Rural Women: The Need for a Development Model with a Differentiated ApproachBy failing to understand the role of rural women in the financial affairs of the family, decision-makers will be prone to commit mistakes
When we examine the situation of rural women in Guatemala, we cannot overlook the fact that discrimination against and marginalization of this group has reached peak levels for three reasons: they are women; they are poor and they are indigenous people. By failing to understand their needs, and more importantly, the role they play in the financial affairs of the family, decision-makers will be prone to commit mistakes, not only in public policy, but more alarmingly, in creating agricultural, economic and food security development programs.
With the continuous flow of migration of rural farmers –stemming from inequality and a lack of investment policies and credit facilities -, we are seeing an increasing number of women assuming control of the rural production unit. Agricultural extension services failed to immediately recognize the urgency of supporting and providing technical resources for these women who had been left in charge of farming activities, with a consequent impact on the quality of products for consumption. This situation has been changing in some countries, but the lack of resources and expertise in agricultural production in the rural economy, coupled with the inflow of remittances from migrants to the United States, has led to a gradual abandonment of the land, which has impacted the national economy.
In recent years, increased remittances from the United States have been instrumental in the incorporation of the female head of the household, who is the primary recipient of these resources, into the financial system. This trend has been further reinforced by conditional cash transfer programs that have been established in several countries in the region. A 2016 survey by the International Organization for Migration (IOM) indicated that 55% (3,417,413 million) of recipients of remittances from the United States are women. Twenty-five percent of remittance beneficiaries are heads of household, 41.4% of these being women. According to the report, although just over 22% of households, at the national level, are headed by females, in the case of remittance-receiving households, the figure is twice that amount, “meaning that women - who have a partner abroad - assume new roles, make decisions in the home and participate in community activities, while also shouldering the responsibility of educating and caring for their children”. (IOM, 2016:23). Fifty-point-five percent of remittance beneficiaries live in rural areas.
With the continuous flow of migration of rural farmers –stemming from inequality and a lack of investment policies and credit facilities -, we are seeing an increasing number of women assuming control of the rural production unit.
This data reinforces the need to establish strategies to ensure the participation of women, allowing them to transcend their role as passive recipients of resources from abroad, and to assume an active role through their increasing impact on the local and national economy.
However, in a country with high levels of discrimination against women, and in particular rural and indigenous women, generating actions that address everyone’s needs, could prove to be a daunting challenge. The relative importance of remittances to local economies makes them an attractive target for different financial entities and mechanisms – most of them non-banking -, which provide informal credit arrangements that eventually saddle the women with abusive interest rates and lengthy repayment periods for purchases of consumer goods.
Therefore, in a climate in which investment policies in the farming economy are lacking, and in which the development model has contributed to high levels of social and cultural exclusion of most of the population, the creation of real and practical alternatives to incorporate women into economic and development processes, in a manner that promotes dignity and personal and family growth, seems impossible. Moreover, it would call for an interdisciplinary effort that would have to encompass different perspectives, in order to arrive at comprehensive solutions, in often adverse environments. In my view, there are three areas that require urgent intervention, and which have proven to be viable approaches, based on real life experience.
1. Financial education for change
Given the increased income of rural women who receive foreign remittances, on the one hand, and their growing impact on the local economy, on the other, these communities have experienced an influx of businesses that offer easy credit, taking advantage of the limited financial knowledge of these women to exploit them and drive them into debt. Financial education programs tend not to target rural women because they are monolingual and poor, and instead focus on individuals with higher levels of education and greater resources, which would qualify them to receive credit.
These communities have experienced an influx of businesses that offer easy credit, taking advantage of the limited financial knowledge of these women to exploit them and drive them into debt.
One example that illustrates misconceptions in the traditional approach of these programs, is the fact that the Institute for Education on Sustainable Development (IEPADES, Spanish acronym), has been working with rural, indigenous and extremely poor women since 2010, by strengthening their knowledge in areas such as saving and community loan schemes. Based on the methodology of Saving for Change, we have used an integrated approach to develop a new process to strengthen these groups of women by educating them on how to manage their savings and also training them to become community leaders, and consequently agents of real change. In 2010, our goal was to register 400 women in savings groups, each with an initial deposit of as little as US $2.00. This year we catered to more than 13,000 women, organized into more than 600 groups that not only focus on saving, but impact the community and actively participate in local decisions, many of them through networks that have been established to improve efficiency. Each member has accumulated savings of approximately US$612.00.
The methodology that we have been developing has also involved training these women to cultivate their home gardens (focusing on agroecology, independence and food security), and/or to enhance craft-making skills. The attempt to identify markets by organizing municipal fairs to sell products, in strategic partnership with municipal councils, is a means of facilitating networking and encouraging participants to meet and to exchange good practices. In collaboration with other entities, such as the Procuraduría de Derechos Humanos (Human Rights Ombudsman), Defensoría de la Mujer Indígena (Office for the Defense of Indigenous Women), the Oficinas Municipales de la Mujer (Municipal Women’s Bureau), and some ministry programs, we have been instrumental in strengthening leadership and growth on a personal and a group level, and consequently, have had a positive effect on the community. More than 70% of savings is used for short-term loans among members of the group, for the purpose of small businesses, education (particularly of girls), health, food and agriculture.
Building on this experience, IEDPADES is seeking to take the process one step further, focusing on two objectives: to provide access to banking services for the majority of members, for security reasons as well as to integrate them into the financial system; and to find a way of assisting small businesses and networks to become competitive entities that can increase the resources and quality of life of women and their families. Not only will this require a relationship with the banks, but also the development of an entrepreneurial outlook that takes into account the reality of these women, rather than adopting a traditional approach.
