Authored by: Edward Jackson, Denise Beaulieu, Natalie Ewing-Goff and Aidan Palacio
Introduction
Gender-lens investing initiatives around the world declare that mainstreaming gender in development finance and impact investing is about both men and women. Yet in most countries there are such egregious, multi-dimensional barriers to women entrepreneurs that these efforts are—and must be—primarily about advancing women’s access to capital.
However, in the Caribbean region, gender-lens investing must really also be about the men. And the Development Finance Corporation of Belize is charting a way forward.
Gender Gaps in Development Banking in the Caribbean
At a recent conference on development banking for sustainable development in the Caribbean, co-hosted by the Caribbean Development Bank and the Saint Lucia Development Bank, speakers on a panel on gender mainstreaming highlighted gender gaps in development lending in the region.
Sex- disaggregated data from the SLDB, for example, show that, overall, male borrowers receive 53% of the Bank’s loans while female borrowers receive 39%. The imbalance in favour of men is most pronounced in the productive sectors, including agriculture, where male borrowers account for 63% of the loans and women only 17%. However, for education loans, the situation is reversed. In this sector, female borrowers receive 69% of those loans and males just 31%.
Throughout the Caribbean, two realities co-exist: Gender discrimination against women is widespread in society, including the persistence of high levels of gender-based violence. And, as elsewhere, women are expected to carry a disproportionate load in terms of home, child and elder care while also earning a living outside the home. Furthermore, across the region, a high percentage of households are headed by women, sometimes close to 30% officially, as is the case in Belize.
At the same time, though, men have fallen significantly behind in educational attainment at the secondary and tertiary levels and, more frequently are under-represented in good jobs in the formal economy. But women’s strong educational achievements are not always matched in the labour market; women still tend to earn less than men in the same or comparable jobs. These trends have been building over several decades.
It is clear that if local development banks are to have any real chance of addressing this complex cluster of issues, and rebalancing their portfolios in the interests of both human rights and business profitability, they must design and implement gender-equality policies that are actively and consistently supported by senior management, appropriately trained staff and retooled administrative systems.
Gender Mainstreaming in Development Finance in Belize
The mission of the Development Finance Corporation of Belize, a government entity, is to “provide financing and support services for the long-term sustainable development of Belizean businesses and our people”. Operating six branch offices, the Corporation is a direct lender, offering a suite of loan products across a range of sectors, including agriculture, tourism, industry and manufacturing, renewable energy, energy efficiency and professional services, as well as providing residential and education loans.
In culturally diverse Belize, financial inclusion has become an increasingly important priority for DFC. In 2019, the Corporation worked closely with the Central Bank of Belize and the Department of Finance to co-sponsor nationwide consultations leading to the publication of the country’s National Financial Inclusion Strategy. Also that year, DFC joined the Caribbean Development Bank’s DFIs Engage in Gender Equality project, which provided technical assistance for the Corporation to prepare a comprehensive Gender Equality Policy and Action Plan.
A series of activities supported by the CDB project was undertaken in October 2019, including engagement with DFC’s Board of Directors, consultations and training with the senior management team and the loan-operations staff, and community consultations with business and social organizations in four of Belize’s six districts.
Analyzing Sex-Disaggregated Loan Data
One of the initial exercises prompted by the project, and whose results were presented and discussed in both the staff training sessions and the community consultations, involved an analysis of sex-disaggregated data from the DFC loan portfolio. First, Table 1 lists the leading sectors in the portfolio overall by share of loans, pointing to the importance of the agriculture and residential sectors, in particular.
Table 1: Main Sectors in DFC’s Loan Portfolio, 2018 – Year End
However, as Table 2 shows, when the DFC loan-portfolio data are disaggregated by sex, a more complex picture comes into focus. In terms of numbers of loans to individuals (this data set excludes loans to organizations), individual male borrowers received an average of 61% of total loans each year; they also received 55% of the value of all loans. In contrast, individual female borrowers received 38% of the total number of loans, representing only 23% of the value of all loans.
