues, and test and evaluate solutions.

The idea for WIC first originated in a discussion hosted by Christine Lagarde, Managing Director of the International Monetary Fund, exactly one year ago in Dakar. The meeting brought together Senegalese businesswomen and public figures to discuss challenges hindering the growth of female-led businesses and the economy as a whole.

To address these challenges in an iterative, exploratory process, WIC will connect women with entrepreneurial experience, financial resources, and management skills to investment know-how, networks, and capacity. It will do so in two district phases:

Unlike traditional investment clubs where decisions are made by a committee of non-professionals in small-scale mutual funds, WIC will start investing through an existing mutual fund, engage the services of a fund manager – CGF Bourse – and target an overall return on investment through a diverse portfolio. This way, participants can build their expertise in the first year, co-define their financial objectives and shared challenges, and develop a vision to put their money to work in practical terms.

Once the Club has consolidated its returns and investment knowledge, it will transform into an investment fund, where the women will make the investment decisions with a focus on women-led businesses.

 

Get Involved with WIC

WIC will launch with a target upfront investment of 250,000,000 CFA (500,000 USD), split among an initial 30-50 women. Currently participants include a range of women from CEOs to Directors of professional services companies. The Club is looking for more women to join.

The Club will need the support of a professional services firm to carry out a robust market study to identify women-led investments. Finally, funding will be needed for a mentorship program that will create a global female investor coaching network. WIC is looking for support on both these inputs.

If you are interested in WIC, please contact francine.ndong@dalberg.com for more information.

 

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