Co-authored by Deepika Malik, Enterprise Development Manager at the Cherie Blair Foundation for Women, and Luis Marquez, Gender and Private Sector Specialist at Value for Women
There is a huge opportunity in Mexico that is currently being overlooked and under-utilised. One that could lead to economic growth, job creation and stronger communities.
That potential lies within women entrepreneurs. From micro-entrepreneurs to boardroom executives, enabling women to realise their full economic capacity has the power to drive benefits for all. In fact, research shows that if women were able to participate equally to men in the economy, Mexico’s GDP would increase by 43% ($810 billion USD) by 2025.
Women’s equal participation in the economy is still a long way off. Only 46% of women are in the labour force compared to 80% of men. Women are over-represented in Mexico’s informal sector, so are more likely to be found in insecure, low-paid and unsafe work. Women are also under-represented when it comes to business ownership, with only 29% of formally registered microenterprises, 19% of small firms, 6% of medium firms and 7% of large firms owned by women.
Women-led small and growing businesses (SGBs) are a particular group with vast potential to drive economic growth and job creation in Mexico’s economy. However, despite the fact that many women leading SGBs are highly educated with extensive professional experience,
their businesses tend to be smaller than those led by men, with lower revenues, limiting their ability to grow.
To better understand the issues and opportunities for women-led SGBs in Mexico, the Cherie Blair Foundation for Women and Value for Women, supported by the ExxonMobil Foundation, conducted a national study, Understanding How to Unleash the Potential of Women Entrepreneurs in Mexico. The study was part of the Cherie Blair Foundation for Women and the ExxonMobil Foundation’s Road to Growth initiative, which provides business management and investor readiness support to 500 women entrepreneurs via a combination of face-to-face and online training.
What are the barriers constraining Mexican women entrepreneurs?
The report found that women leading businesses in Mexico are constrained in accessing the financial, social, and human capital they need to thrive.
70% of women owners of SGBs noted that they would want financing to grow their businesses but many (42%) have never applied for credit because of high interest rates, a lack of appropriate credit products and aversion to indebtedness.
“My business requires me to move to different places all the time, and I do not have a car. I have thought about asking for a credit… but my biggest fear is not being able to pay it back.”
Even when women owners of SGBs do have access to finance, they do not necessarily have the right type for their businesses. Most women-led SGBs (55%) are financed with personal credit cards.
In addition, women shoulder the majority of unpaid care work and face cultural gender barriers, or “machismo”, in their daily interactions with their families, co-workers, and clients.
“As a woman, it has been very difficult to work in the agriculture sector. Most [farmers] are men with hats and boots, so I have had to stay firm and put on my boots to be taken seriously.”
What do women owners of SGBs in Mexico need to thrive?
The report identified a range of recommendations aimed at accelerating growth for women owners of SGBs, including:
1. Access to a range of financial products
The survey made clear that “finance” meant different things for women, ranging from non-reimbursable grants from government agencies to traditional credit from banks. Crowdfunding and private capital is also in short supply. Financial and non-financial institutions in Mexico’s entrepreneurial ecosystem need to ensure that women’s financial needs are met in a holistic way.
2. Positive experiences in financial interactions
Banks need to be sensitised to the different needs of women-led SGBs and implement “gender intelligence” training to reduce bias in bank operations and credit approval processes.
3. Better quality and more targeted business development services
At least 97% of women want to participate in some form of training, mentoring, leadership or networking programme. There is a strong need for more tailored content, one-on-one attention and advisory services. Experienced women business owners need more advanced classes on issues like finance, sales tools and online marketing.
Following a successful pilot in Nigeria between 2015-16, the Cherie Blair Foundation for Women launched its Road to Growth project in Mexico in January 2018 – a collaborative venture supported by the ExxonMobil Foundation and delivered in partnership with Be School.
The bespoke Road to Growth curriculum is delivered via a blended learning approach, which provides business management and investment readiness training to 500 women (this phase is currently underway). One hundred of these entrepreneurs will also receive intensive business support over the subsequent six months, including extended training, personalised mentoring sessions and the opportunity to pitch to potential partners and investors.
The ultimate aim of the initiative is to unlock the skills and tools women need to grow successful, sustainable businesses and play a more active role in the Mexican economy.