Teaching the very poor
Sep 11 - 17, 2000
Although women's and men's gender roles in
developing countries are clearly different, it may seem that women and
men entrepreneurs have very similar business roles and therefore
similar training needs. However, the experience of the United Nations
Development Fund for Women (UNIFEM); over the past decade in several
East and Southeast Asian countries suggests that poor women have some
distinct needs that should be explicitly addressed in entrepreneurial
The unique training requirements of women
entrepreneurs who live near the subsistence level arise primarily from
the convergence of women's businesses and traditional gender roles.
Particularly in micro and cottage enterprises, women's businesses are
linked very directly to their gender roles of housewife and mother.
Women in developing countries usually start up small businesses to
help meet the primary responsibility of providing their families with
food, clothing, education, and health care. Women's businesses also
tend to utilize skills acquired through their domestic roles, and many
businesses are physically located in the domestic environment.
In contrast to most men's businesses, women's
businesses are often so closely integrated into household activities
that there is no clear distinction between business and household
activities. For example, many women who operate small sundry stores or
food processing enterprises draw freely on their business stocks and
earnings for household consumption. As a result, they have little idea
of the real earnings of the business and are unable to analyze its
performance or price goods appropriately.
In entrepreneurial education programs for women,
learning how to separate the enterprise from the household should be a
key focus of training. The results of such a separation can be quite
dramatic and empowering for women. For example, in a Philippines slum
area, both the women operating small sundry (sari-sari) stores and
their husbands assumed that the stores merely supplemented the
husband's cash earnings, on which the households and the women were
mainly dependent. A business training program implemented by a
nonprofit organization taught the women easy methods of maintaining
separate accounts, thereby showing that the stores actually provided
the major share of household income.
This simple finding empowered women in two ways.
First, they began to take their enterprises and their own economic
roles much more seriously, and they began to invest time and effort to
upgrade their businesses. Second, the discovery that they were not
economically dependent on their husbands encouraged some women to
gradually negotiate a more equal relationship within the household,
particularly in relation to decision making.
A related training need that often has greater
implications for women than men is that of simple business analysis
skills. The failure to maintain separate accounts means that women
cannot accurately identify and measure income and expenditures. In
particular, since women's primary household responsibilities are
unpaid, they tend to overlook the costs of their own labor, thereby
selling their products below cost. As a result, many small women's
businesses are considered to be vehicles to generate a cash flow
rather than a profit. That is, while the cash generated by the
business may enable the household to meet its basic short-term needs,
a financial analysis may reveal that the business actually incurred
losses since the numbers do not include the opportunity cost of the
Access to credit. If women arc unable to analyze
their enterprises, they cannot identify their business weaknesses and
vulnerabilities. Since women entrepreneurs usually have more
difficulty than men in gaining access to credit, women in the micro
and cottage enterprises often emphasize credit as the biggest obstacle
to business development.
Women fish processors in Vietnam approached a
UNIFEM project for access to subsidized credit. on the grounds that
their snarl enterprises could not pay market interest rates. However,
most of the women were actually using informal sources of credit from
money lenders, friends or family. They did not realize that their
effective interest rate was often well above the market rate because
it was not clearly identified in the repayment method.
The availability of credit was a problem, but the
rate of interest was not. The real credit issues were the women's lack
of access to collateral and their need for flexible repayment
arrangements that would take into account the long gestation period
between the purchase of raw materials and the readiness of the fish
sauce and fish paste produced by fermentation methods for the market.
Solid book-keeping practices not only help women to
accurately identify the nature of their credit problems, they also
enable women to place the issue of credit in proper perspective.
Although often considered the primary need of small businesses, credit
should only become an issue after analysis has established that the
business is economically viable and has the potential to generate
From this perspective, the major training needs of
most small businesses, particularly those operated by women, lie in
the areas of product development, productivity and technology
development, and marketing. At the micro and cottage level, women
entrepreneurs are particularly handicapped in these areas by the
combined impact of gender stereotypes and their more limited business
experiences relative to men developing the right products. When they
come to the market as consumers, poor women tend to be almost
completely price driven. The key for them is to find the cheapest
price. When they enter the market as producers, they tend to extend
this experience, automatically positioning themselves at the low end
of the market where competition is strongest and the potential for
adding value is minimal.
Women have less exposure than men to education,
travel and the media. As a result, most poor women entrepreneurs do
not understand that some buyers might be motivated by quality,
usefulness or fashion. Therefore, they often do not even consider
targeting their products to the middle, much less the higher end, of
Mastering technology. Gender stereotypes also tend
to exclude women from information about technologies and from learning
the skills needed to master the often quite simple mechanized
technologies that could greatly increase the productivity and
profitability of their enterprises. The Vietnamese fish processing
project mentioned above trained women to use very simple fish grinding
machines that were readily available and affordable to many
households. The project found that the training not only enabled the
women to utilize this technology, it also encouraged some to become
more adventurous in seeking other forms of mechanization.
—Economic Reform Today Feature
Lorraine Corner is Regional Program Adviser of the
East & South East Regional Office of UNIFEM in Bangkok, Thailand.
UNIFEM is a catalytic fund in the UN system that supports innovative
programs which reach large numbers of women entrepreneurs.