By Daniela Izquierdo*
Latin America is home to the second-highest rate of women’s entrepreneurship in the world, and the existence of women entrepreneurs in this region is proven to stimulate economic growth and create new employment opportunities.
Therefore, beyond lip service, it is vital to tackle the obstacles that come in the way of women’s entrepreneurship across Latin America. Increasing funding opportunities, the awareness of gender-specific financing options, and vocational training programs are fundamental first steps in improving the total entrepreneurship activity of women in Latin America.
Lack of startup capital and access to credit are often the most considerable obstacles to women’s entrepreneurship. Grants and other targeted funding opportunities are creative solutions used to address female entrepreneurs’ funding gaps. Examples include FMO: Entrepreneurial Development Bank and the Inter-American Development Bank (IDB), two financial institutions that have programs aimed at funding female entrepreneurship enterprises in Latin America.
The IDB’s WeXChange program offers to fund to Latin American women. Non-profits like UN Women, Financial Alliance for Women, Start-UpChile, and Empoderando Mujeres also provide funding specifically for women entrepreneurs.
Limited business expertise is another deterrent that prevents many Latin American women from starting a business. Vocational programs that provide insight into creating and nurturing new enterprises can help stimulate the emergence of new women-owned businesses as well as improve productivity and technological progression.
Additionally, to provide practical business education, mentorship programs that allow prospective female entrepreneurs to shadow successful female entrepreneurs and experience the nuances of establishing and operating a business are essential.
Patricia Sáenz, managing and founding partner at EWA Capital Startups, the first women founders-led private fund in Colombia, suggests that women involved in shadowing startups are more likely to go on to create their own companies: “we believe that the more women we have in the C level in startups… [the more likely] they will create their own companies.”
Based on the precedent set by financial institutions and non-profits, government entities should look into establishing more accessible access to funding either through local banks or through the promotion of similar programs. However, these funding opportunities need to be properly advertised to ensure information spreads for women to take advantage of.
Government entities need to renew their commitment to gender equality initiatives. Latin American governments including Chile, Costa Rica, Peru, Uruguay, and Venezuela have all had women and gender equity-focused programs in place over the past 7 years that have either ended or lapsed in funding. Ensuring that these programs are renewed with a focus on access to financing and business education will be key to stimulating womens’ entrepreneurship in the region.
Promoting the growth of women-owned businesses is a surefire way to drive economic growth in Latin American markets. Policymakers and business leaders alike should take concrete steps to bridge funding gaps, increase awareness of programs, and provide direct training to the region’s crucial women entrepreneurs.
*Daniela Izquierdo is the co-founder and CEO of Foodology, a Latam-based cloud kitchen and virtual restaurant developer group.