How to Accelerate the Growth of the Gender Bonds Market

Providing women entrepreneurs in Asia and the Pacific much-needed capital can help drive economic growth. Photo credit: ADB.

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Gender bonds can scale up women’s access to finance and promote gender equality at the same time.


Gender bonds can help expand lending to women and advance gender equality.

The experience of the Asian Development Bank (ADB) shows that gender bonds can be an effective instrument in helping countries in Asia and the Pacific advance gender equality and attain their sustainability goals. In February 2023, ADB announced the subscription of 18.75 million Georgian lari (or about $7.1 million) to the first certified gender bond  in the South Caucasus, issued by Crystal Microfinance Organization. Crystal will use the proceeds of the gender bond to provide financing to women-owned micro, small and medium enterprises in Georgia according to its certified Social Bond Framework. Earlier, ADB raised 8.4 billion Kazakhstan tenge (KZT) (about $20 million) and KZT14 billion (about $32 million) in two gender bond issuances. The proceeds will help support long-term affordable mortgage financing for eligible women borrowers in Kazakhstan.

At present, only a negligible portion of sustainable and green bond issuances globally prioritizes gender goals. Only 1% of bonds in support of the Sustainable Development Goals promote gender equality. One estimate further suggests that only about $17 billion in assets are gender-labeled financial products within a global sustainable investment universe of over $40 trillion.

Ways to hasten the integration of gender into sustainable bond markets include increasing issuer and investor understanding, dismantling misconceptions, and improving performance data, as well as encouraging financial institutions to take on a more active role.

This article provides an overview of gender bonds based on an ADB report, their impact on gender equality and women empowerment, and how to accelerate the market’s growth.

What are gender bonds?

Gender bonds are among the global debt capital market instruments being used to channel financial resources to support sustainable development. These are use-of-proceeds bonds that finance projects that promote women empowerment, gender equality, and access to finance. They also combine debt and some level of impact on a predefined group of women, such as leaders, entrepreneurs, and community stakeholders, in specific gender equality areas. Use-of-proceeds bonds can finance women-led small- and medium enterprises and fund companies that advance gender equal standards.

Gender considerations can also be integrated into performance-based bonds, which reward the achievement of objectives (Figure 1). The performance-based approach is often seen in more developed economies.[1]

Most of the use-of-proceeds bonds are being deployed in emerging and developing economies. Issuers allocate the proceeds for types of projects specified by the gender bond framework, which defines the activities and serves as a tracking tool. Based on a forecast of funding requirements in the pipeline, issuers predefine how much of the proceeds will go to all or just a part of these gender equality-related projects.

Figure 1: Gender Bonds Classifications

Source: Asian Development Bank.

In the performance-based approach, gender-themed projects are combined with other types of projects that are eligible according to Social Bond Principles or Sustainability Bond Guidelines, such as loans for affordable housing or access to green technologies. It provides an alternative way for bond issuers that want to include gender equality targets in a funding program yet lack a sufficient pipeline of eligible projects for a use-of-proceeds gender bond. Such sustainability-linked bonds seek to encourage the issuer to achieve sustainable outcomes or performance targets that are assessed through quantifiable key performance indicators.

Why are gender bonds important in expanding women’s access to finance?

Advancing gender equality is a key driver of growth, especially in the post-COVID-19 pandemic recovery environment. Gender bonds can help raise awareness of the need for women’s financial inclusion and scale up lending to women, who are among the most climate-vulnerable in the region.

Gender bonds provide access to resources and women’s economic empowerment by mobilizing much-needed financial resources from traditional financial institutions to women-owned or -led micro, small, and medium-sized enterprises (WMSME). The WMSME financing gap in emerging markets is estimated at $1.7 trillion, with the gap in Asia amounting to more than $1.3 trillion.

What challenges hinder the growth of gender bonds?

