Queer Lens Impact Investing: Country Selection

Data Sources

  • Population size and GDP per capita as a proxy for market size
  • Economic growth rate as a proxy for market dynamism and conditions for entrepreneurial activity
  • World Bank Ease of Doing Business Index as a proxy for ease of setting up an enterprise and navigating the regulatory requirements as an entrepreneur
  • IFC’s MSME Finance Gap as a proxy for the (mal)functioning of local credit markets
  • GEDI’s Global Entrepreneurship Index (GEI) as proxy for the health of the entrepreneurship ecosystem
  • Estimated openness to LGBTQIA* individuals as measured by ILGA-Europe’s Rainbow Index, Transgender Europe’s Trans Rights Europe Index, and the Global Index on Legal Recognition of Homosexual Orientation (GILRHO)

Applying the Framework to Eastern Europe

iGravity: Country Selection Framework

Learnings from the Framework

Economic Indicators

  • Population size: We initially set a somewhat arbitrary minimum population size of four million for a country to be considered. As the case of the Slovak Republic has shown (in hindsight), this was too low to generate a meaningful pipeline of potential investment opportunities. (Alternatively, one could also argue that we didn’t reach deeply enough into the communities — see below). While the higher GDP per capita and better Ease of Doing Business and GEI rankings would point to the Slovak Republic, market size outweighed these three factors in favour of Poland.
  • GDP/GDP per capita/GDP growth rate: GDP reflects the size of a country’s economy (to a degree). However, given our focus on the Global South and East, where the informal sector accounts for a significant, often larger, portion of the economy, we know that the lived realities for people in a country can be very different to that suggested by the GDP (1). We also concur with the critique of using GDP as a factor for success and well-being, given the potential externalities associated with achieving such an outcome. We also take the view that the situation for LGBTQIA* communities is reflected even less, given widespread marginalisation and disenfranchisement. While we do not suggest completely discounting GDP, we do suggest using it as a supporting data point rather than as a lead indicator and also propose using GDP on a purchasing power parity basis (GDP PPP).
  • Ease of Doing Business: There were two primary drivers for using Ease of Doing Business rankings as a key indicator. On the one hand, they measure the ease of setting up a business, the regulatory environment for businesses, and access to funding. On the other hand, they also provide an indication of the attractiveness of a country for foreign direct investments.(2)
    Given the nascent quality of queer impact investing, we wanted to strike a balance between choosing a country that is representative of the region and finding a conducive entrepreneurial environment. In hindsight, we realise that we didn’t always follow through on this. Mexico ranks first in Latin America; South Africa is in the top four of Sub-Saharan Africa; while the Slovak Republic is very middle-of-the-road in Eastern Europe. Of course, there were other indicators that played into our decision making, but we would have probably sought a more stringent approach if we had analysed our priorities in greater detail during the assessment.
  • MSME Finance Gap: The MSME Finance Gap assesses the financing needs of micro, small and medium-sized enterprises (MSMEs) versus actual lending in a country. At the time of writing, developing markets had a financing gap of approximately USD 5 trillion! From an investment perspective, the MSME Finance Gap is one possible illustration of the market potential in a given market. While relevant, the lack of access to finance appeared much more pronounced for members of the LGBTQIA* communities than the MSME Finance Gap suggested. Hence, even in countries where the MSME Finance Gap may appear small, the reality for members of queer communities may be very different. At least in the initial stages of queer impact investing, the MSME Finance Gap will provide an additional data point, although we believe it is not reflective of the situation of our target audience.
  • Global Entrepreneurship Index: The design of the GEDI’s Global Entrepreneurship Index (GEI) is geared towards countries with a strong entrepreneurial infrastructure. As our first pilot project in South Africa has shown, the entrepreneurial ecosystem in South Africa is gaining a good deal of momentum, with many great initiatives from the state, foundations, universities, entrepreneurs, etc. However, this very ecosystem doesn’t seem to be accessible by large parts of the LGBTQIA* population. Hence, entirely new networks and platforms will need to be established as a segue to deeper integration in the economic supply chain. We therefore concluded that we should exclude GEI as an indicator, and we note that the index will be discontinued and replaced by another one that is more focused on digital entrepreneurship.

LGBTQIA* Indicators

  • ILGA-Europe’s Rainbow Index: The Rainbow Index is the result of a comprehensive analysis of LGBTQIA* rights across Europe. Its recent inclusion of civil society space factors and an increased focus on trans and inter communities reflects the need for greater sensitivity and recognition. We note the limitations of the index due to its geographical focus on Europe. Equaldex may serve as a possible alternative, but we lack the practical experience to offer an informed opinion about that.
  • Transgender Europe’s Trans Rights Europe Index: We were initially concerned about reaching all parts of the LGBTQIA* communities, in particular people from rural areas and those individuals who are most marginalised. We therefore decided to give particular attention to trans communities by adding the Trans Rights Europe Index on top of the Rainbow Index. We appreciate that some of the factors measured may overlap with the Rainbow Index, but we felt this provided a great opportunity to think through our priorities when it comes to the most marginalised groups in a country.
  • Global Index on Legal Recognition of Homosexual Orientation (GILRHO): We decided to drop GILRHO as we felt the Rainbow Index already covered the pertinent topics of the index.
  • UCLA Global Acceptance Index: We added the UCLA Global Acceptance Index retrospectively to account for potential discrepancies between the regulatory environment (covered with the Rainbow Index and Trans Rights Europe Index) and social acceptance within a country. The regulatory environment in South Africa made it relatively straightforward for us to advertise our activities and find localities. If we had run our pilot project in a country where legal protection was not granted or social acceptance was very low, we would have faced many additional challenges.
  • Organisational reach/local partnerships: We found that our own network of friendly organisations and local partners were crucial to the success of our endeavours. We relied heavily on our partnerships to reach the LGBTQIA* communities and encountered much goodwill along the way. In hindsight, we believe it is the local organisations supporting such a project that make it a success. In Mexico we hugely benefited from FME LGBT+’s standing in the communities, while in South Africa the PLUS. LGBTI+ Business Network was invaluable. In contrast, it was significantly harder to connect in Eastern Europe, where our network is not as strong.

Final Thoughts

About Dreilinden gGmbH

About iGravity AG



Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store


Dreilinden is a Hamburg-based foundation dedicated to advancing societal acceptance of gender and sexual diversity.