BARRIERS TO ECONOMIC EMPOWERMENT OF WOMEN (ACCESS TO MARKET, FINANCE, TECHNOLOGY, EDUCATION, INFRASTRUCTURE AND ENTREPRENEURSHIP DEV)
Prepared for the conference on Gender Equality and Economic Development in Africa , organised by Ronald . H . Brown Institute for Sub-Saharan Africa.
16-18th September, 2009
By Hilda M. K. Tadria (PhD)
Gender and Social Development Specialist.
Uganda.
BARRIERS TO ECONOMIC EMPOWERMENT OF WOMEN (ACCESS TO MARKET, FINANCE, TECHNOLOGY, EDUCATION, INFRASTRUCTURE AND ENTREPRENEURSHIP DEV)
“I don’t have a problem because I operate like a man; so I can beat any man anytime”:words of a successful young female entrepreneur in Uganda.
INTRODUCTION:
There are three major areas where women business owners may face challenges, less common to men in business:- Gender discrimination and stereotyping
- Dual carrier family
- Lack of equal opportunities in certain Industries
The information in this paper is based on conversations with women entrepreneurs from several countries as well as reviews of research papers on women business . A question is usually raised, “ do women have special barriers?”. The answer is yes.
In conversations with women, many of them are convinced that in the entrepreneurship sector in Africa, both men and women face the same challenges in access to finance, markets, technology education and infrastructure. However, as the conversation progresses, the women begin to give examples of the challenges they have had to face. It soon becomes clear that the most important commonalities such as access, or lack of it, are defined by the gender factor[1]. Manyinstitutions now recognize that gender inequality limits women’s effective participation in the entrepreneurship sector. The International Finance Corporation for example has established a Gender Markets Entrepreneurship programme as a direct recognition that gender inequality affects women’s participation in the private sector.
Despite recent increases in women's educational attainment, women continue to earn less than men in the labor market-even when they have the same education and years of work experience as men. Women are often limited to certain occupations in developing countries and are largely excluded from management positions in the formal sector. In industrial countries women in the wage sector earn an average of 77 percent of what men earn; in developing countries, 73 percent. And only about a fifth of the wage gap can be explained by gender differences in education, work experience, or job characteristics.World Bank Policy Research Report: Engendering Development through Gender Equality, in Rights, Resources and Voice 2001
If only about a fifth of the wage gap can be explained by gender differences in education, work experience, or job characteristics, what are the major barriers to economic empowerment of women? In this paper I will attempt to illustrate howthe major barriers to the economic empowerment of women, that is gender discrimination, stereotyping as well as multiple gender roles, are directly related to Patriarchy; a system of social organizationbased on an ideology of gender inequalityin most African societies. Lack of access to education, finance, markets technology and entrepreneurship development are all consequences of the way this patriarchal system operates to sustain differentiation and discrimination, male superiority and female subordination, as well as a rigid structure of division of labour. The negative impact patriarchy will can best be illustrated with women’s lack of access to finance and entrepreneurship development.
What is patriarchy?
A patriarchy[2] is characterised by an “a policy or practice of treating or governing people in a fatherly manner, especially by providing for their needs without giving them responsibility”. From the Feminist perspective, patriarchy is used as a generic term for “male privilege, supremacy and dominance”[3], it is a system of social organisation in which gender relations are defined and validated. The ideology of male dominance that is so central to patriarchal systemsand the rigid gender role structure legitimise the persistence of sexism and gender inequality in the private and public domains, even today.The patriarchal value system, norms and practices are the single most important barriers to economic empowerment of women impacting negatively on access to market, finance, technology, education, and infrastructure and entrepreneurship development. This paper discusses how the patriarchal norms and values, in which men and women are assigned(or perceived to have) different duties, attributes, and privilegespervade the practices of all institutions, to create barriers for women’s economic empowerment, especially access to finance.The paper will illustrate how “Institutions that mediate resources and women’s access” apply discriminative patriarchal norms, values and stereotypes to determine women’s access to financial entitlements.
