The Bolivarian Response to the Feminization of Poverty in Venezuela

Venezuela's Women’s Development Bank (Banco de la Mujer) tries to make up for the uneven playing field between men and women by empowering women economically, politically, and socially. As a social development bank, it offers two kinds of services: financial and non-financial.

By Sarah Wagner – Venezuelanalysis.com
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For part 1 of Women in Bolivarian Venezuela, see: Women and Venezuela’s Bolivarian Revolution

“We know that the situation of inequality is of course a world-wide problem and we know that women have been discriminated in all ambits of their lives, politically, socially, and economically.  The poorest people are always women. They are in charge of their families.  They have to be both the mother and the father…In order to tackle poverty, underemployment and unemployment we have to direct policies towards women…in Venezuela we are doing that through the Development Bank for Women.”

—Nora Castañeda, President of the Women’s Development Bank.

Over the past several decades, governments, in both developed and developing countries, have half-heartedly addressed the monumental problem of gender inequality by focusing on generating legislation aimed at promoting the participation of women in government, implementing affirmative action policies and drafting and approving gender-sensitive legislation. Yet these legal and institutional changes, though undoubtedly necessary in order to lay the groundwork for the transformation of society, are but the first step. It has become apparent, due to the relatively recent recognition of an age-old phenomenon referred to as “the feminization of poverty,” that efforts must be considerably expanded.  More than merely a political panacea of legislative band aids, addressing the problem will require the embracement of a holistic approach based on social and economic strategies.

The Venezuelan Women's Movement

Since Venezuelan women embarked on the quest for gender equality, they have faced a series of political, legal, social, and economic obstacles.  Efforts to organize a women's movement across class lines were impeded by the partisan rivalry between the dominant political parties of the 4th Republic: the social-democratic Acción Democrática and the social-Christian COPEI.  Additionally, a strong tradition of machismo combined with discriminatory penal, civil, and labor laws to hinder efforts to move beyond legal enfranchisement[1] and obstructed women from creating a gender inclusive democracy. 

The changing international climate favorable to feminism and the tripling of fiscal revenue between 1972 and 1975 due to the Venezuelan oil boom contributed to the creation of a state entity for women and the enactment of a number of legal measures that favored women. Yet in spite of this substantial legal progress, in terms of developing and implementing policies and laws aimed towards increasing awareness of women's issues, gender inequality has been only superficially addressed.  Venezuelan women have remained marginalized politically, exploited economically, and have made little, if in any progress in transforming societal norms.

With the arrival of the Chavez to the presidency in 1998, Venezuela broke apart its old democratic order, so as to create a more democratic society in which the rights of citizens are considered to be more than political.  The Bolivarian project has dedicated itself to analyzing both the causes that have thus far impeded a society built on social justice and equality and to working towards a possible solution that address the country’s economic and social complexities.  Following this vision, the way that a number of problems in society, including women's poverty, are approached no longer focuses only on legislation, but also on tangible solutions.[2]  While the success of these efforts remains to be fully measured, it is certain that legislation alone is not capable of eradicating poverty.

Why a Bank for Women?

According to studies carried out by the United Nations, a disproportionate percentage of women, estimated at upwards of 70% worldwide, live in poverty.  Chávez and several other Heads of State have committed to the millennium development goals, including cutting poverty in half by 2015.  Unlike previous administrations that merely allotted women a symbolic entity or ministry in government, Chávez has taken into account the severity and complexity of the feminization of poverty and has made a concerted effort to implement holistic policies towards this sector of the population. Perhaps the most salient, as well as successful example of these solutions, is the creation of the Women’s Development Bank (Banco de la Mujer or Banmujer) on March 8th, 2001. 

“Today we have a special situation,” notes Loryan Cazadilla, of Banmujer, emphasizing that the creation of Banmujer was contingent upon Chávez's initiatives. “We have a president with a very progressive mentality, who is open minded, sensitive, and understands the situation of women. We did not have this before in Venezuela.  Now we are uniting the fight of women from the 1960s with this President, which has resulted in the creation of Banco de la Mujer."

Women in the Work Force

Before elaborating on the vision of the Bank, it is worthwhile to take a closer look at the evolution of Venezuelan women in the labor force.  In 2002, the most recent year for which statistics are available, one is able to observe a considerable growth of women in the labor force from only twelve years prior, while the number of men in the labor force has remained more or less constant. 

Evolution of the Incorporation of Women into the Workforce 1990-2002

Men Employed

Women Employed

Men Unemployed

Women Unemployed

1990

80.6%

35.6%

11.6%

9.2%

1996

89.5%

43.3%

10.5%

16.2%

2002

85.6%

81.2%

14.4%

18.8%

Table 1: Source: National Institute for Women, “Plan for Equality for Women” 2004-2009. (Statistics include formal and informal sectors).

