Photo: ©Nancy Thomas/CARE

The challenges facing women micro entrepreneurs

By Ajaz Ahmed Khan, Microfinance Advisor, Lendwithcare.org, CARE International

The challenges facing women micro entrepreneurs

Lendwithcare.org, CARE International

Women microentrepreneurs face many difficulties in developing their businesses: lack of appropriate skills, lack of mobility and lack of infrastructure may all pose significant challenges. In such instances the provision of microfinance to address the problem of lack of capital may have a limited effect unless steps are taken to address other difficulties as well. Recently I spent some weeks in South America where this became evident.

Typically, microfinance has been used by women in Ecuador to develop ‘traditional’ businesses such as managing grocery shops, raising poultry or other animals, and providing sewing or tailoring services – that is, activities that are commonly undertaken from home and, although they do generally provide a stable and secure source of income, are also often associated with low economic returns.

When I asked women microentrepreneurs why they favoured such enterprises, invariably the response was ‘No tengo con quien dejar los niños’or ‘I have to look after the children’. Working from home enables women to earn an income while looking after young children – they can close the business while they drop off and pick up their children from school or attend to other urgent tasks such as taking an ill child to the doctor.

The experience of Carmen Castillo, who runs an Internet café in the town of Catamayo in southern Ecuador, is typical. Doña Carmen used to work as a radio controller for a taxi firm. Although she earned a good income, she found it difficult to combine work with looking after her three young children. She decided therefore to leave her job and start her own business instead. She converted the ground floor of her home into an Internet shop while continuing to live on the first floor. Carmen opens the shop at around 10 am each day after making breakfast and taking her children to school. She then attends to customers throughout the day, closing briefly when she has to pick the children up from school. When her partner returns from work she switches to other tasks such as cooking, cleaning and making sure her children do their homework while her husband continues to look after the shop until it closes at 10 pm.

Women who have businesses that require them to work outside the home, for example managing a stall in the public market, rely on other family members, particularly grandmothers, to look after their children. The father is absent in almost one-third of households in Ecuador. However, even in the remaining two-thirds of families looking after children is still considered primarily a ‘mother’s duty’ – in some instances elder daughters have assumed the responsibility of caring for younger siblings, perhaps in the process limiting their own longer-term educational prospects.

The target group of many microfinance providers in Ecuador are the women who sell fresh fruits, vegetables and other products in the numerous markets and I asked them how they used loans. Primarily, they replied that loans enabled them to pay wholesale suppliers in cash, rather than taking items on credit. This is important because not only do they receive a discount, but they can also select the freshest and best quality produce available. The valued outcome is that they are able to sell their stock quicker, close the stall and return home early to care for the their children.

Undoubtedly, the types of business activities that women prefer to undertake or the time they spend outside the home is influenced by their ability to depend upon other family members to assist with child care, as well as the accessibility and cost of childcare facilities. Unfortunately children’s nurseries tend to be either heavily oversubscribed or too expensive for low-income families, while outside the larger towns and cities childcare facilities are simply non-existent. Creating more affordable places at nurseries would undoubtedly make women’s lives easier and it is likely also impact upon the range and profitability of their business activities.

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