ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has released guidelines for the issuance of Gender Bonds (GB) to increase financial inclusion of women and encourage female entrepreneurship.
The guidelines, issued in pursuance of Section 172 of the Securities Act, 2015, aim to facilitate companies and issuers of debt securities to diversify their source of financing and provide an additional financial instrument to a particular class of investors.
As a step towards promotion of gender equality, the issuance of GB will improve women access to leadership positions and gender-positive corporate policies, the regulator said.
As per the GB guidelines, all issuers who are eligible to issue debt securities, including sukuk bonds, either by way of public offer or private placement are eligible to issue the said bond, as long as ensuring compliance with the applicable regulatory framework.
The amount of funds raised from the issuance of GB shall be utilised to finance projects related to women uplift and economic empowerment such as, access to finance/credit; micro, small and medium-sized enterprise development; agriculture development; financial literacy and entrepreneurship training, disaster risk management; housing for low income segment of women etc. Like other debt instruments, such as green, social and sustainability bonds, a gender bond can have any type of financial structure as a general bond, a project bond or a securitisation scheme.
Commenting on the issuance of GB, Aftab Ahmad Chaudhry, founder of Women on Boards initiative, noted that women entrepreneurs in Pakistan mostly remain outside the formal economy and access to finance. “This [GB] is one of the many targeted and actionable policy guidances, which the regulators can provide. Investment managers must make use of this initiative and launch some Gender Fund, so that more and more funds of this nature can come to the market.”
He said that after ensuring that women have an increased representation on leadership positions, the SECP’s guidelines on GB will go a long way at encouraging the availability of funds for women businesses in the country.
GBs are a relatively recent development and still a nascent in the field of finance. Internationally gender-labelled bonds have been issued by a variety of entities, ranging from large commercial banks, to NGOs, to multilateral development banks.
Most GB issued have relied on the Institute of Capital Market Association’s Social Bond Principles, the UN’s Sustainable Development Goals or the UN Women’s Empowerment Principles as reference standards.
Published in Dawn, May 20th, 2021