Table 2: Three-Year Average Loan Data Disaggregated by Sex, 2016-2018
The general trends over the three-year period were as follows:
• In agriculture, tourism and services, more loans and larger loans were provided to men;
• In terms of education, more loans went to women, but loans were of similar size for women and men; and
• In residential lending, more loans were provided to men, but loans were of similar size for women and men.
The analysis then took a deeper dive into two sectors. The first of these was tourism. As Table 3 shows, the three-year average data were heavily imbalanced toward male borrowers, who received 83% of the loans in this sector, representing 94% of the value of all tourism loans. For their part, women received 17% of tourism loans and only 6% of the value of all loans in this sector.
DFC staff identified a number of factors contributing to gender gap in tourism loans. First, some forms of tourism business are capital-intensive and high-risk in nature, but women, managing a range of household priorities, tend to be prudent in their business borrowing modest in the size of their loan requests. Second, the evolution of certain traditional roles for men—such as fishermen becoming tour guides on the water—does not align well with cultural expectations of women by men and sometimes by women themselves.
More generally, lack of collateral (in the form of land, equity, savings, etc.), limited technical assistance for women’s businesses, and inappropriate loan products are also viewed by DFC staff as factors constraining women’s borrowing in the tourism sector. However, some segments offer new opportunities for the self-employed and small-operator initiatives of women and also of young men, such as tourism-related entertainment (e.g. in music, film and the arts), event planning, medical and wellness tourism, and agro-tourism.
Staff and community discussions suggest that while social norms and employment patterns help shape these trends, there is also room for growth in this sector of DFC’s portfolio to increase the number of loans to women borrowers as well as the size of such loans.
Table 3: DFC Loan Portfolio Data Disaggregated by Sex, 2016-2018 – Sector - Tourism
The second sector assessed more closely was education. Presenting data for this sector, Table 4 shows that women received 60% of all education loans (usually for university degree programs in Belize or abroad), representing 59% of the value of all loans in this sector. For their part, men received 40% of all education loans and 41% of the value of all loans in this sector.
The DFC team and community stakeholders are aware that educational loans have, at least in the past, been allocated on the basis of traditional patterns. Areas of study dominated by women have included, for example, teaching, business, nursing and the arts, while men have been more prevalent in engineering, medicine and information technology. It may be that loan limits are too low in the sciences for more women to access financing for their studies in STEM. This requires a thoroughgoing review.
DFC staff and community consultations have highlighted the fact that one obstacle for young men in particular is that applicants for technical and vocational education loans must have a high school diploma. With high dropout rates among young men at the secondary-education level, this is problematic. DFC team is exploring ways and means of marketing more education loans for technical and vocational loans to men, in a country where the burgeoning construction industry needs many more trades specialists.
Table 4: DFC Loan Portfolio Data Disaggregated by Sex, 2016-2018 – Sector - Education
Senior management at DFC continue to work with staff and external partners to understand better in detail the main factors contributing to these gendered patterns and the specific barriers facing particular groups from accessing Corporation financing.
Moreover, DFC is aware that increasing its lending in key sectors to women will pay off in commercial terms. Indeed, other Corporation data confirm that women’s loan repayment performance is generally better than that of men across the portfolio (see Table 5).
Table 5: Loan Portfolio Quality for Men and Women, DFC Portfolio, 2019
The Capital Continuum
The community consultations offered an opportunity for frank discussion on products and business processes; some customers pointed to lengthy loan-approval procedures and uneven responsiveness to customer needs. Senior Corporation representatives committed to improving DFC’s performance in these and other areas.
A key gender-related issue that arose in all community consultations was that of collateral. In many sections of Belizean society, women have less access to property ownership than men, facing barriers derived from discriminatory laws as well as social norms. In response, DFC representatives agreed to examine alternatives to property-based collateral, such as dual guarantors, cash-flow lending, and group-based lending.
One of the outputs of this consultation process was the depiction of a continuum of capital, presented in Figure 1, which identifies and contextualizes the core lending business of the DFC and underscores the importance of the Corporation working in partnership with other organizations.
