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A Missed Investment Opportunity: Investing in Women in India’s Artisan Economy


July, 2023


Kaylene Alvarez


Businesses operating in the Creative Economy in India are often completely dismissed as unviable investments.

This is true for standard investors like banks, private equity or venture capital, DFIs and often Angel Investors. But it’s also true for impact investors, even though this is a grossly underserved sector with respect to access to finance, and also a sector with incredibly high impact, particularly for gender equity.  

Coincidentally, many of these myths that are used to dismiss investments in the Creative Economy are the same ones that keep investors from intentionally investing in women, in general.  The field of Gender Lens Investing (GLI) — intentionally investing for gender equity — has evolved over the last decade to counter the bias and misperceptions about investing in women, to build an evidence base “de-risking” gender and to show that investing in gender forward businesses (beyond charitable giving) is a driver for economic resilience.

Below are highlights of two common myths about investing in the Creative Economy and Investing in Women.  

Myth 1:
There is no way to invest profitably in micro businesses

It’s true that investing in micro and small creative economy businesses is unique. But that doesn’t mean it’s impossible. It does require a bit of effort to understand industry dynamics and the unique challenges that these businesses face. It also requires a shift in perspective to develop financial instruments and products that work for the industry.

Size: The vast majority of businesses in this sector self-identify as micro because they don’t have full time employees and tend to utilise contract workers. According to a recent IFC report, MSMEs in India (across sectors) account for 30% of India’s GDP, provide employment to 111 million people and contribute to 49% of India’s exports.

Growth: Many of these businesses will never go for IPO or have “hockey stick” growth that Venture Capital (VC) loves. And that’s ok. Investing in the creative economy, and the women in it, is a viable investment opportunity with market rate returns. With the global pressure for diverse and sustainable supply chains, investing in the local creative economy, fuelled by Indian women is a great opportunity to find alpha.

Right Fit Financial Instruments: Financial intermediaries need to think non-conventionally. Investing in the Creative Economy requires that the financier understand the dynamics of the businesses invested in, rather than creating an “off the shelf” product that the SMEs have to retrofit to their needs. At Athena Capital, we provide unsecured, short term (less than 12 months) working capital loans. We begin and end with the cash flows and underwrite for both the ability and willingness to repay. This allows us to customise repayment schedules so that we get repaid at “peaks” in the cash flows, not “valleys”. This aligns incentives for both Athena Capital and our Creative Economy investments, which has helped to keep our loan losses less than 10%, even through COVID. We’ve seen our Creative Economy businesses thrive because we are able to give them repayment terms that match the terms of purchase orders as well as provide a buffer for volatile supply chains.  

To further illustrate the investment gap, the same
IFC report found that women-owned micro enterprises in India have an aggregate credit need (not investment, but just credit) of ₹83,600 crores (~$10.4 billion). Estimates indicate that between 60%-70% of all credit needs for micro and small businesses in India is completely unmet. 

Myth 2:
Handicrafts is something that only women care about

The creative economy is more than just handicrafts. It’s also fashion and home goods, healthcare and beauty, and F&B. Women make up half the population in the world, and India is no exception. So why dismiss an industry or a business as unimportant when half the population is interested in it? Investors have segmentation strategies that focus on sectors of the population that are far smaller, with less opportunity, less impact and not nearly as underserved as half the women in India. 

Decision Makers: Men, who control the vast majority of investment decisions, run businesses differently, and tend to look at risk, opportunity and viability from a different perspective than women. For example, women tend to run less formal businesses, which can be frustrating for male investors. Women also tend to work in industries that men don’t have a fundamental understanding of like the creative economy. This is why we need more women making decisions about how, when, why and where capital is allocated. A 2019 IFC report on global trends in emerging markets VC and Private Equity (PE) showed that:

  • Only 11% of global senior investment professionals in emerging markets VC/PE are women

  • Nearly 70% of senior investment teams are all male, globally

  • Funds with gender balanced senior investment teams return, on average, 1.7% more than non-gender balanced teams (male or female) and a 20% higher average Internal Rate of Return (IRR)

Without women in positions to make or influence investment decisions, we will continue to fail to effectively represent businesses that women found or own, where women work, and that serve women clients.

Kaylene Alvarez

Kaylene is the Founder of Athena Global, an impact finance company committed to ensuring that every viable early-stage business owner has no capital constraints. She is a development finance specialist with over 25 years of experience and is deeply passionate about using finance as a tool for social good. Kaylene has an MBA from the Wharton School and a Master’s Degree from Johns Hopkins.

Keep exploring:


Empowering the CMH Sector with an Artisan-Centric Strategy


Restorative Investing for a Just and Regenerative Economy 

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Why India Needs to Seriously Invest in its Cultural Economy

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