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December 11, 2023

Applying a Gender Lens to Microfinance: Strengthening Women’s Personal and Business Growth and Resilience in El Salvador and Honduras Over Five Years

Tucked into a neighborhood just outside of San Pedro Sula, Honduras, a woman entrepreneur named Belkis bakes artisanal bread to sell in her community. Belkis lives with her young son and her mother, who is also a baker. Belkis’ home is full of baking supplies, cooking appliances, and the mouthwatering smell of hot banana bread.
 
Five years ago, Belkis became a client of ODEF Financiera (ODEF), a financial service provider (FSP) in Honduras that provides financial services to micro and small businesses, particularly those in the most vulnerable sectors of the informal economy. Inspired by her own mother’s experience working with ODEF, Belkis went to ODEF knowing “…they give a lot to people like [me] who need help with their business.” As a client, Belkis gained access to ODEF’s services to help her manage savings, receive credit, and tap into a whole support system to better run and continually improve her business—and her life. She also participated in the Resilient Life, Resilient Business (RLRB) training ODEF staff facilitated in her community.
 
Belkis is just one of more than 10,500 other female entrepreneurs supported by the Reducing Barriers to Women's Economic Empowerment in El Salvador and Honduras Initiative (RBI), the first initiative under the Women and Girls Empowered (WAGE) global consortium. Wonderfully, Belkis’ story is not unique.
 
Funded by the U.S. Department of State, Secretary’s Office of Global Women’s Issues, RBI began in 2018 with the intent to advance the status of women by reducing barriers women entrepreneurs face in accessing financial services and growing their businesses. To do so, the Grameen Foundation (Grameen) and the American Bar Association Rule of Law Initiative (ABA ROLI) developed a technical assistance (TA) package for three local FSPs—ODEF in Honduras and Credicampo and PADECOMSM in El Salvador—according to a social performance management (SPM)-based gender assessment aimed to strengthen FSP policies and institutional practices. Grameen and ABA ROLI tailored the TA package to meet the specific needs of the FSPs, while also recognizing barriers and opportunities WAGE partners identified through comprehensive assessments in El Salvador and Honduras.

 
WAGE found women in both countries often face widespread gender discrimination and persistent threats to their businesses and personal safety due to drug trafficking and gang violence. Yet the research also revealed the power women entrepreneurs innately possess, and that enhancing their personal and business assets could increase their resilience and confidence to overcome adversity and adapt to challenging business environments. Over five years, RBI took an integrated, multi-pronged approach to address barriers and seize opportunities for women entrepreneurs that involved 1) institutional capacity building for FSPs in line with the SPM-based TA package, 2) educational and financial opportunities for FSP clients, and 3) linkages between FSPs and other social services related to gender-based violence (GBV). Read on to learn more about major accomplishments and outcomes under RBI!

Improving FSP Institutional Practice Around Gender

In line with microfinance industry SPM indicators, Grameen and ABA ROLI developed a gender and safeguarding policy template, which the FSPs socialized within their organizations. PADECOMSM drafted a gender policy, while ODEF’s non-governmental organization arm drafted a new code of ethics including concepts of equity and sexual harassment. Meanwhile, Credicampo increased women’s representation among staff: between December 2021 and June 2023, female staff across the entire institution grew from 115 women to 136 women (an 18 percent increase), and frontline staff grew from one to eight women. These decisions represent key steps the FSPs took to improve their internal operations at a policy and practice level that both empower women and help prevent GBV in the workplace.

Shifting Harmful Gender and Social Norms in the Workplace

Furthermore, Grameen implemented the Gender and Power Dynamics (GPD) + Conflict training to increase FSP staff understanding of harmful gender and social norms. The goal was to raise awareness and understanding about why FSPs should be concerned about GBV as an unintended consequence of women’s economic empowerment (WEE). Increases in a woman’s income can shift power dynamics in the home putting her at risk of intimate partner violence. This can impact her ability to repay loans.
 
The GPD training addressed unconscious bias and power, as well as internal and external sources of conflict and violence women entrepreneurs experience. Grameen implemented the GPD + Conflict training for 132 management and frontline FSP staff. Though it was uncomfortable at times to breach sensitive subjects, the training positively shifted FSP staff perspectives around gender in the workplace and at home. During the RBI final evaluation, one FSO staff commented, “For me, the most significant change is that one must accept, first, that not only men can run the financial or economic baton of the home, women today have a broad role, in terms of their professional and personal improvement, so that orientation must be quite prominent and try to focus it to have better stability, both economically and emotionally.” Another frontline staff commented, “[The GPD + Conflict training] …has been a very nice experience, I have learned a lot, and what one hopes is to record as much as possible and disseminate it to the other people that one gathers in the communities.” PADECOMSM proceeded to cascade the GPD + Conflict training to 73 of their clients, deepening the impact of the training at the individual client level. 

