Peru is considered one of the strongest environments for women entrepreneurs in Latin America. More...
Peru is considered one of the strongest environments for women entrepreneurs in Latin America. This dynamism can be attributed to Peru’s great strides toward stabilizing the economy after decades of conflict, reducing and streamlining the process for starting a business, and making credit more accessible for all entrepreneurs. Peru’s ranking of 35th out of 189 economies surveyed in the World Bank’s Doing Business report for 2015 is the second highest in Latin America, after Colombia, and an improvement over its ranking of 71st in 2006. Peru has significantly reduced its rate of poverty in recent years, from 55.6 percent in 2005 to 23.9 percent in 2013. While there are still improvements to be made—such as through providing better access to training and higher education opportunities—Peru has a solid foundation to continue to reduce poverty and expand its economy, including through its commitment to supporting enterprises started and managed by both men and women.
As in other Latin American economies, Peruvian women face the double and triple burdens of parenting, caregiving, and earning money outside the home. Peruvian women (ages 15–64) participate in the economy at a rate of 69 percent, significantly above the average women for Latin America (58 percent). Men’s rate of participation was 87 percent in 2013, according to the World Bank.
Many services for entrepreneurs in Peru are targeted at women starting micro or small businesses. Among the economy’s 40 microfinance institutions, many target women for their programs: in fact, women made up the majority (52 percent) of microfinance borrowers in 2012. Among traditional banking institutions, women and men in Peru have approximately equal access to loans, with 12.4 percent of women and 13.2 percent of men holding a loan, according to the Global Findex.
The WEVentureScope report, a review of conditions that support women entrepreneurs in Latin America, ranks Peru second out of 20 Latin American economies it surveyed in 2013. According to the report, the desire to start a business is high in Peru—43.6 percent of men and 40.6 percent of women said they wanted to start a business. The desire does not often translate into ability to start a business, however. The GEM Peru report from 2012 found that 17.6 percent of women were entrepreneurs in Peru, compared with 22.6 percent of men. Women entrepreneurs were mostly concentrated in the consumer sector, with 82 percent of women entrepreneurs opening a business in consumer goods, versus 57 percent for men. Not surprisingly, the concentration in the consumer sector results in women’s businesses employing fewer people: women typically employ five employees or fewer, while men employ 20 employees or more. Part of the problem may be that while there are some business networks and training programs for women, there are not enough of them to reach every woman who is interested.
Many, but not all, of the networks and associations for women entrepreneurs specifically target micro and small women entrepreneurs, with the central goal of poverty alleviation. As Peru continues to grow as an economy, there will be demand for more services that target the needs of medium and larger businesses, women-owned or not. The economy especially needs investment in amounts greater than $250,000, so that companies can grow and embrace innovation opportunities. As of 2015, there were only a reported 10 angel investors in all of Peru.
The government of Peru and private actors are addressing this gap. Since 2010, there has been significant focus on start-ups, particularly for technology-oriented businesses. Startup Peru, modeled on Chile’s successful example, had its first call for submissions in October 2014. A number of initiatives—Wayra, Lima Valley, and Startup Peru—have focused on growing business ideas, particularly in technology and innovation, at the startup phase. Peru has a significant degree of IT talent, and its location near Chile and Colombia could result in access to larger markets than just the domestic market.
As detailed in this section, Peru offers some best practices for the development of female entrepreneurs—in particular through access to finance and ease of creating a business—while also displaying potential to expand business networks that reach women entrepreneurs at the medium and large business size.
Peru has a number of networks and associations of women entrepreneurs throughout the economy and focus particularly on Lima and the larger cities in Peru. These groups are active in holding events and connecting their members to potential suppliers and buyers, and connecting with each other.
Networks that support women’s access to capital and assets:
Networks that support women’s access to markets:
Networks that support strengthened capacity and skills for women in business:
Networks that support women’s leadership, voice and agency:
Networks that support women and innovation and technology:
Peru has a significant number of private-sector initiatives targeted at women or at entrepreneurship. Many of the initiatives are long-standing activities in Peru, most with poverty alleviation or microfinance-focused programs with locations throughout the economy. Many have a proven track-record of supporting entrepreneurs in handicrafts, localized retail and food preparation. There are also many new entrants focused on project start up, like Wayra, Startup Grind, and Startup Weekend that focus on high growth business ideas and technology and innovation in particular. While most of these do not target women directly, women may participate. One potential area of growth may be more direct targeting of women in the innovation and technology sectors and ensuring that women entrepreneurs are included on their management teams and as advisers. Unlike in other economies, there are few companies, apart from Freeport McMoRan, that have programs targeted at women or women-owned businesses. This presents a potential opportunity for private companies to highlight managerial and entrepreneurial women in Peru.
Initiatives that support women’s access to capital and assets:
Initiatives that support women’s access to markets:
Initiatives that support strengthened capacity and skills for women in business:
Initiatives that support women’s leadership, voice and agency:
Initiatives that support women and innovation and technology:
While not necessarily targeted at women, Peru has a number of services that make it easier for entrepreneurs to start and expand their businesses. For example, the CreceMYPE portal, through the Ministry of Industry, assists potential and current entrepreneurs in developing business plans and obtaining licenses, as well as assisting businesses with fewer than 100 employees with additional training in quality control, productivity, and human resources to facilitate expansion. The portal also connects entrepreneurs to public procurements and to financial institutions offering loans to micro and small enterprises.
All these types of services create an environment where entrepreneurship is encouraged. Some innovation is also happening at the municipal level, as a number of municipal level governments have programs targeted at women, such as the Embark Women program implemented by the Municipality of Lima mentioned below.
The Ministerio de la Mujer y Poblaciones Vulnerables (MIMP—Ministry of Women and Vulnerable Populations) was established in 1996 and focuses on designing, promoting, and implementing public policies that support women and other populations that face discrimination. MIMP was establishing an Office of Promotion and Development of the Economic Empowerment of Women as of December 2014 as well as a Plan of Action for Women’s Economic Empowerment that will focus on ensuring women’s economic independence and will guide the activities of the MIMP. MIMP has been active in reforming the Law on Secured Transactions to better benefit women-owned micro and small businesses, which make up the majority of MSMEs in Peru, and which account for 99 percent of all businesses in Peru.