In today's capitalist society, we must actively address and reduce growing inequalities, providing opportunities for those excluded from positions of power and privilege. What if we could provide everyone access to financial resources and other necessary tools to participate in the financial system, regardless of their background?
These were discussed during the impactful fireside chat on the book
The Defiant Optimist: Daring to Fight Global Inequality, Reinvent Finance, and Invest in Women, authored by Durreen Shahnaz, a former Adjunct Associate Professor at the Lee Kuan Yew School of Public Policy (LKYSPP). The LKYSPP's Vice Dean (Research and Development) and Wilmar Professor of Asian Studies, Kanti Bajpai, chaired the event.
Shahnaz's book unveils her unwavering commitment to providing society's underdogs with the tools needed to access finance, making them equal participants in the financial system as other players, transforming their lives and making the financial system more robust and inclusive. As the CEO and Founder of
Impact Investment Exchange, she writes about key milestones of her achievements, such as creating impact measurement accounting through her research while she was at the LKYSPP, launching the world's first social stock exchange, and the world’s first gender bond to be listed on a public stock exchange. The
"defiant optimist" mindset, central to the book, propelled Shahnaz to challenge the financial system and the ecosystem around it that traditionally favoured only the privileged few.
Harnessing the power of finance for social good
Shahnaz explained the title: "Defiance is quite a strong word. It has courage and anger in it. Defiance comes from the fact that if you take on a system that has been unjust and exclusive, you need that kind of chutzpah to break through it to make it just and inclusive. But you also need the optimism to know you are going to a good place and that ultimately inclusion is good for everyone."
Shahnaz attended Smith College in the US for her undergraduate degree. Her book recounts her involvement in the anti-Apartheid movement during her university days, influencing institutions like Smith to divest from South Africa.
She then kicked off her career in Wall Street, specifically at Morgan Stanley; it was a deliberate choice that would allow her to understand finance comprehensively. She aimed to leverage this knowledge to benefit the wider world. She absorbed the necessary insights and returned to her homeland, Bangladesh, to serve the underserved.
With Grameen Bank (recipient of the Nobel Peace prize in 2006), a microfinance organisation and community development bank, Shahnaz empowered Bangladeshi women, guiding them in taking control of their lives while creating micro businesses through the loans they received from the Grameen Bank and promoting independence, such as teaching them how to sign their names on their loan document as 90% of the women were illiterate and never had the opportunity for education and thus even learn how to sign their names
On a mission of financial inclusion: Connecting Wall Street to the Backstreet
In 2009, Shahnaz defied convention again when she founded Impact Investment Exchange (IIX) to put women, underserved communities, and climate at the forefront of financial markets and effectively "connect Wall Street to the Backstreet".
Over the past 14 years, IIX has built the world's first social stock exchange,
Impact Partners™, which brings together impact enterprises and investors. Within its first few years of inception, Impact Partners™ became the world's largest private placement platform dedicated to impact investment.
In 2017, IIX made history again by launching the world's first gender-lens, impact investing security listed on a stock exchange – the
Women's Livelihood Bond™ (WLB) Series. Since then, the WLB Series has raised over US$128 million from global investors across five issuances and empowered more than 1.3 million women, girls, and gender minorities. IIX will be pricing the 6th issuance (WLB6) at the end of 2023 which will be a bond of US$100 million.
With the success of the WLB Series, IIX sought to encourage similar bonds in the market by launching
Orange Bonds, the world's first asset class built for the Global South, and the 99 per cent as a solution to financing gender equality. Orange bonds sit at the intersection of gender equality and climate action.
"Orange is the colour of [the United Nations] Sustainable Development Goal 5, which is about gender equality," Shahnaz explained. The Orange Movement is part of endeavours to mobilise US$10 billion in capital through various Orange initiatives to empower 100 million women, girls, and gender minorities by 2030 while making women the solution providers for climate action.
Thinking sustainably about an unstable future
Throughout the fireside chat, Shahnaz consistently advocated for the importance of education in raising awareness and nurturing thinkers who can create sustainable systems for the future.
She highlighted the regressive economic status of Bangladesh due to climate change, emphasising its disproportionate impact on women, leading to alarming issues like human trafficking. To Shahnaz, the solution to the climate crisis is financial inclusion and sustainability.
Reflecting on her experience teaching social innovation and entrepreneurship at the Lee Kuan Yew School of Public Policy in 2004, Shahnaz posed a fundamental question: "Do you want to sustain the system we have today, full of top-down solutions that benefit a small group of capital owners? Or can we create a system that values, measures, and rewards positive impact on people and the environment?"
Her book explores the potential of harnessing "power and finance systems" to fight inequality and develop the necessary infrastructure. She writes, "Three sectors of society – public policy, civil society, and the private sector – come together in an important nexus. This is the social innovation zone … where it is possible to sustainably create social equity and justice."
Day to day at IIX, Shahnaz demonstrates that fighting inequality is not about altruism but about effective financial sustainability. She proudly states, "Through IIX, we have now put in the market over US$300 million, and we attribute that to the emphasis on verifying impact and practicing what we preach, connecting women in the last mile to the financial system and empowering them to play a role. Also, these women are ensuring climate action and reducing the operational risk of the investments. To date IIX has not had a single dollar of credit loss and we attribute that to the millions of women we work with.”
The future of financial inclusion is "Orange". By leveraging women as solutions to global issues and giving them the keys to financial success, we can actively reshape the economic landscape and create a better world for all.
About Durreen Shahnaz
Durreen Shahnaz is a Bangladeshi-American entrepreneur and the CEO and founder of Impact Investment Exchange (IIX). A global leader in sustainable finance and impact investing, she is a 2017 Oslo Business for Peace Award Honoree, a financial rainmaker in Forbes 50 over 50, and an Asia Society Game Changer Awardee.
Over the last 14 years, IIX has connected the Back Streets of underserved communities to the Wall Streets of the world and has unlocked close to US$300 million of capital impacting over 150 million lives and promoting climate action across the globe.
About The Defiant Optimist: Daring to Fight Global Inequality, Reinvent Finance, and Invest in Women
Global inequality is growing. Financial markets disenfranchise women, the 99 per cent, and the planet itself. But what if we found the source of power and turned it inside out? What if we made the tools of the system available to all?
When she launched the world's first stock exchange for social enterprises, Durreen Shahnaz started more than a new financial system; she sparked a movement. Defiant optimism – the stubborn belief that systems that enrich the few can be transformed for the good of the many – requires an indomitable spirit. Sharing her story for the first time,
The Defiant Optimist: Daring to Fight Global Inequality, Reinvent Finance, and Invest in Women, Durreen illuminates what investing in those excluded from networks of power and opportunity requires.
Website:
defiantoptimist.com