How many women in Latin and Central America own a house?

  • Homeownership for women in developing countries is a critical issue, writes Georgina Baker, vice president of the International Finance Corporation.
  • It affects both living conditions and the ability of women to start and develop their own businesses.
  • In Central America, less than 40% of women have access to a bank account and only 6% have taken out a mortgage.
  • Baker explains why this is a problem and what needs to be done to change it.

For people in the developed world, a mortgage is a step towards home ownership. In developing countries, this dream is often elusive – especially for women.

Home ownership for women in developing countries a critical problem: This not only has ramifications on living conditions, but also on the ability of women to create and develop their own businesses. Access to formal credit relies heavily on collateral, namely large assets – a house or an apartment – which women often lack, but which are essential in establishing their credit history. In many cases, women also use their home as the basis of their business.

Central America presents a clear example of this challenge. Less than 40% of women in this region have access to a bank account, and only 6% have taken out a mortgage . In comparison, 16% of women in Colombia and 13% of women in India used formal loans to purchase housing, according to a recent IFC study, Her house – Housing finance for women.

These gender disparities limit women’s financial capacity and opportunities for business growth. Women demonstrate better academic performance and positive traits (such as lower default rates on their bank loans) as bank clients, but unfortunately they remain underserved by the financial sector. Women-owned businesses have less access to commercial loans as they tend to be part of the informal sector and therefore lack the appropriate documentation – for example, proof of income or real estate collateral – needed to access financial services . Central America must break down this obstacle to make its growth more inclusive and continue to reduce inequalities.

With that in mind, IFC (the private sector arm of the World Bank Group), recently launched a new partnership with the World Bank in Panama to launch the very first mortgage product aimed specifically at women. . The aim is to create opportunities that will resolve the two interrelated issues of financing housing for women and supporting women-owned businesses. This initiative will address the fact that women-owned businesses in Panama currently have less access to loans because they lack the real estate collateral that financial institutions need.

Latin America Global economic imbalances Education, gender and work Gender parity

In Colombia, the size of the housing loan market for women is estimated at $ 23 billion.

Image: International Finance Corporation

With one of the largest and most stable financial sectors in the region, this initiative in Panama will show the commercial viability of promoting financial products and services that enable women to become homeowners and use it as a gateway to receive loans to finance their businesses. This could potentially be a solution that developing economies in Latin America and other regions could replicate to expand access to capital for women entrepreneurs.

The financial sector could also benefit, as women’s home ownership is an untapped business opportunity. Despite the barriers women face, there is a strong unmet demand for housing finance for female-headed households, especially in developing countries. . Latest IFC study on women’s access to home ownership– covering Colombia, India and Kenya – confirms that the women’s housing finance market is over $ 70 billion in these three countries alone.

In one of Panama’s neighboring countries, Colombia, the size of the home loan market for women is estimated at $ 23 billion and 49% of women who participated in a survey were planning to buy a house or buy a home. make improvements over the next five years. While women represent half of the population, only a small fraction of them own property. In fact, only 8% of female-headed households in Colombia have applied for a home loan in the past five years.

The World Economic Forum has been measuring gender gaps since 2006 in the annual Global Gender Gap Report.

The Global Gender Gap Report tracks progress in closing the gender gap at the country level. To turn these ideas into concrete actions and national progress, we developed the Closing the Gender Gap Accelerators model for public-private collaboration.

These accelerators were organized in Argentina, Chile, Colombia, Costa Rica, Dominican Republic, Panama and Peru in partnership with the Inter-American Development Bank.

In 2019, Egypt became the first country in the Middle East and Africa to launch a Gender Gap Reduction Accelerator. While more women than men are now enrolled in university, women represent just over a third of professional and technical workers in Egypt. Women in the labor force are also less likely to be paid the same as their male colleagues for equivalent work or to move into managerial positions.

In these countries, CEOs and ministers work together over a three-year period on policies that help to further narrow economic gender gaps in their countries. This includes extended parental leave, subsidized child care, and the removal of unconscious bias in recruitment, retention and promotion practices.

If you are a business in one of the Closing the Gender Gap accelerator countries, you can join the local member base.

If you are a business or government in a country where we currently do not have a Gender Gap Reduction Accelerator, you can contact us to explore options for setting one up.

Colombia is trying to meet this challenge. The country has started to put in place initiatives to offer subsidized interest rates to a low-income segment of the population, which includes households headed by women. In another example, India’s “Housing for All” program, a credit link grant program, provides a grant if a woman is registered as a property.

Latin America is also well positioned to begin adopting innovative housing finance products and services for women. . In this way, the banking industry can tap into a large underserved market and add value to its bottom line while contributing to the growth of the housing sector. The positive impacts could be generalized: for banks, these initiatives help attract and retain women as retail clients, while also supporting women-owned businesses and thus fostering inclusive economic growth. in a reality.


About Matthew Berkey

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