For true economic development, women are essential

Here’s why these organizations and their Rotary club partners are supporting local women’s entrepreneurship with financial literacy, small business loans, and one-on-one advisors.

Women’s economic empowerment contributes to a nation’s growth and to the world’s economic health overall. Studies have shown that it boosts productivity, increases economic diversification and income equality, and supports economic resilience. And income loss associated with gender discrimination costs the world economy an estimated $12 trillion and well as a reduction of 16 percent of cost to the global GPD.

In Guatemala, a country that for three decades was racked by civil war and where destitution and violence are still serious problems, a nonprofit called Namaste Direct is focused on women micro-entrepreneurs, helping them to lift themselves and their families out of poverty.

For Mayan women who run small businesses in Guatemala’s western highlands, and for many others, Namaste Direct provides crucial support. The San Francisco, California, USA-based group, which counts Rotary clubs from across the United States and Canada among its sponsors, employs a three-pronged approach: financial literacy training, mentoring, and microloans.

Factors that enable and constrain women’s economic empowerment:

Direct factors: linked to women’s individual or collective lived experiences

1. Education, skills development, and training
2. Access to quality, decently paid work
3. Address unpaid care and work burdens
4. Access to property, assets, and financial services
5. Collective action and leadership
6. Social protection

Underlying factors: wider structural conditions that determine women’s individual or collective lived experiences

1. Labor market characteristics
2. Fiscal policy
3. Legal, regulatory and policy framework
4. Gender norms and discriminatory social norms

Source: Women’s economic empowerment research report, 2016, Overseas Development Institute

One Namaste Direct client is Alva, who was raising two sons and running a small shop. She went through multiple cycles of Namaste support, expanding her shop and opening a hardware store, a beauty parlor, and a tortilleria. Another client, a weaver named Aura, makes clothes that she sells to tourists. Namaste Direct provided her with financial education and monthly advisory support. She learned how to keep control of her expenses, set her prices, and take advantage of the high season.

“Namaste takes women who’ve been in business but couldn’t pull themselves out of poverty and gives them the training and tools to generate income,” says Marilyn Fitzgerald, author of If I Had a Water Buffalo: Empowering Others Through Sustainable Lending. Fitzgerald, a member of the Rotary Club of Traverse City, Michigan, USA, says the Guatemala project is one of the best examples she has seen in her many years of research on sustainability and microfinance projects around the globe.

Namaste Direct built a program to teach financial literacy. Loan officers teach those skills, and advisers help each client come up with a business plan and analyze cash flow. The women aren’t lent more than they can pay back: Initial loans max out at $250 and must be repaid, and second- and third-cycle loans help bring the clients solidly into the middle class.