While this incorporation of women is a vast improvement from the 1960s, when only 25% of women were in the labor force,[3] it is important to analyze the types of jobs that women occupy. According to the Ministry of Labor, about 50% of the Venezuelan workforce is employed in the informal sector. Women have come to dominate this sector, with lower-paying jobs, no benefits, and poor working conditions.

In 1990 only 19.2% of all women (employed or unemployed) worked in the informal sector, in comparison with 24.8% of men employed there.  By 1998, 35% of women were working in the informal sector, while the percentage of men had increased slightly to 28.2%.[4] In addition, government initiatives created to reduce unemployment, such as public works projects based on construction, by and large employ far more men than women, cautions president of the National Institute for Women María León.

Humane and Social Development Privileging Women: Financial Services

The Women’s Development Bank tries to make up for this uneven playing field by empowering women economically, politically, and socially.  As a social development bank, it offers two kinds of services: financial and non-financial.

The financial services consist of low-interest loans called micro-credits, consultancy in forming and developing projects, administrative training, and follow-up on the investments. By providing women with the financial capacity and training to start their own small, community businesses and earn their own money, as well as the resources necessary to take control of their lives, the Bank is promoting a new concept of humane and social development privileging women.

In 2001, Chávez appointed women’s rights activist and economist at the Central University of Venezuela (UCV) Nora Castañeda as president of Banmujer.  In addition to her instrumental role in drafting the new Venezuelan Constitution, Castañeda has an extensive history working with grassroots women’s organizations, domestic violence, and gender-sensitive economic reforms.

According to Castañeda, the Women’s Bank is “committed to sustainable humane development that transcends economics…we have undertaken a multi-dimensional processes that aspire to raise the standard of living for women and their families and for posterity. By empowering women to exercise their rights and duties as citizens we hope to create social justice and peace as envisioned in our Constitution.”

Women studying the new Constitution of 1999 in a workshop given by Banmujer.
Credit: Inamujer

Not only is the vision of Banmujer distinct from other banks, but it is also organized differently. Instead of having branch offices, Banmujer depends on a network of promoters that visit the 149 most impoverished and densely populated communities on a weekly basis, in order to personally offer the services of the bank to underprivileged women.   Loryan Calzadilla compares this network of promoters to the spinal chord of the bank. “The promoters work from day to night, Sunday to Saturday. Without them, we could not reach the population. They are in the hills, in the poorest neighborhoods, in the communities, in the Amazon, and with the indigenous.”

During the initial community visit, the promoter informs the women that Banmujer is based on the concept of a "popular economy," in other words, on an economy that benefits everyone.  The promoter then proceeds to outline the requirements the women must fulfill in order to become a user of the bank.  For example, the women must form a group of between 5 and 10 people and decide what kind of business they will undertake.

“We don’t give the women projects,” says Sonia Hernandez, of Banmujer.  “The women think of their own projects.  They are oriented, guided by us.  Of course it is difficult for a woman who has little schooling, who has never gone to university to start even with the basic points of creating a business,” concedes Hernandez.  “Some of them do not even know how to read and write.  If that is the case, then a daughter or a friend or a business partner does it for her until she learns.  But the Bank does not do that.  The idea is that the person learns to be self-sufficient.  When we detect these cases we send these women to Mission Robinson [the government’s literacy campaign], so that they learn to read and write.”

The promoters fulfill the following three obligations. First, they assist and orient the women in designing economically viable projects, select potential users and determine whether their projects are appropriate and compatible with their situations and the vision of the Bank.  After assisting the women through the application process, a potential user's information is passed on to a committee that evaluates it and determines the amount of credit allotted to each one.  Second, upon approval of the projects, the promoters create cooperatives in which each user is given a personal account within her group.  Each cooperative must then complete extensive training on how to manage their business.  This training takes place onsite, in each community, and not in the bank.  Finally, they follow up on the recuperation of the credits until the loan is paid off.

Zoraída Rojas, a tailor from Coro on Venezuela’s northwestern coast notes, “This is the first time I have ever had the opportunity to apply for a loan.  I was granted 500,000 bolívares (about 250 dollars).  With this money, I was able to buy additional cloth to make more dresses and I earned 1 million 400 Bolívares.”

Dealing with Women's Poverty Must be Central to Any Economy

Banmujer’s micro-credits are most frequently given in sums between 500,000 and 1,000,000 bolívares (about US$260-520) per woman, with a 12% annual interest rate or a 6% annual interest rate for agriculture businesses.  Women as individuals are not able to apply for a loan.  They must form a cooperative of 5 to 20 women and work together in solidarity, with a humanistic perspective.  As Sonia Hernandez notes, “[the cooperatives] don't exploit other people.  We are not creating women who will exploit other women. We want everyone to live and work together, in solidarity.”