The most frequent complaints filed at the Ministry of the Public Service in Guatemala involve cases of violence within the family. Our institution has been working for years in the area of prevention. We have reached the conclusion that training women in these issues will have no significant effect unless women have their own resources, thus providing them with economic independence. The women recognize this, as evidenced by the exponential growth of the groups.
2. Financial inclusion/ development bank
It is therefore clear that these collective saving programs and their various components allow women to evolve and grow, as individuals, and to be strengthened through their participation in groups. However, in order for them to reach the stage where they have a greater impact on the economy, women will undoubtedly require specific products that recognize the needs of the users themselves and are developed with this in mind. An example that is worth mentioning is the effort of Guatemala’s Rural Development Bank to develop services specifically geared towards financial inclusion.
Two of the most significant innovations in this area have been the use of fingerprint recognition technology to activate banking services and the installation at the national level of automated teller machines that accommodate the Mayan languages. These two elements have been fundamental in incorporating the Mayan rural population into the banking system, but have been particularly beneficial to rural, indigenous women. Not only can they use this service to manage their bank accounts, but they can also use it as a mechanism to receive remittances from the United States, as well as conditional cash transfers from government programs, as required.
Two of the most significant innovations in this area have been the use of fingerprint recognition technology to activate banking services and the installation at the national level of automated teller machines that accommodate the Mayan languages.
On the other hand, the bank has developed custom-made financial products and services, incorporating value added components that foster and promote health, and the financial education of families and communities. For example, the “Señora Cuenta” (Her Account) product has more than 1.8 million account holders (each with an average savings of US $283 and a total portfolio value of more than US $52.5 million), who receive financial education and technical training for their businesses. This also allows them to access microinsurance, geared towards preventive health for women. On the other hand, the Grameen model is also being pushed (community development bank), and now includes almost 100,000 women, with credit of more than US $1.5 million.
The success of the financial inclusion schemes established by BANRURAL demonstrates the importance of designing specialized products that recognize the needs and the realities of women. The challenge is to incorporate the essential components of entrepreneurship into these products, in order to promote the development of production networks and small businesses that can become successful in an environment that is often not conducive to rural entrepreneurship.
Having discussed the abovementioned examples, let us now turn to the third area that must be addressed in order to make a meaningful contribution to the development of rural women: investment and the strengthening of entrepreneurship skills, as a means of ensuring greater and more significant impact on the economic growth of women. Referencing the work of other authors, Sancho (2010:72) states that a work model to strengthen agricultural entrepreneurship should include four consecutive steps:
a) Organization of farmers;
b) Support services;
c) Commerce, “learning by doing”; and
In other words, successful experience has shown that the situation of rural women requires a partnership between stakeholders who can develop a roadmap that includes these four elements in the process. In fact, if organization, financial education and credit already exist, the next step is to collaborate in finding channels to sell products, but prior to that, determining which products are innovative and feasible enough to be successful. To do so, they must identify the distinctive elements that enable women to develop strategies based on their own reality and in keeping with their needs and potential, bolstered by adequate technical resources, as well as by financial products tailored to their context and geographic location.
Having said this, a primary factor that is missing in this scenario is the development of differentiated public policy, targeting women in general, and in particular rural women. These policies must recognize women as agents and stakeholders of development and social change. While acknowledging that policy has failed to address rural communities, in general, providing limited access to innovation and credit, programs targeting rural woman are non-existent.
Experience has shown us that from saving, to managing family finances, they are capable of generating wealth and changing their environment.
In an environment as biased as the production and rural world, women have not been identified as stakeholders in economic development, but merely as passive players, through their receipt of remittances. Therefore, the development of a strategy that understands and addresses the rural woman, based on her own realities and needs, is a matter of urgency. Experience has shown us that from saving, to managing family finances, they are capable of generating wealth and changing their environment. What is lacking is a development model, based on a comprehensive approach, tailored to the unique circumstances of rural women. It should provide them access to education, the development of entrepreneurial skills, credit and market opportunities, thus allowing them to develop production processes and chains, at the individual level, and as a group to generate collective wealth and an acceptable standard of living for themselves and for their community.
BANRURAL - Banco de Desarrollo Rural (Rural Development Bank). 2017. Memoria de labores 2017 (Work Review 2017). Guatemala. 36 p.
IEPADES - Instituto de Enseñanza para el Desarrollo Sostenible (Institute of Education for Sustainable Development). 2017. Informe del Programa Ahorro y Préstamo Comunitario: microfinanzas rurales manejadas grupalmente por mujeres. (Community Savings and Loan Program Report: rural microfinancing managed by women’s groups). Guatemala City, Guatemala.
IOM (International Organization for Migration) 2017. Encuesta sobre migración internacional de personas guatemaltecas y remesas 2016. (The Survey on International Migration of Guatemalans and Remittances 2016) Guatemala City, Guatemala. 152 p. Available in Spanish only at: http://onu.org.gt/wp-content/uploads/2017/02/Encuesta-sobre-MigraciOn-y-Remesas-Guatemala-2016.pdf
Sancho, F. 2010. La empresariedad agrícola y rural: conceptos para modelar el desarrollo (Agricultural and rural entrepreneurship: concepts for modeling development). COMUNIICA. Year 5. January-July. 64-78 Available at: http://repiica.iica.int/docs/b2032i/b2032i.pdf