Gender discrimination and stereotyping:
Individual as well as institutional perceptions and stereotypes, (mostly patriarchal and negative) about women’s capabilities and entitlements influence whether and how much resources women can access. Let me illustrate thiswith examples of real cases:
Case 1: Sipho from Lesotho was a female high ranking civil servant and single head of household. On getting close to retirement, she decided to invest some money into business. She decided that she would open an account in a bank that was known to be responsive to entrepreneurs so that she could later have access to credit. She was shocked when she was told that she could only open a new account if she brought a male signatory to her account. She had no son, so in her own words, “I had to get over my humiliation and pride and bring my gardener, a man who has money only because I pay him, to be my sponsor”.
Case 2. Janet is from Malawi. She started a business that she managed together with her husband until he passed away. She decided to carry on with the business because although it was a very specialized type of business, the family had started that particular business because Janet had the professional and technical skills for it. However, a few years after her husband had passed away, she decided that it was time to expand her business. In spite of her former connections through her husband, she found it difficult to access banks, and one particular question she found herself having to answer all the time was, “But as a woman you are already making enough money, what do you want?”
Case 3. Rose from Uganda was a well educated woman who had had to live her job to start looking after her family full time, and to support her husband’s career as a professor at university. However, like all enterprising women in Uganda, Rose decided to start a small back yard poultry business. With her education and status in society, she was able to obtain a micro loan credit from the Uganda Women’s Finance Trust, a facility that specialized in lending to women. Rose had been give six months in which to start paying the loan. However, when she did not pay back in time, the staff of the Finance Trust decided to follow her up and get her to pay. They found a crestfallen Rose, instead of a thriving Rose. After her sales, her husband had demanded control of the income, claiming that she was his wife and he as the head of the household had the right to manage and control the resources, after all, she was told, “you were using my premises”. Rose’s failure to repay ensured that she had no more access to micro credit.
Case 4. Case number four is different, but her case is not unique. Grace is an uneducated illiterate woman in a rural village in Uganda. She learned of the possibility of becoming a goat owner through the local council system that operates at grass roots level in Uganda. She joined a women’s organization which was the requirement for being allocated a goat. Two years later, she was a proud owner of five goats. One day, her husband accused her of neglecting him and paying more attention to the goats. He beat her up so badly, and fearing for her life Grace went back to her parents. After a few days, her parents decided that it was time for her to return to her husband. They called the local council authorities and the husband and a case was tabled. The council decided that the husband was at fault and fined him. Since he had no money, they decided to fine him in kind: 1 goat and a pot of local brew. The husband went home picked one of his wife’s goats and brought it to the Local Council. The goat was slaughtered, roasted and shared among the members of the council, the woman’s father and her husband. This may sound like a big joke but it is a true story. As I sat and listened to the woman narrating the story, I was struck by the powerlessness and bitterness, “we women in the village have no power or protection”, she said. Little did she know that it is not just women in the village?
Box 1[4]Common experiences, common needs :women’s entrepreneurship worldwide
When asked about their biggest concerns in running their businesses, women all over the world identify five major issues. The Centre for Women’s Business Research in the United States conducted research in over half a dozen countries and found that women share concerns about the following five challenges:
- Access to information: Women want better access to education, training, and counseling.
- Access to capital: Access to capital is a very important issue for many women business owners, who often lack formal education in financial matters and who may face gender-based barriers to accessing financing.
- Access to markets: Women want better access to existing ways of sharing information about programmes and services that are available to all businesses, such as government procurement and corporate purchasing opportunities, as well as opportunities for international trade.
- Access to networks: Women want full access to business networks such as industry-specific and general business associations.
- Validation: Women want to be treated seriously as business owners.
The cases above illustrate how traditional views about women’s entitlements and property ownership create specific barriers in accessing finance at different levels. The first three are cases of women who are very well educated, had both professional and technical skills, and although they had access they had no control over capital, unless they were backed by men. However, their cases are not different from that of the illiterate village woman. She too had access but no control over her capital. In the two cases where husbands had control over resources, it may seem a personal issue between husband and wife. However, the actions the husbands took were legitimized by the patriarchal system in which women’s entitlements are defined by the patriarchal rules of gender relations. The cases of these women above are not unique (see box), and illustrate how perceptions and stereotypes about women can lead to discrimination. In particular, the cases illustrate important common gender issues that affect women in business.