Challenges to issuing gender bonds or integrating gender considerations into social, sustainable, and sustainability-linked bonds include

  • unfounded misconceptions about the benefits and complexity of gender bonds;
  • limited participation of issuers due to predetermined eligible project categories or activities;
  • additional costs for the issuer; and
  • dispersed data on gender bonds and no systematic tracking of gender bond issuances.
How can the uptake of gender bonds be improved?

Define for issuers and investors the business and impact case for gender bonds. Emphasize the long-term financial and social value of integrating gender as a core theme in the sustainable finance agenda. These include helping mobilize liquidity from local players, develop local capital markets; improving the overall quality of financial systems by increasing the availability of diversified investment vehicles; and increasing public awareness of the importance of providing financial support for women-led enterprises.

Intentionally integrate gender components into sustainable finance solutions. Integrating gender projects and/or targets into the broader use-of-proceeds bond categories (social and sustainability), or integrating gender equality objectives into sustainability-linked bonds under the performance-based approach may also be considered.

Highlight the potential benefits of gender bonds. Issuers can demonstrate their leadership in advancing gender equality through these financial instruments. At the same time, they can diversify their investor base and leverage new sources of financing. Also, issuers can subsequently be included in sustainability indices that underline a business’ commitment to social and environmental causes.

Consolidate data on gender bonds. Organized data enables measurement, and data analytics can show the impact of gender bond investments to financial institutions and companies. Evidence-based impact evaluation also helps advance improvements in gender equality areas.

What could spur the growth of the gender bonds market?

Four catalysts could boost the growth of the gender bonds market.

  1. Multilateral development bank and development finance institutions should consider continuing with and expanding their role as investors, advisers, and co-issuers with private partners in emerging markets.
  2. Issuers should lean in on gender bonds and leverage the expanding range of resources available, such as 2X Collaborative, an industry body for gender lens investing, and Bonds to Bridge the Gender Gap, a global guideline for gender-responsive sustainable debt.
  3. Social impact investors should demand from issuers a deeper and quantified understanding of gender bonds’ financial returns and their impact on women’s economic empowerment.
  4. Standard setters, such as the International Capital Market Association, should consider developing principles and guidelines for issuing a gender bond distinct from those for social bonds.

[1] International Monetary Fund (IMF). 2022. Sustainable Finance in Emerging Markets: Evolution, Challenges, and Policy Priorities. Washington, DC. 


Asian Development Bank. Georgia: Crystal Gender Bond Project.

ADB. Kazakhstan: Promoting Gender Equality in Housing Finance Project.

G. Garzon dela Roza and J. Romero. 2023. Gender Bonds: From Incidental to Center Stage. ADB Briefs. No. 243. Manila: Asian Development Bank.

Gisela Garzon de la Roza
Senior International Consultant, Gender Equality Division, Climate Change and Sustainable Development Department, Asian Development Bank

Gisela Garzon de la Roza focuses on integrating a gender inclusive approach in private sector investments and operations, with emphasis on gender finance. Before joining ADB, she led gender and social impact research and implemented gender-inclusive solutions in access to MSME finance programs for women and youth-led businesses in various regions. She holds an M.A. in Policy & Development Management from Georgetown University and a Master of Leadership in Development Finance from the Frankfurt School of Finance.

Joanna Maria Sarah Romero
Gender Finance Expert-Consultant, Private Sector Operations Department, Asian Development Bank

Joanna Romero is the Lead Gender Finance Expert at Women’s Finance Exchange (WFX), an initiative of the Asian Development Bank. In her role, she designs and implements technical assistance support to WFX partner financial institutions. Joanna specializes in the financial inclusion of SMEs, women’s economic empowerment, and sustainable finance and has extensive experience across Asia and the Pacific, Latin America, and Sub-Saharan Africa. Joanna has a Master of Arts degree in International Trade & Investment Policy from George Washington University.

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The Asian Development Bank is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region. Its main instruments for helping its developing member countries are policy dialogue, loans, equity investments, guarantees, grants, and technical assistance.

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