Figure 1: The Capital Continuum
DFC’s Gender Equality Policy and Action Plan
Figure 2 sets out the main features of DFC’s Gender Equality Policy and Action Plan—the GEPAP. The goal of the policy is: “To contribute to the sustainable development and growth of Belize through improved access to financial services for Belizean women and men”. The goal recognizes that men must be part of the solution to gender gaps, but that a special effort is required to advance women in the economy.
The GEPAP has three priority area areas. The first is gender lens investing (GLI), and calls for gender considerations to be mainstreamed into all aspects of the DFC loan cycle for all products and sectors. It also calls for the development of new financial products to address unmet needs as well as efforts to mainstream gender equality into the supply chains of customer businesses.
The second priority area focuses on human resources and leadership inside the Corporation. The key results targets here include adoption of an equal opportunity hiring and promotion policy, training for all staff in GLI and gender mainstreaming, and the promotion of female leadership in business and the workplace in borrowing enterprises and in the Belizean economy at large.
The third and final priority area involves partnerships and learning. The policy calls for DFC to actively engage key partners in the business ecosystem, connect with relevant international networks, and produce and share knowledge on its methods and experiences in GLI and gender mainstreaming.
Figure 2: DFC’s Commitment to Gender Mainstreaming – Draft GEPAP
Some Issues Ahead
As the GEPAP development work proceeds, a number of next-order issues will need to be addressed:
First, there is political change: In the next 12-18 months, national elections will be held in Belize and, regardless of which of the two main parties is successful, it is certain that there will be a new Prime Minister and Cabinet. It will therefore be necessary for the DFC leadership to brief the new Cabinet on the role of DFC and on the importance of the GEPAP as a tool for financial inclusion and good business.
A second issue involves what could be called the “diversity of diversity.” Some cultural communities in which DFC operates, especially those based in rural areas, maintain highly discriminatory practices that severely restrict women’s ability to access finance and even to participate visibly in the economy outside the home. Yet other cultural communities, such as LGBTQ organizations in urban centres, openly assert the rights of gender-identity minorities. DFC will need to navigate between and within these very different groups and practices.
Third, there is the issue of continuous product improvement. Efforts to create or refine a loan product and its terms and conditions aimed at reducing gender imbalances in the portfolio must be tested and won’t always succeed. The DFC team will need to take an active R&D approach to this work, create rapid feedback loops with customers, and maintain agility and flexibility when the evidence calls for pivoting.
Finally, the GEPAP must be implemented. Senior, middle and lower level employees throughout the DFC network of offices should be positively recognized for achieving key results targets within the three outcome areas of the Gender Policy. And they should be sanctioned or otherwise disciplined if they knowingly ignore or undermine the objectives or principles of the GEPAP.
The road ahead for DFC in its gender mainstreaming effort will not be easy or simple. But that is the case for all acts of leadership. Challenges come with the territory, but so do innovations—and victories.
Conclusion
In using sex-disaggregated data as the basis of deepening their understanding of gender-related barriers and imbalances in the Corporation’s lending, the DFC team has begun to mainstream gender in development finance in Belize in a way that is truly about both women and men. This approach advances human rights and financial inclusion. At the same time, it promises to increase the size and improve the quality of the DFC portfolio. Gender mainstreaming is the right thing to do. It’s also the smart thing to do.
Acknowledgements
The authors thank the following individuals for their advice and assistance: Maria Ziegler, Elizabeth Burges-Sims, Kizzann Lee Sam, Jennifer Jones-Morales, Alex Nolberto, Asad Magana, Beilizario Carballa, Robbin Burns and Trecia Meguel. The work underlying this article was supported by the DFIs Engage in Gender Equality Project of the Caribbean Development Bank and the Development Finance Corporation of Belize.
The Authors
Edward T. Jackson is President of E. T. Jackson and Associates Ltd. (edward_jackson@etjackson.com).
Denise Beaulieu is Senior Associate with Jackson and Associates and a specialist in gender mainstreaming (beaulieu.denise@bell.net).
Natalie Ewing-Goff is General Manager of the Development Finance Corporation of Belize (Natalie.goff@dfcbelize.org).
Aidan Palacio is Gender Champion at the Development Finance Corporation (aidan.palacio@dfcbelize.org).
Version: December 3, 2019