Although the women do earn money, reinvest in their businesses and pay back their loans, this is a reciprocal agreement in that it simultaneously benefits the community because the cooperatives are required to sell their products at prices in solidarity with the rest of the community. In this way the community receives investments and revenue.  When this loan is paid off, the women have the option of reapplying for an additional loan for 50% of the original amount loaned.

“If the Bank gives money to only one woman, who am I helping?  I am helping you and your family.  But if we give money to 5 or 9 or 12 women in addition helping 5 or 9 or 12 women and their families develop, we are helping the community to develop,” notes Loryan Cazadilla, adding “We had a lot of problems with that at the beginning.  Many women say, ‘No, that women is not going to pay or that woman is not going to participate,’” continues Cazadilla.  “This is due to this mentality of individualism that we have conditioned in this country. This mentality of fear, of selfishness, is what we are trying to eradicate with the cooperatives. This idea of working in solidarity comes from Chávez, from his desire to change the capitalist model. We know that in order to change individualism we have to change our values.  The first value that we are working on is solidarity.”

Although men are permitted to participate in cooperatives formed and led by women, they may not apply for loans individually.  “In order to arrive at equilibrium between men and women we have to raise the status of the women, as well as their self esteem,” emphasizes Loryan Cazadilla.  Accordingly, only 4% of Banmujer loans go to men.

A Different Kind of Bank – Non Financial Services

“When was there ever a bank that gives workshops for women?” asks Loryan Cazadilla, rhetorically.  “Banks give money. The Women’s Bank has taken on an active, progressive role in our country.”  In addition to incorporating a gender-sensitive perspective in its financial transactions and stimulating local economic development by granting access to loans and generating employment, Banmujer allots equal importance to integral development of its users and their families.  This is achieved through non-financial services designed to empower women, both politically and socially. Therefore, the organization fulfills the dual objective of reducing the number of women in poverty and improving the overall quality of their lives. “The vision of this bank is not economic.  It is social,” notes Loryan Calzadilla.  “If we don’t develop consciousness in these women, they will only earn money and spend it.  But they stay the same person.  However, we work with ‘the social’ as well, and therefore these women develop integrally.”

In order to accomplish this, the Bank provides workshops on personal development and the gender perspective, as well as ongoing assistance and training to its users in managing their health and self esteem on a weekly basis. These workshops also consist in educating the users how to prevent and report all forms of discrimination and domestic violence. The promoters give workshops on rights and responsibilities as citizens to stimulate the participation of women in politics.  Specifically, the Bank focuses on women's rights as stipulated in the Constitution and outlined in international treaties.  Loryan Calzadilla clarifies, “we are also trying to achieve the empowerment of women, the participation of women. Progress is not only about economics.  We don’t want to create women with money but who are not healthy, or independent.  We want to create women who are not battered or who know how to escape this situation and who ideally work together with their partner.”

"Progress is not only about economics"

The Women's Development Bank recognizes that in order to achieve gender equality basic needs, such as affordable healthcare and a stable well-paying job must be met. Also, opportunities in education must be equally available to both sexes. According to retired teacher and advisor to the Venezuelan Minister of Education, María Chirinos, education is the only factor that can ensure social change, social mobility and social transformation. "Although we have been given political rights, we still lack social rights.  Although we have a petroleum country, 80% of our country is poor and does not have access to a decent paying job or education.  A country can not have a democracy when there are no social rights…Venezuela is trying to improve these conditions.  We are trying to provide high quality, free education that would be obligatory up to and including university… Education is the only factor that can transform the social and economic reality of a country.” 

The Women's Development Bank also gives workshops in sexual and reproductive rights which focus on family planning and sexual health. In addition to educating women, Banmujer works in cooperation with the Ministry of Heath and Barrio Adentro (community health clinics with Cuban doctors located in poor neighborhoods) to guarantee that the sexual and reproductive rights outlined in the Constitution (Articles 75-77) are fulfilled. Together, these three organizations develop policies oriented to raising the quality of life and the quality of health by ensuring that women have access to free medical services, appointments, and contraceptives throughout the country.

“The women that never went to school because they did not have the opportunity to study, let alone go to university, they are the protagonists,” says Cazadilla.  “We are working primarily with this kind of women, the most humble, the simplest.  Those who have never had anything, not even the opportunity to study or to choose how many children they want to have—these are opportunities that the State should provide for the population,” Cazadilla argues.  “Before Chávez there was no family planning policy; women were never given information about their sexuality.  A woman who is 15 years old would start to get pregnant and would keep getting pregnant.  Our services are for them.”

