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Women & Economy

Women Entrepreneurs Overcoming Barriers in Mexico

Verónica Morales has a small-scale flower-growing business near Mexico City which she started thanks to a loan. Credit: Emilio Godoy /IPS

MEXICO CITY, Mar 8 2013 (IPS) - The culture of entrepreneurship is weak among women in Mexico, despite the positive influence that it has on women’s development, in a world where women continue to face greater obstacles than men when it comes to setting up and running a business.

Like in other countries of Latin America, women entrepreneurs in Mexico face institutional barriers and hurdles in access to training, financing and markets, which are added to the physical, sexual and economic violence they suffer, according to international and local studies.

“The majority of women entrepreneurs are in the non-agricultural sector, because women don’t have access to land, which means most of them are in more urbanised areas,” Marcia de Castro, the United Nations Development Programme (UNDP) resident representative in Mexico, told IPS.

In this country, entrepreneurs represent just under five percent of the economically active population. But of that proportion, only 2.4 percent are women, according to the World Bank.

Women represent 46 percent of the country’s economically active population of 50 million people.

In Latin America, on average, only three out of 10 entrepreneurs are women, according to the multilateral lender.

According to the national statistics institute, INEGI, seven million of Mexico’s 19 million households are female-headed, in a country of nearly 117 people.

In 2010, the income of male-headed households in urban areas averaged 780 dollars a month, compared to 507 dollars for female-headed households. In rural areas, the averages were 351 and 273 dollars a month, respectively.

“Without adequate financial products, women cannot grow their businesses,” said Leticia Jáuregui, director general and founder of Crea Comunidades de Emprendedores Sociales, a non-governmental organisation that supports social entrepreneurs,

“We started out teaching women the value of what they are doing,” she told IPS. “They have all faced the same challenges, and have worked them out in different ways.

“Investing in women provides enormous social dividends,” said Jáuregui, whose organisation provides advice and training on accounting and productivity to some 1,200 rural micro-businesses set up by women.

Thanks to this, the women’s incomes have increased 50 percent on average, to between 7,800 and 15,000 dollars a year, she said. And 90 percent of the micro-enterprises that have received assistance from CREA have been successful, while 88 percent now have formal accounting systems.

Women entrepreneurs “face legal barriers and obstacles to accessing capital and markets. Financial products are inflexible, set difficult conditions, and are costly. High quality products are lacking,” said David Gough, chief investment officer of Women’s World Banking, a microfinance network of 39 financial institutions in 28 nations.

The agriculture ministry’s programme for women in agriculture provided 78 million dollars in 2012 to more than 4,000 productive projects that benefited some 30,000 women. This year, it plans to provide 57 million dollars.

In addition, since it took office in December, the government of conservative President Enrique Peña has been designing a cash transfer programme for female heads of households, and is creating a National Institute of the Entrepreneur to aid micro, small and medium-sized businesses, with a special focus on women.

Of Mexico’s women entrepreneurs, 84 percent own small companies that employ between two and five people and “are vulnerable to factors like the market and prices,” said the UNDP’s de Castro.

She also said that “26 percent work less than 35 hours a week, because they have to strike a balance with their family life. Besides, their incomes are lower than those of men.”

The 2009 time use survey conducted by INEGI found that men dedicate 53 hours a week to productive work and 12 to domestic tasks, while women dedicate between 40 and 45 hours to economic activity and over 20 to family care and household maintenance.

In its 2012 study “The Effect of Women’s Economic Power in Latin America and the Caribbean”, the World Bank underlined the important role played by women in reducing poverty and easing the impact of the global financial crisis that broke out in the United States in 2008 and is sweeping Europe.

The World Bank estimated the rate of growth of the female labour force in Mexico at 13 percent between 2000 and 2010, below the growth in Panama – 39 percent – and Colombia – 23 percent.

The World Bank stressed that “Female income was especially critical in reducing the strains on the poorest of the poor, along with public and private transfers,” and that “during the 2009 crisis, female participation in the labour market was crucial for compensating for the decline in male labour income.”

Since 2003, the UNDP has been carrying out a global gender equality seal programme to promote fair treatment of men and women in the workplace and supply chain and reduce barriers to women’s insertion in the labour market.

In the case of Mexico, the programme has so far certified 1,623 organisations, 1,038 of which are public, 570 private and 15 non-governmental.

“The laws are not enforced,” said de Castro. “Without a political commitment, at all levels, to reduce gender inequality, violence and exclusion, progress will not be made.”

A law on “equality between women and men” was put into effect in 2006, and in 2007 a law on “women’s access to a life free of violence” went into force. But neither law has been fully enforced, experts say.

Women “must determine what they want to do and how far they want to go,” said CREA’s Jáuregui. She said women entrepreneurs “generate quality jobs that allow their children to get an education, that generate income, and in which they are the decision-makers. If they resolve their problems of domestic violence and self-esteem, they are more productive.”

Given the lack of appropriate financial services for women, Women World’s Banking is preparing a pilot project in the southern state of Puebla.

“We plan to develop a different kind of credit product, more suitable for women,” “There is a major niche that can be sustained with very low costs.”

The plan is to offer productive loans averaging around 780 dollars to between 100 and 200 women for eight months starting in May.

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