Advances in gender equality would accelerate the eradication of poverty

  • Only 30% of the world’s businesses are in the hands of women, and their companies are usually the smallest.
  • Gender gaps occur on a worldwide scale and are particularly pronounced in developing economies. In Latin America, one third of women depend on other people, generally men, to be able to subsist.
  • Female entrepreneurship is a driver of wealth, particularly among disadvantaged communities. In Latin America, where only 34.4% of the poorest women work, one in every four chooses to set up her own business.
  • The women entrepreneurs supported by the BBVA Microfinance Foundation earn 25% less from their businesses, but set aside 35% more for savings, and their income has a much greater effect on improving the socioeconomic conditions of the household.

Women worldwide have fewer opportunities than men to generate economic and financial development. Guaranteeing their rights and offering them opportunities to achieve their full potential is a way of bringing forward the achievement of the Sustainable Development Goals proposed by the United Nations as essential for achieving a world without extreme poverty by 2030.

Empowered women contribute to the productivity of their families, communities and countries. “They progress individually and improve the development levels in the communities around them. The generation of self-employment is a perfect way of achieving women’s empowerment. Today only 30% of the businesses in the world are started and run by women, and these also tend to be concentrated in micro and small companies”, explains Giovanni di Plácido, Director of Studies and Strategy at the BBVA Microfinance Foundation.

The gender gap in the labor market in Latin America

There are currently over 100 million women in Latin America and the Caribbean, approximately 50% of whom are of working age. However one out of every three depends on other people for subsistence, which makes them economically vulnerable and dependent on receiving some income, generally from men.

Almost 23 million women have entered the labor market in the last ten years in Latin American countries. But only half of them have jobs, whereas in the case of men this figure is 8 out of 10. The lower the income levels, the greater the gap.

Women who live in a situation of poverty have greater difficulty in accessing the work market due to their lower educational level and the obstacles they face due to having to take on the domestic responsibilities and the care of children or elderly relatives. Only 38.4% of the poorest women work, and most of them are self-employed and run small enterprises.

“Women living in rural areas are twice as likely as women living in cities to work for themselves. Obliged by the lack of opportunities in the work market, one out of every four women is self-employed, most in the commercial and services sector (low-productivity sectors), because setting up this type of business requires less capital”, says Giovanni di Plácido.

Entrepreneurship offers an opportunity for women’s economic development. Equality of access to investment in human capital and other productive and go-to-market resources would give vulnerable women more opportunities to advance.

The BBVA Microfinance Foundation supports women’s progress

The BBVA Microfinance Foundation is a non-profit organization dedicated to promoting sustainable and inclusive economic and social development for disadvantaged sectors of society in Latin America by means of Productive Financing, its specialty and methodology. 61% the entrepreneurs supported by the Foundation with productive loans are women, due to their important role in the economy and as a key drivers for reducing poverty.

46% are in a situation of vulnerability and at risk of falling back into poverty, 40% are poor (and 30% of these are in extreme poverty). The Foundation funds them with the most suitable loans (in amounts and in repayment terms) for their needs and capacities, and also gives them personal advice about the whole process, from aspects such as running the business, financial management, how to adapt the necessary facilities, production costs, materials and more.

The progress of these women is greater than the male entrepreneurs served by the Foundation: their income increases an average of 19.9% as opposed to 11.4% in the case of men, and their assets grow by 31.8% year-on-year compared to 27.4% in men.

Although women earn 25% less from their businesses than men, they set aside 35% more for savings and their income has a greater impact on improving the household’s socioeconomic conditions.

The foundation provides low-income entrepreneurs with a wide range of financial services and products (loans, insurance, remittances, and savings, among others), and non-financial assistance (training and advice with developing their businesses), even traveling to their place of work or home –as they often run their business from home–, to analyze their production conditions and lifestyles.

The Foundation currently supports over 1.7 million entrepreneurs in seven countries, who have been able to carry out productive activities and improve their quality of life and that of their families and communities. Thanks to its broad territorial coverage, it has had an impact on the lives of 6.9 million people. Since its creation it has disbursed an aggregate volume of 7.176 billion dollars for productive loans.

The Foundation –also philanthropically– runs initiatives designed to support and transform the microfinance sector and overcome the obstacles that hinder its much-needed expansion.