Ecuador fresh produce seller/Shutterstock

7 March 2024

How to close the economic gender gap? Lessons from Latin America


Around the world, a gender gap continues to hinder women from achieving their full potential – what can be done about it?

By Francesca Randazzo, Expert on sustainable and innovative finance, Luxembourg Development Cooperation Agency (LuxDev)


The World Economic Forum’s 2023 Global Gender Gap Report reveals that Latin America and the Caribbean will be the first region to attain full gender parity. Don’t hold your breath, the milestone is predicted to happen 52 years from now, in 2076. While that’s still considerably faster than Europe (2090), North America (2118), and Southern Asia (2172), I’m not sure I’ll be in my full capacity to witness it!

Having tracked women’s access to financial services in Latin America for many years, it might be helpful to explore the main drivers that are facilitating or hindering progress.

Persistent social gender representations

Latin America is well known for its machismo culture, which asserts male dominance in everyday life. Less well known, but equally influential, is a marianismo culture which emphasizes the role of women as submissive, selfless, and centered around family and home.

These representations of men and women in society are all-pervasive, and they matter. They shape how children imagine their own roles and identities. If you grow up imagining your place is to be submissive, it’s that much harder to take risks, and imagine yourself as, and become, an entrepreneur.

The need to juggle family and work

Women are the primary caregivers in Latin American culture, spending as much as 30 percent of their time on unpaid domestic work and care activities. According to UNDP, the average time women dedicate to unpaid work is 2 to 4 times higher than that of men in all LAC countries, leaving much less time available for paid employment. Similarly, social pressure to marry and have children means that for many young women, career aspirations can never take off.

Family shouldn’t be a burden, and it is possible to adapt training venues and workplaces to the specific needs of women caregivers, along with raising awareness of new forms of masculinity and household roles.

Structural barriers to formal employment

Along with social and cultural factors, women entrepreneurs face other barriers. Poverty, lack of access to education and training, lack of property rights, and difficulties in accessing financial services all make it very difficult to get a business off the ground.

As such, for most women, the only viable option is to operate in the informal economy. This leaves them vulnerable to the slightest economic or environmental shock.

Yet despite the many barriers placed in their way, women entrepreneurs are a growing economic force in Latin American countries: Ecuador is just one example where they play a vital role in the economy.

Political empowerment leads to economic empowerment

One factor supporting women’s advancement is referenced in the WEF Gender Gap Report, which found that the share of women holding ministerial and parliamentary positions in the region is 35%, the second-highest score after Europe. Argentina was the first country in the world to pass a gender quota law, while Mexico, Bolivia, and Ecuador have mandated gender parity across all government offices.

Mandating women as high-level legislators and bureaucrats sends an important countersignal to the marianismo view of women as submissive and secondary. However, it is important that this representation does not fall into perpetuating male behaviors, and that women holding those positions define new ways of female leadership to make the ecosystem truly gender inclusive, as opposed to simply meeting quotas.

How can we make life easier for women entrepreneurs?

At LuxDev, strengthening the socio-economic integration of women and youth is one of our four key strategic themes. Our work to promote female entrepreneurs in Latin America includes a four-year program implemented jointly with CENPROMYPE, a regional body whose mandate is to promote public policy in Belize, Guatemala, El Salvador, Honduras, Costa Rica, Nicaragua, Panama, and the Dominican Republic.

The program has three specific objectives:

  • Integrate principles of equality and women’s economic rights into regional MSME regulations
  • Improve women entrepreneurs’ access to sustainable financial and non-financial services
  • Strengthen CENPROMYPE’s capacity to promote and enable women’s entrepreneurship

The program has a target population of 1,250 women entrepreneurs, at various stages in their business development cycles, as direct beneficiaries, including at least 50 business development service providers, 50 women managers, and 250 advisors and mentors. Indirect beneficiaries will be the 2,500 newly employed people in women-led enterprises.

As a spin-off of this program, and to boost women-led SMEs capacities, an impact fund, the Female Entrepreneurship Fund (FEF), will be launched soon. Powered by CENPROMYPE, with the support of LuxDev and the Luxembourg cooperation, and in partnership with IforD and Total Impact Capital, the FEF will provide gender-smart financing to financial intermediaries in the region, along with high-level technical assistance to contribute to close the gender financial gap.

Creating a favorable environment for women is possible

Our work in Latin America is setting the groundwork to create the conditions for women’s equitable participation in the economy. Building an institutional environment that fosters women’s economic autonomy will take years and will require multiple stakeholders, but I am convinced the effort will successfully counteract the socio-cultural barriers that have held women back for too long.

52 years is too long to wait. Let’s work together, in Latin America and around the world, to give women equal opportunities to contribute to their economies.

© Alliance for Financial Inclusion 2009-2024