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Educating Women



Teaching the very poor

By Lorraine Corner
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 education programs.

Unique situation

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 women's labor.

Wanted: business skills

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 profit.

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 the market.

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.