By | Estephannia Herrera Esquivel
Program Coordinator, ANDE Andean Region office.
In this article we will examine the challenges faced by women entrepreneurs and how ANDE is addressing them through three key approaches: investment promotion and training services, improving gender-sensitive policies in Small and Growing Enterprises (SMEs) and intermediaries, and scaling up gender-sensitive models and services, as well as describing the initiatives it has been leading on this issue.
ANDE recognizes the fundamental role of SMEs in the sustainable development and economic independence of women. Despite their significant contribution to employment (according to the OECD, SMEs account for 99.5% of companies in Latin America), we identified persistent challenges that limit women’s participation in this sector. As an organization, we see entrepreneurship as a key player in empowering women and moving towards economic equality.
We know that there are different challenges around gender equality, and we strongly believe that the entrepreneurship sector must work on closing the gap in 3 key aspects:
- Investment promotion and training services:
There is inequality in access to capital for women entrepreneurs. Data from the study “Global Accelerator Learning Initiative” (GALI in short) from ANDE, reveals that female-led teams receive ¼ less investment than male-led teams, and that, although demand for impact investment related to SDG 5 has been growing, only 17.2% of these funds include gender equality.
To contribute to the solution, it is advisable to create initiatives that offer technical advice to investment/impact investment funds, so that they can include the gender approach in their processes. Train finance professionals to include gender practices in the evaluation process of portfolio companies and develop innovative investment strategies such as: diversity and inclusion bonds, women-only investment vehicles, etc. in order to increasingly contribute to the inclusion of women-led companies in their portfolios.
- Improvement of policies in companies and organizations:
There is evidence that women are significantly underrepresented in decision-making roles, with only 15% holding managerial positions in the region and only 14% owning businesses, according to the IDB, despite the fact that women’s participation in the labor market increases economic growth and contributes to alleviating poverty. According to the World Bank, reducing the employment gap between women and men would increase GDP per capita by 20% in the long term.
To combat this challenge, it would be useful to include more women in leadership positions and improve employment policies to address systemic disadvantages in terms of pay equality and labor rights, in addition to working towards internal policies that recognize gender inequality.
Encouraging more women to own investment funds and establishing mentoring programs for women leaders are integral to our recommendations for closing the gender gap. These measures seek to promote equal opportunities and empower women in all facets of their careers.
- Scaling of models with a gender approach:
Significant economic opportunities exist in scaling women-focused business models. It is advisable to integrate women-led SMEs into production and distribution chains to maximize their impact. Doing so empowers women entrepreneurs, contributes to economic growth, and poverty alleviation.
Gendered products and services represent a huge opportunity in emerging markets. In 2018 women controlled an estimated $40 trillion in purchasing power (data from The Boston Consulting Group), furthermore it has been identified that so-called “femtech” products will generate more than $50 billion by 2025.
It is important to strengthen the networks that support women’s entrepreneurship. These networks can create an ecosystem that connects entrepreneurs to different markets, whether global, regional or local. We propose that organizations create programs that break down barriers to women’s access to the corporate value chain, ensuring that they can fully participate in business opportunities.
Gender initiatives led by ANDE:
We continue to demonstrate our active commitment to closing the gender gap through various initiatives, such as:
Study of problems and causes: We conducted in-depth studies to understand the main barriers and challenges faced by women entrepreneurs in Latin America and the Caribbean.
Action laboratories: We promoted participatory work spaces called Action Labs and provided grants to three regional initiatives to implement the solutions developed in this exercise. These include: strengthening gender investment skills, developing a diagnostic to reduce gender bias in financing models, and supporting small businesses led by women.
Gender learning community: We brought together 36 organizations in four learning sessions to share challenges and lessons learned on how SMEs can contribute to closing the gender gap.
Strengthening of capacities: We work to strengthen the capacities of civil society organizations that have projects with a gender focus, so that they understand the financing and investment processes, generate sustainable partnerships with capital providers, and make financing an instrument for social change.
As an organization we will continue to work to support women as entrepreneurs, assisting to close the gender gaps that still exist within the sector in terms of access to capital and technical assistance. As employees, encouraging large corporations to include women entrepreneurs within value chains to foster their presence in the market, and intermediary and corporate organizations to actively improve their inclusive gender policies, give them more opportunities to move up the ladder and be in decision-making positions. Along with this, supporting them to become investors and for more and more women to speak the language of finance. Finally, as consumers, encouraging companies to create products and services with a gender lens that truly address their needs and leverage the potential of the female market. Explore our website www.andeagei.orgto learn more about ANDE’s work and vision on the gender gap in the sector.
If you want to know more about ANDE’s other areas of action to support the sector, you can visit our page www.andeglobal.org
