NEW YORK – With support from global nonprofit Women’s World Banking, three financial institutions in Peru, Colombia and Paraguay are successfully tapping a historically under-served market: low-income rural women.
In a new report, Making Women’s Work Visible: Finance for rural women, Women’s World Banking details two years of research, product development and execution with Caja Arequipa of Peru, Fundación delamujer of Colombia and Interfisa Financiera of Paraguay. All three institutions are now offering loans tailored specifically for rural women whose significant economic contributions to their family incomes were previously under-valued by banks, and often by the women themselves.
“We often talk about the ‘invisible’ work of women around the world. Our research in Latin America produced fascinating results – rural women’s work in agriculture and related activities were actually exceeding many of their husbands’ earnings, but rarely did the family recognize or even realize this,” said Mary Ellen Iskenderian, President and CEO of Women’s World Banking. “We were thrilled to partner with three institutions that worked with us to understand this dynamic and to offer credit to women with no previous access to loans in their own names, a promising step toward full financial inclusion for low-income women in Latin America.”
In Latin America only 35 percent of women have access to financial services. In 2012, Women’s World Banking began research in Peru, Colombia and Paraguay to understand the barriers preventing these women from accessing financial tools. The results showed that rural women face unique challenges and limitations compared to their urban counterparts. They are responsible for managing the household, raising the children and often contribute a significant sum to the family income through supplemental farming, artisanal and other activities. However, women’s inability to take out loans in their own names inhibits their productivity and potential.
Financial institutions interested in broadening their offering to rural areas, especially to women, have to overcome some geographic and cultural challenges and it takes time to make these changes in remote areas. Fundación delamujer in Colombia was already offering loans in rural areas, but the large majority of clients were men. The institution worked with Women’s World Banking to design a range of loans, each designed with the size and repayment terms tailored to individual economic activities, e.g. raising livestock or selling food items. One loan in particular, the Fundacredito Agromujer, is designed exclusively for women who sell ‘transformation products’ on the farm, for example, turning fruit into jam or milk into cheese. This loan is even available to women whose husbands already have a loan, breaking a long-held one-loan-per-household standard and allowing women to independently build their businesses.
“It was not until we had the opportunity to carry out the research with Women’s World Banking that we understood what women in the field really needed,” said Teresa Prada, Executive President of Fundación delamujer. “This allowed us to truly understand that we weren’t offering an appropriate portfolio because, like all institutions generally do, we arrived with our same portfolio for the urban sector to the rural sector, and that is a big mistake.”
Through this project, more than 60,000 loans have been disbursed so far across Colombia, Peru and Paraguay, of which over 30,000 were given to new clients with an average US$1000 loan size. The project is funded by BMZ; Credit Suisse; Hivos; the Multilateral Investment Fund, member of the Inter-American Development Bank Group; and Irish Aid, and is scheduled to run through the end of 2014.
“Rural women’s actual and potential contributions are often underestimated. With access to finance, rural women can help build profitable and sustainable agricultural value chains, grow their businesses, and help lead their communities,” said Nancy Lee, General Manager of the Multilateral Investment Fund. “This project is part of the MIF’s wider strategy to integrate gender equality goals into every development challenge we tackle and to empower women in Latin America and the Caribbean to build a better future for themselves, their families, and their communities.”
Today’s release of Making Women’s Work Visible: Finance for rural women coincides with a workshop hosted by the Multilateral Investment Fund entitled “Empowering Women throughout the Agribusiness Value Chain” where Women’s World Banking will join MEDA, Root Capital, TechnoServe and Café Femenino to share lessons learned working with women and agribusiness.