Supporting female empowerment through business training in Peru

Millions of women throughout the developing world rely on self-employment for subsistence. Yet, these businesses are often characterized by low productivity and little growth potential.

While several PEP studies show the strong positive effect of microcredit on women's empowerment, increasing the profitability of women’s microenterprises has become a key strategy for poverty reduction and gender equity. Four projects from Peru specifically investigated the impact of business or technical training on female entrepreneurship.

Training is good for business

Two of these studies found that women who took business training courses increased their business sales. A program offering business training for female microfinance clients led to improvements in business processes, increases in sales, and fewer revenue fluctuations. Similarly, a business development services program (a combination of general training and technical assistance) for female micro entrepreneurs in Lima was found to consistently boost business sales by more than 15%. The researchers found a clear link between the application of businesses practices recommended during the training and increases in revenue.

Business training for microfinance clients also had positive impacts for the microfinance institutions. Clients who followed the program had a higher rate of loan repayment and were more likely to stay with the institution.

Both programs involved intense, formal training and were successful in improving business outcomes. Even so, the effects were not immediately felt. Policymakers and program facilitators therefore need to be patient and allow time for the program impacts to materialize.

Beyond business, training enhances gender equity

Findings from the other two PEP studies suggest that the impact of such training programs goes beyond the strict economic effect of improving business outcomes.

Peru's PROJOVEN market-based training program generally contributes to increasing the productivity of disadvantaged youth. However, according to PEP findings, it is also found to positively affect gender equity. Earnings and employment improvements are greater among women than men following the PROJOVEN program.

Finally, PEP findings indicate that while a peer-to-peer training program in Cañete Province did not have specific impacts on business outcomes, it did improve women’s participation in important economic activities. Women who participated in the program were more likely to be enrolled in local financial markets. They were also much more able and willing to save money using formal and informal schemes. Furthermore, by encouraging women to be more involved in social networks and community affairs, the program helped improve the participants’ social capital.