Gender Finance: Delivering Impact

Jessica Espinoza CEO, 2X Global

Sukhvir Basran Board Director, 2X Global and Managing Partner, Resumus Global Partners

Q1. Over the past decade, gender finance has mobilised substantial capital. To what extent has that translated into the way lenders originate, structure and monitor loans — and where do the biggest gaps remain?

Gender finance predates the emergence of today's sustainable lending market. Development finance institutions and impact investors have been incorporating gender considerations into investment decisions for many years.

Over the past decade a number of factors have converged to drive greater standardisation, increased scale and mainstream market participation. As a result, gender finance in the private sector has evolved from a relatively niche segment into a credible mainstream investment strategy.

Several factors have contributed to this evolution, including the growth of sustainable finance/DEI mandates, increasing regulatory expectations around social impact and disclosure, stronger evidence that gender-smart businesses can unlock growth opportunities and deliver competitive financial performance, greater recognition of underserved markets, and significant improvements in gender-disaggregated data.

Another important development is emergence of harmonised frameworks and industry standards — such as the 2X Criteria and, more recently, the 2X Certification — both of which provide standardised definitions, metrics and assessment frameworks that enable lenders and investors to identify, measure and compare gender-related outcomes more consistently. These standards have already been applied extensively across the finance sector market, with more than $34 billion mobilised under the 2X Challenge (a significant share of which was deployed through loan transactions).

Even before the recent politicization of DEI, the adoption of these tools across mainstream lending practices has been uneven, with much of the progress to date driven by development finance institutions with an explicit or strategic focus on gender.

However, a number of fundamental shifts have taken place in integrating gender lens consideration in mainstream finance:

a shift to gender-aware (rather than gender-neutral) investment processes and strategies;
increased sophistication of gender-related key performance indicators (GKPIs) (one of the most common social indicators included in sustainability-linked loans) supported by the evolution of sustainability regulation (e.g. CSRD) and institutional standards (such as 2X Certification) has led to clearer articulation of metrics and more structured use of standards including GKPIs; and
improvements in monitoring and reporting as a result of an increase in gender data-driven performance tracking.

Many of the remaining barriers and gaps are practical rather than conceptual: lenders are facing challenges similar to those seen across the broader sustainable finance market materiality and credibility of KPIs, availability of data, credible benchmarking of targets and the need to ensure measurable impact rather than reliance on indicators that may lack sufficient robustness or substance. In this context, despite the available resources from 2X Global and other organisations, the absence of formal regulation (such as social taxonomies) has led to inconsistent gender-related definitions and metrics. Whilst gender finance has increasingly been embedded into impact frameworks, integration into core risk models or pricing at scale remains uneven.

Taken together, continued improvements in knowledge and awareness of gender-related risk and opportunities, closer collaboration between relevant field-building organisations and the private sector1 and continued integration of social impact analysis and impact are expected to strengthen the influence of gender finance through targeted origination, gender‑linked debt instruments, and improved monitoring.

1. Including 2X Global’s private sector mobilization initiatives at the nexus of gender and climate finance as well as collaboration between 2X Global and Resumus to develop gender lens guidance for the loan market.

Q2. What has the application of the 2X Criteria and 2X Certification shown about the use of measurable gender-related KPIs, both in driving outcomes and in maintaining commercial discipline? What would it take to scale that approach across wider loan and credit markets?

The application of the 2X Criteria has demonstrated that gender can be translated into a structured set of standardised indicators, metrics and shared definitions that are directly usable in commercial decision-making, increasingly aligned with broader market standards and reporting frameworks2.

Their real value is not only in identifying eligible transactions, but in helping lenders and investors define GKPIs that are relevant, measurable and monitorable. This is particularly important in the loan market, where the integrity of sustainability-linked structures depends heavily on whether KPIs are decision-useful and targets are credible.

One of the key lessons is that GKPIs can be closely aligned with factors that lenders already consider fundamental: management quality, workforce stability, customer reach, product relevance and long-term resilience. In that sense, gender is not an “add-on” — it strengthens the understanding of core business performance.

At the same time, experience has shown that simplicity and focus are critical, particularly in a market that is still maturing. Rather than attempting to capture every dimension of gender equality, the most effective approach is to start with a small number of KPIs that are clearly material to the borrower’s business model and strategy, and that can be measured consistently over time.

This is precisely where the 2X Criteria provide a strong starting point. They offer a clear, widely tested framework for identifying relevant areas of focus, which can then be translated into practical KPIs in a lending context. For institutions seeking to go further, the 2X Certification builds on this foundation with a more comprehensive methodology, including a broader set of indicators and a higher level of rigor in assessment and verification.

Scaling this approach across wider loan and credit markets will require three things:

greater consistency in data collection and reporting, including sex-disaggregated data where relevant;
continued development and adoption of practical guidance that translates established standards — including the 2X Criteria and Certification — into lender-friendly applications; and
a disciplined approach to KPI selection and target-setting that prioritises KPIs that are material, decision-useful and proportionate.

In a nascent market, depth matters more than breadth. Establishing a track record of robust, well-structured transactions — grounded in existing standards and aligned with emerging best practice — will be critical to scaling with integrity.

2. Examples include SASB; IFRS Sustainability Disclosure Standards; GRI

Q3. Women remain underrepresented in the roles that shape capital allocation. Beyond improving women’s access to finance, how do we ensure women are also influencing lending decisions, investment committees and portfolio strategy?

A gender-smart loan market is not only about who receives capital — it is also about who shapes how that capital is allocated.

Underrepresentation of women in origination teams, credit committees and investment decision-making roles, risks a financial system that systematically overlooks core risks and opportunities. This is not only a question of representation; it is a question of market effectiveness, financial returns and risk analysis.

Different perspectives can influence how lenders interpret business models, assess growth potential, understand customer segments and design financial products. In particular, where women-led businesses or underserved segments are concerned, a lack of diversity in decision-making can result in missed commercial opportunities.

Progress in this area therefore requires a dual focus.On one side, increasing the flow of capital to women-owned and women-led businesses, as well as to companies that are actively advancing gender equality across employment, supply chain, and products and services.On the other, strengthening women’s participation and influence within financial institutions themselves — including in leadership, credit risk, structuring and portfolio management and through robust and effective governance practices..

These two dimensions reinforce each other. Institutions that are more diverse internally are often better positioned to identify and execute gender-smart transactions externally.

Ultimately, embedding gender considerations into the loan market is not about creating a separate parallel system; it is about improving the functionality and effectiveness of the existing system — by ensuring that both capital allocation and the decisions behind it are informed by a broader and more accurate understanding of the real economy.

The next phase of gender finance in the loan market will be defined not by ambition alone, but by execution and implementation — embedding gender-relevant considerations into the everyday disciplines of lending in a way that is practical, credible and commercially grounded.