Why Access to Credit is Important?

Women’s economic empowerment means greater agency, opportunities, and control over resources. This contributes to gender equality, poverty eradication and inclusive economic growth. Income earned by women has shown to have a great impact in social development as women tend to spend their money on health and education for their children. In addition, it is a potential solution for other problems women face; gender violence is an example.

One of the main ways women obtain their income is through business entrepreneurship. The number of businesses owned and run by women is on the rise. Nevertheless, there is still a perceivable gender gap. Most businesses are owned by men, and these tend to be bigger than those run by women. Women are more likely to hold small and microbusinesses. Additionally, businesses run by women target a smaller number of economic sectors.

One of the most important steps towards setting up a business is obtaining credit. Unfortunately for women in developing countries, gaining access to credit is more of a hassle than an aid. Women tend to ask for credit less frequently and when they do, they ask for smaller amounts than men. Women often ask for credit from informal sources, since applying for credit in formal institutions can be quite complicated.

What makes obtaining a credit loan so hard is that women don’t comply with the requirements that institutions ask for. Women usually don’t hold property titles, a credit history, nor do they have other goods that they may use as guarantee. Moreover, a lot of women lack the necessary entrepreneurial skills and financial education. Additionally, financial costs of getting a credit loan are pretty high, the guarantee system is too rigid and financial plans are too short. This picture is worst for women with low income.

Credit is important for the economic development of a country: it increases competitiveness, it fosters growth, it promotes flexibility within the economy, and it creates job opportunities. Women’s access to credit is a mechanism for businesses to start up. Female entrepreneurship empowers women, benefits families and has a positive impact their community. Giving women the opportunity to increase their income makes them agents of their own empowerment and grants them economic independence. Nevertheless, the existing economic credit doesn’t adapt to the needs of women.

The participation of women in the business world is vital for economic and social development. Because of this, it is important to be aware of the factors that limit women’s access to credit. Women should be viewed as possible credit subjects who need specific financial products. To reduce gender inequality, and to promote the participation of women in the business world, we must analyze existing discrimination and work towards the creation of new policies.

Our world calls for comprehensive and inclusive credit loan programs. There is a need for financial and business education so that women may have the same opportunities as men to start-up a business. Women, as half of the world’s population, hold the power to become a powerful economic driving force. Without support to answer their business needs, an enormous potential is being wasted. Credit products with a gender perspective are essential to reinforce women’s roles as entrepreneurs.

Angélica Fuentes, Founder Equal Invest

Angélica Fuentes is a Latin American businesswoman and impact investor, who has been recognized by Forbes Magazine as one of Mexico’s most influential women.

Ms. Fuentes was appointed CEO of Grupo Imperial in 1992 and quickly positioned the company as a top player in Northern Mexico’s energy sector. Under her leadership, Grupo Imperial’s annual growth rate increased from 5% in 1992 to 9.5% in 2005. Ms. Fuentes served as President of the Business Energy Network of the Asia-Pacific Economic Cooperation Agreement (APEC) from 2002 to 2004, and as President of the Mexican Natural Gas Association from 1996 to 2000. From 2007 to 2015, she served as CEO of Grupo Omnilife-Angelissima-Chivas. Under her leadership, the company became one of the top 100 corporations in Mexico.

Throughout her career, Ms. Fuentes has dedicated significant time and resources to NGOs, international organizations and professional groups that support the cause of women. She participated in the World Economic Forum’s Gender Parity Programme, and led the Mexican Gender Parity Taskforce. She currently serves on Secretary Clinton’s International Council on Women’s Business Leadership; is member of the Private Sector Leadership Advisory Council of UN Women; is a Global Advocate for the Girl Up Campaign, a United Nations Foundation program; co-chairs the PVBLIC LATAM regional platform; is member of the Latin American Program Advisory Board of the Woodrow Wilson International Center; and is member of the Global Dignity’s International Council of Advisors.

Her work in this field has been recognized by numerous honors and awards. In 2015, UN Women gave her the Women’s Empowerment Principles CEO Leadership Award; she was the first female CEO to receive this award for championing gender equality in the private sector. In 2016, PVBLIC Foundation, Ismael Cala Foundation, and the United Nations gave her the award for Latin Woman Empowerment. In 2017, she received the Corporate Social Responsibility Award from The Maestro Cares Foundation.

Gender equality, women empowerment and the eradication of poverty have always been a priority in all her endeavors. In 2014, she established the Angelica Fuentes Foundation. In 2016, she founded A Complete and The Imperative Fund. In 2017, she founded Equal Invest, The Beauty Station and A Complete Journey.

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