Expanding Access to Financial Opportunities for Women Entrepreneurs

WAGE unlocked over $5 million in loan capital to support 10,578 women entrepreneurs in El Salvador and Honduras through a revolving loan-matching fund administered by Kiva. Through this mechanism, ODEF, Credicampo, and PADECOMSM expanded their loan portfolios to more female clients and reached women like Belkis with critical business investment support. All three FSPs witnessed 100 percent return on average assets under RBI, a common indicator of sustainability in microfinance that measures how an FSP is managing its assets to optimize profitability. High repayment rates show women entrepreneurs in El Salvador and Honduras can manage their loans. This falls in line with the understanding that women clients often have higher repayment rates and contribute larger portions of their income to household consumption.

Building Capacity for Women Entrepreneurs to Grow their Businesses and Shifting Harmful Gender and Social Norms at the Individual Level

Grameen also implemented the RLRB training of trainers (TOT) for 55 FSP staff, who then cascaded RLRB to 1,524 of their clients, of whom 94 percent were women. Grameen and ABA ROLI, with contributions from WAGE’s other core partners, the Center for International Private Enterprise and Search for Common Ground, developed the four RLRB modules together—Resilient Person, Resilient Life, Resilient Business, and Growing Business. WAGE integrated the concepts of personal and business finance, business growth, household and business resilience, conflict and stress management, and GBV into the curriculum. Frontline staff valued this kind of inclusive training, which is available in a virtual format and as a paper-based version. During the RBI final evaluation, one staff noted, “It was a very interesting process, because financial institutions do not always have this more qualitative perspective on issues such as gender, stress management, which were like the two main issues that had the most impact on our clients, so my learning was how to achieve all this psychosocial part with people who are more linked to more financial issues….for me it was linking all of this into a single training process.” Another significant takeaway is that applying a safeguarding approach to RLRB implementation by sequencing modules in a particular order enables facilitators to start with topics consistent with FSPs’ existing products and services, and then ease into more sensitive topics like GBV so clients feel comfortable discussing these issues.
 
FSP staff purposefully cascaded RLRB to their clients in conjunction with RBI’s financial services component for women entrepreneurs to ensure their clients could gain the knowledge, skills, and confidence necessary to manage and grow their businesses. Demonstrating the overall impact of the training, RBI’s final evaluation showed FSP clients who participated in RLRB are over 35 percent more likely to hold loans from an FSP and almost 30 percent more likely to own a business compared to clients who did not participate in the training. RLRB participants also showed diminished stress and anxiety related to upcoming bills/payments, along with lower rates of household conflict regarding finances. Therefore, RLRB proved successful at educating women entrepreneurs on financial management and intrahousehold conflict prevention. In addition, RLRB participants are almost twice as likely to discuss an emergency plan with their families in case their household faces a crisis compared to clients who did not participate in RLRB. According to one FSP frontline staff who commented on RLRB, “The purpose is that we all win, the clients win, [the FSP] wins, because if the client and their family are educated in the financial aspect, this will have a positive impact, they will be able to better manage their finances and will not fall behind in payments.”
 
WAGE saw notable success in shifting harmful gender norms at the individual level through the RLRB training involving WAGE partner FSP clients. A total of 87 precent of participants who responded to the RBI final evaluation strongly agree a woman is just as capable as a man at successfully running a business. Over 97 percent believe women should have the same rights and be treated the same as men. And 84 percent disagree with the sentiment men should have more rights to a job than women when jobs are scarce. Results also indicate a willingness to explore individual perceptions, attitudes, and beliefs about what is culturally considered normal. The evaluation also revealed traditional gender norms regarding household roles persist and should be an area of focus for future efforts.
 
The success story above highlighting the business growth Belkis experienced demonstrates the value of integrated women’s empowerment programming, particularly the effectiveness of the RLRB training.

Expanding Access to GBV and Other Support Services for Women Entrepreneurs

WAGE facilitated linkages between each of the three FSPs and the International Rescue Committee’s (IRC) CuéntaNos, a virtual platform operating across Central America to provide critical information on GBV, legal assistance, citizen protection, and other services for GBV survivors and other highly vulnerable people in the region. WAGE integrated information about   CuéntaNos into the RLRB curriculum for FSP clients, while IRC included information about each of the FSPs in the services they provide to women experiencing GBV. This linkage creates a two-way street whereby the FSPs and CuéntaNos can readily promote their services with broader audiences they may not otherwise reach. As a result, more women in both countries have greater access to information on financial and GBV support services.
 