In preparing this paper, I interviewed some women entrepreneurs inUganda, and although some of the barriers they referred to affects men as well, it was emphasized that women were at a greater disadvantage than the men in accessing finance for the business. In the women’s view, women borrow less frequently than men and when they borrow, the amounts they borrow are also lower. The reasons for borrowing less from banks or other financial institutions were said to be: a) the lack of knowledge of the financial institutions, b) lack of collateral; Family members hesitate to invest money in business started by women or permit access to a bank loan. Sometimes, the property may be in the names of male persons who are not ready to give it as security for availing a bank loan.
The cases above illustrate important common gender issues that affect women in business:
- Women are regarded as dependants and therefore not entitled to acquiring loans and capital on their own.
- Even when the women own the property, they have no control over it and cannot therefore depend on it for collateral or as capital. The powerlessness of women is usually manifested in the loss of control of their property. In patriarchal systems, everything belongs to “a male head”.
- In the patriarchal value system, a woman is perceived as not entitled to big loans because she has no need for a lot of money. Unrealistic perceptions and stereotypes of women in a patriarchal system have negative implications for women’s access to finance especially if “Institutions that mediate resources, and women’s access”[5] are influenced by patriarchal norms and values regarding gender roles.
- Within a patriarchal framework there are clear views of women and men and how they differ, and what their needs are. This in itself is not a problem. The differentiation becomes an issue when it provides a basis for defining what resource women can access and control,and when this patriarchal ideological framework is applied not just in the private domain, but in the public domain as well. The consequence is that unrealistic, false or negative perceptionsa well as stereotypes of women in a patriarchal system are applied within financial institutions to decide whether and how much a woman may borrow. The cases above illustrate what happens when a value system of unequal relations of power, as well access to and control of resources are extended to the public domain. This is why there is a strong argument for “changes in the institutions that mediate resources, and women’s access, voice, and influence”. Without “attitudinal and behavioral changes at the individual and institutional levels”[6], women’s access to finance will not improve.
Lack of access to financial resources is not just limited within the African continent. “In the USA, women do not access capital at the same level as male business owners”, says the manager of WellsFargo's, a lending program targeted at women-owned businesses.
Taking the pulse of women entrepreneurs
Lack of access to Financeis a global problem for women. The cases discussed above showing women’s constraints in accessing finance are validated by many other studies which have produced cases that reveal how access to finance is the most common challenge that women face globally.A report based on in-depth interviews and group discussions, carried out with women across Tanzania shows that “in a collateral-based banking system, only 5 percent of women reported having access to bank finance in a 2006” [7]
A study by the United Nations’ Economic Commission for Europe has noted that “Access to financing is a major challenge to starting a business, especially for women. Gender specific barriers include the traditional views on women’s role, but also in many countries the lack of collateral. In countries of Eastern Europe and the CIS[8], women’s opportunities for entrepreneurship were strongly affected by a clear gender bias in the privatization process, in other countries, problems with the implementation of equal Rights to land and property still exist”[9].
In South Africa, where the financial sector committed to financing empowerment, research findings show that “gender continues to be a terrain of struggle for women”[10]. A diagnostic study on Access to Finance for Women Entrepreneurs in South Africa, undertaken at the request of the Gender and Women Empowerment Unit of the Department of Trade and industry of South Africa has highlighted this very well. The report notes that, “most financial institutions work on an assumption that BEE (Black Economic Empowerment) strategy will automatically benefit women. In reality, this is not the case and could lead to a marginalization of black women if adequate measures are not taken soon”,
The study also noted that thecredit worthiness of women is affected by the role of housewife. When women are married, get divorced or widowed, they may find themselves ineligible for credit, even though they have contributed to the repayment of assets such as property. They may not have had separate credit histories, because credit facilities have been listed only in the husbands’ names. The study found that community of property[11] marriages sometimes have a considerably negative impact on women’s ability to access credit and build sound credit histories in their own names. The study in South Africaconcluded that “while race is still a primary driver of financial access in South Africa, a gender gap also exists which cuts across the races. The combination of race and gender disparities works largely, however, to the detriment of black women who register the lowest levels of income and of formal access to economic opportunity and financial services”[12]. All this, in spite of the fact that women were found to have a track record for paying loans back. Women’s positive payment records do not seem to translate into better access to credit from financial sector, in other words, the record set in repayment does not influence the lending practice of financial institutions.