Chile is the best Latin American country for female entrepreneurs, says a new study. An index from the Economist Intelligence Unit and the Inter-American Development Bank’s (IDB) Multilateral Investment Fund (MIF) measures the climate for women-owned businesses in Latin America and the Caribbean. The Women’s Entrepreneurial VentureScope evaluated 20 countries on five categories: business risk, entrepreneurial environment, access to finance, access to education/skills trainings and social services.
Peru, Colombia, Mexico and Uruguay round out the top five with a relatively small margin separating each other. At the bottom sits Jamaica with Paraguay and Venezuela just ahead. The lack of property rights played a key role in the index and it is why Jamaica ranked so poorly.
The study reveals a connection between competitive economies and opportunity for women entrepreneurs.
“The findings of the WEVentureScope suggest that countries which provide women with the economic, regulatory, financial, educational and familial support they need to start and grow businesses also tend to be better at building competitive economies,” write the authors.
Central American women, with the exception of Guatemala, have more unequal property rights than their counterparts in South America. Lack of ownership can prevent women from accessing finance that can support their businesses.
Access to and control of property is fundamental to entrepreneurship, so policies and programmes that promote women’s access to marital property increase their opportunities as entrepreneurs.
The index is limited in scope due to the inability to collect information from all countries, but the overall trends give an idea of what it takes for countries in Latin America to support women entrepreneurs. Education, for example, proved to be a key area in some countries. Women who had easier access to higher education and skills training have better opportunities. Though there is room for improvement. The authors point to a lack of support for non-traditional sectors.
Microfinance has spread throughout the region, but it does not cut it alone. Businesses that grow need to take out larger loans and access different financial services. Many of the countries lack the structures that support a growing business. The authors encourage financial institutions to expand their financial products and services. That is where the MIF comes in.
The scores are meant to help put pressure on countries to improve opportunities for women. It also is a roadmap for the MIF to identify places where it can provide external support that will support national-level efforts to improve.
“We at the MIF and the IDB are committed to supporting women entrepreneurs throughout the region. The WEVentureScope will help us better understand what the obstacles are and how they can be addressed,” said MIF General Manager Nancy Lee.
