A targeted approach to driving gender diversity helps PEG qualify as CDC’s first 2X investment
CDC, the UK’s development finance institution, has made its first investment to qualify for the 2X Challenge: $12.5m of a $15m multi-currency loan facility for PEG Africa, the leading distributor of solar home systems in West Africa.
What is the 2X Challenge?
2X is a major commitment announced last summer by the development finance institutions of the G7 to mobilize US$3bn by 2020 for investment in businesses that benefit women, as entrepreneurs, as business leaders, as employees and as consumers of products and services that enhance their economic participation. The $15m facility that CDC has closed with PEG will count towards the 2X goal.
What is PEG doing to qualify for the 2X Challenge?
PEG has qualified as a 2X investment under three of the five 2X categories: advancing women in leadership; meaningfully supporting its female employees; and implementing a targeted strategy to increase the number of female customers. The company’s improvements in gender diversity have been driven through an extensive Gender Action Plan initiated with technical assistance from Power Africa in 2017, which has included introducing gender-sensitive recruitment strategies, flexible working hours, and encouraging the take up of paternity leave.
As a result of this targeted approach, PEG Ghana has doubled its number of women in leadership, from 22% to 44; has observed a 30% reduction in employee turnover, with women leaving at a 14% lower rate than men; and has spearheaded a company-wide mentorship programme, under which 25% of female participants have been promoted within six months. Alongside successful expansion into new regions and the introduction of new service delivery models that have contributed to higher sales and better repayment rates, this has helped PEG to realise markedly better financial results: between 2017 and 2018, PEG Ghana’s revenue grew 60%, and EBIT improved 26%.
The company, with CDC’s support, will be using these practices as a template to drive improved gender diversity across its markets in West Africa, including Ghana, Cote d’Ivoire and Senegal. Hugh Whalan, CEO of PEG Africa said:
We see diversity in leadership as a true competitive advantage, helping us attract the best people and retain them […] We are delighted that CDC, through the 2x Challenge, has helped us spread the word on this.
Welcoming the announcement, Holger Rothenbusch, CDC’s Managing Director Debt and Infrastructure, said:
“I’m proud that this is CDC’s first investment to qualify for the 2X Challenge, which puts women at the heart of development. 2X commits institutions like CDC to invest and mobilise US$3bn by 2020 in businesses that promote gender equality. PEG is a company that recognises the value of women to their business and is helping prove the case that investing in women is both impactful and drives improved commercial performance. We look forward to working with them further on this journey.”
Arpita Raksit, CDC’s Gender Lead added:
“CDC joined the 2X Challenge to work alongside pioneering businesses that demonstrate investing in women creates social and commercial value. PEG has already achieved significant gains in recognising the importance of gender diversity across its business to better serve its customers. At the same time, it has played a key role in advancing women’s economic empowerment. We look forward to working with PEG as they scale this approach across its business.”
More information on PEG Africa’s extensive efforts to enhance gender diversity is available on the 2X website, here.
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