IDB and ABDE Study Shows that Women Represent 30.6% of Employers in Brazil

• A new study shows a gender gap in financing in Brazil and analyzes the main characteristics of women-owned businesses in the country. 

• In Brazil, women make up less than one third of the owners of employer firms and 35.3% of businesses owners, considering all business sizes. 

BRASILIA, Brasil - The recently released study “A Gender Perspective on the Characteristics of Brazilian MSMEs and Barriers to Accessing Credit (in Portuguese)” by the Inter-American Development Bank (IDB) and the Brazilian Development Association (ABDE) found that only 30.6% of employers and 35.3% of businesses owners in Brazil are women. 

The study, available in Portuguese, reviews the main characteristics of Brazilian MSMEs that are owned or led by women to provide a better understanding of the segment’s needs from a gender perspective and shed light on how to craft effective public policy solutions to meet those needs. 

“Removing barriers to female entrepreneurship doesn’t just concern women. It is in the interest of society as a whole, so it’s a priority for the IDB. As framed in our Vision 2025, we have to include everyone to restore economic growth,” says Morgan Doyle, IDB Group representative in Brazil. 

ABDE President Jeanette Lontra adds, "In our society, women entrepreneurs still have trouble even getting a loan to be able to invest in their companies." 

Profile of women-led Brazilian companies 

According to the study, women have greater participation in healthcare, education and social services. They make up 56% of micro-enterprise employers and 51% of small enterprise employers in this sector. This sector-based analysis finds a greater concentration of women in caregiving activities, which involve social and economic considerations that should be taken into account when financing these enterprises. Furthermore, women who lead businesses have a more years of schooling than men on average: 43% of women have 16 years or more of education, compared to 30% of men. 

Similarly, half of female employers have a partner in their company or business, while among men this percentage drops to 42.4%. The data may reflect uneven needs related to the business’ capital structure and risk distribution, as well as the division of responsibilities and the ability to be absent from the company for certain periods of time.  

Access to credit 

The information collected in the study also shows that in the last quarter of 2020, 58% of loans (by value) were granted to male micro-entrepreneurs, while the remaining 42% were for their female counterparts. This gap of 16 percentage points to the detriment of female micro-entrepreneurs could reflect both easier access to credit for male micro-entrepreneurs and an underrepresentation of women among entrepreneurs. 

The study also concludes that one way to close this gap is by offering financial products focused on women. It emphasizes the importance of the Development Financial Institutions (DFIs) of the National Development System in this task: fourteen DFIs in the Brazilian National Development System offer specific credit lines and/or programs for female entrepreneurs. 

Finally, the study recommends that the push for financing for female-owned businesses in Brazil should focus on economic growth, on mitigating the effects of COVID-19 on the production system, on reducing inequalities in the female entrepreneurship, and on advancing financial products geared toward financial inclusion of women.  

The study shows that Brazil needs to promote greater access to credit for micro, small and medium enterprises (MSMEs) owned or led by women to boost the resilience of companies, production chains and the Brazilian economy. 

Download the full study here.