Small- and medium-sized enterprises (SMEs) are the largest segment of the African economy and yet African SMEs as a business and investment class are under-performing and are rarely gender smart. They do not currently perform well enough to justify the associated transaction and portfolio management costs that would be incurred by investors, and they do not have the resources or capacity to fully support women’s economic empowerment. So, what are SME investors to do? To address the need for improved portfolio and impact results, USAID, RENEW, and a consortium of leading gender lens investing (GLI) initiatives, including members of the 2X Challenge, set out to support the creation of GLI success stories in Africa.
The underlying assumptions for the 18-month project supported by the USAID Gender Equality and Women’s Economic Empowerment Hub were threefold: 1) Gender-balanced executive teams deliver superior performance than single-gender dominated teams; 2) fund managers need quick and simple tools to share with SME managers to help them run successful companies; and 3) these tools can be gender sensitized to drive gender equality and SME performance.
Keeping these assumptions in mind, the project team created the SME Gender Growth Acceleration (SG2X) Playbook, a gender-smart investment toolkit for fund managers and SMEs operating in Africa, designed to help them build gender-smart SMEs with gender-balanced executive teams that deliver attractive financial and impact results.
Now, we understand and fully recognize that there is a lot of great activity already occurring within the GLI space. The internet is full of amazing reports, case studies, and tools for GLI investing, some even targeted specifically for SMEs.
Unfortunately, most SME fund managers do not have a lot of time or resources to search, read, extract, and use these tools, which can be hundreds of pages in length and difficult to parse out. SME fund managersand the managers in their portfolio companies need quick, easy to access tools designed to achieve dual objectives: financial and impact results.
So, how is the SG2X Playbook different from other GLI resources? The SG2X Playbook builds on these existing resources (i.e., we don’t want to reinvent the wheel, but rather strengthen it) and provides a systematic, replicable, and tested approach in the form of a “Playbook” designed to help grow SMEs into gender-smart success stories that deliver competitive financial and impact results and demand attention from larger private sector investors. In short, the SG2X Playbook outlines a fund manager’s investment game plan, including gender-smart policies, tools, trainings, and best practices to maximize portfolio results. The SG2X Playbook is comprised of the following components:
Policies: The Playbook includes a comprehensive Employee Handbook that presents SME entrepreneurs, executives, and managers with standardized, gender-smart policy templates and language they can tailor to the needs and reality of their business.
Materials & Standard Operating Procedures: The Playbook includes a module-based narrative outlining the key subject areas of the Playbook, providing best practices for execution and overall instruction on how to use the Playbook through Standard Operating Procedures (SOPs).
Gender-Smart Exec’s Training Program: The Playbook includes a curriculum, instructional videos, and presentation materials of the Gender-Smart Exec’s Program — a module-based executive capacity building training program that helps SME executives broaden their skill sets across nine critical topics. This program serves as the main training for Playbook implementation within SMEs.
Tools, Resources, Templates, etc.: The Playbook includes a suite of more than 45 practical tools that will aid in the execution of the Gender-Smart Exec’s Program and implementation of the Playbook’s guidance. These resources include, but are not limited to, HR tools (e.g., interview templates, performance review templates, etc.), financial tools (e.g., budget templates, cash flow management templates, accounting and finance manuals, etc.), and management planning tools (e.g. annual management plan; mission, vision, and long-term statements, impact thesis).
Renew Capital is an Africa-focused impact investment firm that backs innovative companies with high-growth potential. Renew Capital manages investments made on behalf of the Renew Capital Angels, a global network of angel investors, foundations and family offices who seek financial returns and sustainable social impact. For the latest on investing in Africa, subscribe and follow us at our social links below.