December 22 is celebrated as Mother’s Day in Indonesia, so to all mothers in the country: happy Mother’s Day! Let’s take a moment today to thank and express our love for the mothers and women in our lives.
For this special day, our blog post will discuss about women and investing and why the low number of women investors is a cause for concern.
Investing has always been a male-dominated field, whether it’s stock, real estate or newer class assets like peer-to-peer lending. The Indonesia Stock Exchange (BEI) had more than 66,000 men who registered as investors throughout 2016, and 21,470 of them have been actively investing in stock. Meanwhile, of the 53,657 women who newly registered at the BEI last year, only 472 have remained among active investors in the stock market.
So many people would think it is only natural that men are the ones who go out and venture into the investment world, because they assume that men are just better at investing than women. But those who understand how the investment world works would beg to differ. This includes Kim Kiyosaki, the author of Rich Woman. In her book, the entrepreneur and real estate investor argues that the question of who is better at investing has nothing to do with gender and that women too can be savvy investors.
The notion that men are generally better investors than women has also been proved wrong in a recent survey from financial services giant Fidelity Investments. Fidelity sifted through more than 8 million investment accounts and found that women save 0.4 percent more of their paycheck than men. And when they invest, women earn more from their investment annually, also 0.4 percent higher than what men are earning.
So what keeps women from investing?
Ellen May, a renowned woman entrepreneur, financial author and stock trader, said in an interview with Mekar it is often the case that women are reluctant to go into investing “because they see investment as too complicated and difficult to understand”.
In Mekar, an online platform for peer-to-peer lending, the number of registered female funders is also lower than the number of male funders. Funders are those who use Mekar’s website to fund small business loans. Seeing that investing, including in peer-to-peer lending, is still considered a men’s domain, it is likely that other P2P platforms in Indonesia are experiencing the same thing.
But female funders in Mekar are a strong force. Many are actively investing and helping Indonesian small businesses grow. One of them is Dian Adryani, who has funded over 100 small business loans through Mekar.
Dian has been into investing for around three years. Aside from investing in peer-to-peer lending in Mekar, the 33-year-old housewife has term deposits with banks and is trading stocks. “I believe it is important to invest because our investment can act as a security blanket for the future,” she said.
Not a risk taker? Consider secured investments
Like many women, Dian is risk-averse and her main consideration when investing is security of her investment. The prospect of losing money is nerve wracking for a lot of women investors. This is why Dian decided to invest her money through Mekar, which has maintained a 0% rate of late repayments. Mekar also offers its funders a 100% guarantee on their capital should a borrower defaults on a loan they have invested on.
“I made a choice to invest through Mekar because it offers higher returns on my investment and there is a 100% guarantee on my capital,” Dian said, adding that the guarantee was what won her over.
Ellen May, the entrepreneur and stock trader, said she hoped more women can find the courage to try things that may seem foreign to them, like going into investing and stock trading. “If you don’t try you won’t know whether or not you can be successful. When you try, there is a chance you might make it,” she added.
She noted that there is a growing number of women who have expressed their interest in investing during the trainings she gives to people who want to learn about stock trading. This could mean there is a growing understanding among Indonesian women of the importance of investing and how having a source of income can empower them.
As Ellen says, “Investing is important for everyone. For us women, by investing we can become more than just a pretty face, we can be productive and independent and even (financially) support our spouse.”