A workshop on sexual health and reproductive rights given by Banmujer.
Credit: Inamujer

With the gradual privatization of health care in the 1990s, basic checkups now cost upwards of US$20, the vast majority of the country was unable to afford medical attention, and no strategy was in the works to re-incorporate the impoverished into the healthcare system.  This exclusive access to healthcare changed with the establishment of Barrio Adentro,[5] a program in which over 15,000 Cuban and 800 Venezuelan doctors have set up free clinics in rural and impoverished areas.  Since its onset in 2003, over 43 million visits have been registered.

Breaking the Cycle of Women's Poverty

Since its inception in 2001, the Women's Development Bank has granted over 40,000 micro-credits to women all over Venezuela and has generated over 75,000 jobs, thus allowing women to successfully assert themselves in their respective localities economically. The Head of the Area of Technical Assistance and support to Micro businesses, Yris Martín notes, “After two years of functioning, Banmujer has achieved a reputation as a serious and responsible institution among cooperatives.”

Yet according to a report published by Sudeban (the supervisory body of Venezuelan banks), 41.57% of credits loaned in the first year of Banmujer were not repaid.  By industry standards, the bank has been a colossal failure.  Ideally, loans are supposed to develop women’s capacities to run a successful business, pay off their loans, and earn enough money to pull themselves out of poverty. But as we have seen Banmujer’s mission is not a purely economic one.  According to Loryan Casteñeda, “We work for the principle of humanitarianism, not capitalism. Capitalism looks at a person like an instrument that generates wealth.”  In a socially oriented economy, notes Castañeda, “the economy serves the people instead of the people serving the economy.”  Yet the bank is in a bind, because Venezuela does not yet operate in a social economy.  Balancing economic viability and constructive social investment is likely to be the banks biggest challenge.  As a start, one strategy for decreasing the default rate would be a more comprehensive follow-up on existing loans.  The bank does not presently collect detailed statistics on bad loans. However, this information is essential in order to determine why certain projects failed, for Banmujer—and the women they train—to learn from their mistakes and improve their success rate over time.

Yet the Bank's greatest achievements are not economic; but rather, social and cultural.  Banmujer reflects the treatment of gender inequality as a monumental problem, worthy of unqualified attention.  More broadly, Banmujer’s policies aim to change how women are viewed in society and how they view themselves—striking the root of gender inequality.

The Venezuelan women's movement and the Bolivarian government have scrutinized specific factors that elucidate gender inequality in society as elaborated in national and international forums, beginning with the five Women's Conferences held by the United Nations from 1975-1995.  They have also incorporated conclusions drawn by the National Institute for Women (Inamujer), which emphasize three fundamental components in the factors that contribute to the feminization of poverty and that provides a starting point to develop solutions to resolve the crisis.

1. Social and human reproduction. Women do not have sufficient control over their bodies and their sexuality to fully take control over their lives.

2. The gender division in employment. Traditionally men have been associated with strength, security and authority, while women have been delegated the role of being docile, delicate, submissive and fertile. Due to the identification of females with reproduction and domestic chores, women in the workforce are considered complimentary to men, therefore underpaid and undervalued. 

3. Power relations – along with class, ethnicity and race, gender relations explain who has access to resources, jobs, education: in essence power (the ability to make decisions).

Particularly influenced by this analysis, as well as the 4th worldwide Conference for Women held in Beijing in 1995, in which the 198 participating countries concluded that governments and civil society must adopt holistic policies that address the feminization of poverty not only politically, but also economically and socially, they created Banmujer. Together the Bolivarian government and Banmujer have implemented specific policies and programs that address the following spheres: women in poverty, education and training of women, healthcare, violence against women, the participation of women in politics, women’s human rights, and women and the economy.

By analyzing the specific factors that shed light on explaining the intensification of the phenomenon of the feminization of poverty, the Bolivarian project has taken the first step towards designing and implementing specific policies in Venezuela to remedy this imbalance. With the creation of a micro-finance system that allows money to arrive to traditionally excluded sectors, Banmujer is empowering women as well as creating a sense of ownership and gender consciousness in the process. In essence, the democratization of capital is a fundamental tool in the fight against the feminization of poverty.  

“Micro credits empower women… We are creating a caring economy, an economy at the service of human beings, not human beings at the service of the economy,” argues Banmujer President Nora Castañeda.  “We are not building a bank.  We are building a different way of life.”


[1] Venezuelan women attained the right to vote in 1947.

[2] Over the course of the past 5 years, the Venezuelan women's movement has made significant progress.  They have achieved one of the most progressive constitutions in the world, often referred to as a non-sexist Magna Carta, created the National Institute for Women, and have been instrumental in making significant and rapid progress in creating NGOs, increasing their representation in politics, and defending their democracy. 

[3] El Nacional, 11-23-1998.

[5] Cuba assists with Venezuela’s healthcare and literacy programs in exchange for preferential prices for oil.  Cuba receives over 53,000 barrels of oil daily.  Almost two thousand Venezuelans are currently studying medicine in the Latin American School for Medicine in Havana. 

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