RBI’s final evaluation found that FSP frontline staff and their clients were not aware of the CuéntaNos platform and the services it provides prior to WAGE. The linkage between the FSPs and CuéntaNos served as a critical bridge between women entrepreneurs who have experienced and/or are at risk of GBV and discrimination with referral mechanisms for GBV and other social support services. While some frontline FSP staff were initially unsure of how to provide information on GBV support services to clients, RBI’s final evaluation suggests their levels of comfort increased through trainings under RBI. Some frontline staff even mentioned CuéntaNos enabled them to navigate sensitive topics related to GBV with their clients they previously were unable to discuss. IRC reported the linkage was enriching, and the partnership introduced them to financial inclusion. Further, many FSP clients who participated in RLRB now recognize economic coercion as a form of GBV according to RBI’s final evaluation. WAGE learned linkages can be a powerful tool for providing women holistic financial services that account for the risk of violence they experience as a result of their increased economic empowerment.  

Recommendations for Future Programming

To support thousands more entrepreneurs, WAGE’s three partner FSPs have all begun to integrate RLRB and other elements of WAGE permanently into their processes. Because RLRB was developed as open-access and is supported by video sessions as well, the curriculum is expected to scale across Central America and reach many additional women entrepreneurs in the years to come.  Below are four potential areas for complementary programming:

  • Strengthen and deepen the relationship between the FSPs and CuéntaNos: Though the linkage between the FSPs and CuéntaNos had an auspicious start and provides a win-win situation for all parties involved, including clients, the FSPs and CuéntaNos need to continue promoting each other’s services to their respective staff and clients alike. The FSPs may consider additional ways to promote CuéntaNos’ services beyond integration in RLRB, such as sharing the CuéntaNos WhatsApp number in their branch offices, so that more GBV survivors can access the information without drawing unwanted attention.
  • Improve existing and develop new financial services to better respond to barriers women face in accessing, using, and benefiting from those services. Though it was noted as an area of need, WAGE did not have the scope to revise existing or develop new financial products. If done correctly, this action could help FSPs be more sensitive and responsive to women’s needs and safeguard their clients from economic and financial violence, among other forms of GBV. Grameen is currently researching this avenue through the Escúchame project, an add-on to RBI funded by the U.S. Agency for International Development’s Mujer Prospera Challenge.
  • Consider the role of intrahousehold or community dialogues to directly address household dynamics and collaborative decision-making. Since there is a strong evidence base for male engagement as a critical complement to WEE, dialogue-based and household-level methodologies may have wider and longer-lasting effects and may also mitigate concerns of GBV that accompany WEE work. The effectiveness of this strategy is also being explored by the Escúchame project but has been successfully implemented by other Grameen-led WAGE initiatives in EswatiniGhana, and Timor-Leste.
  • Integrate the promotion of women’s rights. The RLRB curriculum largely addressed the needs identified through WAGE’s initial gender analysis, but it did not directly seek to raise awareness about women’s rights. Globally, women often justify domestic violence more than men due to the normalization of violence over the course of their lives—even as young girls. This is no different in Central America.  Building critical consciousness among women regarding their rights and how laws and other protections apply to them is an area for future effort.

Published on December 12, 2023.

    *Disclaimer: The views and opinions expressed in this blog post do not necessarily reflect the views of the United States Government. 
     
    Women and Girls Empowered (WAGE) is a global consortium to advance the status of women and girls, led by the American Bar Association Rule of Law Initiative (ABA ROLI) in close partnership with the Center for International Private Enterprise, Grameen Foundation, and Search for Common Ground. WAGE works to strengthen the capacity of private sector organizations (PSOs) and civil society organizations (CSOs) in target countries to improve the prevention of and response to gender-based violence (GBV); advance the women, peace, and security (WPS) agenda; and support women’s economic empowerment (WEE). In this context, WAGE provides direct assistance to women and girls, including information, resources, and services they need to succeed as active and equal participants in the global economy. WAGE also engages in collaborative research and learning to build a body of evidence on relevant promising practices in these thematic areas. To account for the deeply interconnected nature of women’s and girls’ experiences, WAGE’s initiatives employ approaches that are highly collaborative, integrated, and inclusive. WAGE is funded by the U.S. Department of State Secretary’s Office of Global Women’s Issues.

    The materials contained herein represent the opinions of the authors and editors and should not be construed to be those of either the American Bar Association unless adopted pursuant to the bylaws of the Association. Nothing contained herein is to be considered as the rendering of legal advice for specific cases, and readers are responsible for obtaining such advice from their own legal counsel. These materials and any forms and agreements herein are intended for educational and informational purposes only.