TRADE AND INVESTMENT WG

Women face more challenges when undertaking entrepreneurship and taking part in international trade

According to Sebrae data, in Brasil companies led by women earn 60% less than those led by men. In foreign trade, 14% of Brazilian export companies belong to women. A study by the Ministry of Development, Industry, Commerce and Services reveals that measures are needed to encourage women's presence in the international market.

06/27/2024 2:00 PM - Modified 15 days ago
Women face more difficulties in undertaking entrepreneurship and participating in international trade when compared to men.

Almost everywhere in the world, women face cultural barriers and additional challenges when they decide to start their own businesses, to access the financial system and to obtain credit, for example. Moreover, in times of crisis such as now—in which the world faces wars and climate change—, the financial system is reluctant to take risks and fund small businesses.

According to Renata Malheiros, coordinator at the Brazilian Micro and Small Business Support Service (Serviço Brasileiro de Apoio às Micro e Pequenas Empresas/Sebrae) of the Sebrae Delas program, female entrepreneurs in Brasil are 22% more trained than men. Nonetheless, companies led by women earn 60% less than those led by men. In other words, men are less trained but earn more than women. For Renata, one of the factors that creates this reality is the time that adult women have to dedicate to their own businesses.

The MDIC study also revealed that trade costs and barriers affect smaller companies disproportionately, discouraging them from seeking out global markets. Therefore, as the majority of companies owned by women are micro and small, measures are needed to reduce the costs of entering the international market.

“At Sebrae we discovered that women spend 17% fewer hours at their companies than men do. In general, these women are taking care of children, of the elderly and carrying out unpaid household chores. Care work is super important, but it takes time and is usually unpaid,” says Renata.

Another recurring issue is that women start businesses informally due to the need to support their children and are unable to legalize the enterprise. Gisela Davico, from the international organization Better than Cash Alliance, believes that despite the progress made in recent years, there is still a gap between men and women in the financial system. A survey carried out by the Alliance found that more than 66% of MSEs led by women around the world operate in the informal sector.

“Often a woman has a single cell phone for her entire family, or does not have any connectivity because she lives in a rural area. There are so many challenges. and, in general, women invest in the well-being of their families. So providing access to financial services can offer dignity to entire families,” argues Gisela.

Encouraging female participation

Sebrae Delas coordinator Renata Malheiros during a G20 event at Banco Central do Brasil - BCB. Image: Vinícius Andrade/ Agência Sebrae
Sebrae Delas coordinator Renata Malheiros during a G20 event at Banco Central do Brasil - BCB. Image: Vinícius Andrade/ Agência Sebrae

To Brazilian women, starting a business in their own country is not easy, nor is participating in international trade of goods and services a simple task. In 2023, the Ministry of Development, Industry, Commerce and Services (Ministério do Desenvolvimento, Indústria, Comércio e Serviços/MDIC) published the study “Mulheres no Comércio Exterior (“Women in Foreign Trade”), which showed that only 14% of Brazilian exporting companies and 13% of importing companies have a preponderance of women on their boards.

This result is slightly above the average among the 76 developing and emerging countries that were analyzed by the World Bank Enterprise Survey. The study revealed that, among export companies, women own only 10% of manufacturing companies and 12% of service companies.

The MDIC study also revealed that trade costs and barriers affect smaller companies disproportionately, discouraging them from seeking out global markets. Therefore, as the majority of companies owned by women are micro and small, measures are needed to reduce the costs of entering the international market.

Thinking about and discussing the inclusion of women in international trade is a strategic agenda of the Brazilian presidency of the G20. The Trade and Investment Working Group has been debating the issue with the intention of helping to expand development opportunities for sectors of society with little participation, such as with women. And thus accelerate progress towards inclusive and fair trade.

The group is coordinated by the ministries of Foreign Affairs (Ministério das Relações Exteriores/MRE) and Development, Industry, Commerce and Services. At the end of this year, the WG expects to launch a G20 summary presenting best practices to increase the participation of women in international trade.

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