It's easy to criticise business for expanding into developing countries. But if it helps poor and isolated women, is it all bad?
A little-noticed outcome of the microfinance movement has been the proliferation of rural sales networks in developing countries, where poor women earn an income by selling products door-to-door. Usually billed as entrepreneurship, these systems are typically assembled by outside parties such as banks offering microloans or social entrepreneurs selling products deemed prosocial, such as solar lanterns.
Lately, however, large global corporations such as Coca-Cola have stepped into the arena, loudly assuming the task of empowering women, while at the same time quietly extending their own reach into untouched markets. (Yes, there are still places in the world where you can't get a Coke.)
The involvement of multinationals in rural sales networks has elicited a familiar barrage of criticisms. Consider some from a recent Oxford debate: multinationals exploit poverty as a business opportunity, marketing wasteful goods to people who can't afford them. Or, rural sales networks are a smokescreen providing companies with an army of cheap labour. Or, global business is like Pac Man, gobbling up local vendors across rural Asia and Africa through door-to-door sales. We could go on. But the basic argument is this: corporations are evil and their products corrupt the poor; NGOs and governments are the right actors to fight poverty.
When this anti-corporate fundamentalism dominates the dialogue, a key issue is driven underground. Evidence has now unequivocally linked women's equality to better development outcomes. We are dismayed that conditions unique to gender justice – and dramatically manifest in rural sales networks – are so consistently subsumed under this state-versus-market dogma.
We spent five years studying two important women's entrepreneurship networks: JITA, an innovative system built by CARE International in Bangladesh, and the expansion of the 125-year-old behemoth that is Avon Products into South Africa. Both systems offer poor women who have few other income-earning opportunities the chance to make money by selling consumer goods. The results of our JITA research were recently published and our findings on Avon, which have sparked a lively debate, have just been released.
While we would not argue that either of these systems is problem-free, exploring them emphasised for us why it is gender, rather than capitalism, that should be the focus here.
Focusing on women
The radical innovation in microfinance was monetising women. Loan sharks have always made credit available to the poor at astronomical rates. What was new about microfinance was making business loans to women who were subject to exclusionary norms and thus had no capital. Credit essentially mobilised an economically captive population.
Money, being fungible, is dangerous. In both sites we studied, Bangladesh and South Africa, women are profoundly weakened by tradition, and the rates of violence against them are among the highest in the world. Evidence suggests that men would bully women into taking loans from microfinance companies, then expropriate the funds for themselves. When the women wanted to repay the loan, violence often followed.
Deep pockets hold security. Avon is big and stable enough to work without microcredit. They advance inventory on orders, interest free, telling reps to open bank accounts so commissions can be deposited directly. Avon watches the inventory exposure closely so that neither they nor the reps suffer bad debt. The physical and financial vulnerability presented by cash loaned out at high rates is avoided.
Large organisations make powerful allies
In Bangladesh, where female seclusion or purdah is practised, moving beyond the home is a transgression of gender norms. CARE worked directly with community elders to secure approval for the women to work. Both CARE and Avon step in to help provide safety and counselling support. Both advocate on behalf of women with other institutions, such as church and government.
A woman's market is her domain. CARE personnel assembled a basket of goods for women to sell by recruiting multinationals including Unilever, Danone, Bata and Bic. The basket is light enough to take across unpaved terrain, but includes items that vary by volume, weight, purchase cycle, seasonality and appeal. This carefully balanced portfolio minimises market risk, but each woman is free to add anything else she can carry and thinks will sell. Everything from hair ornaments to condoms turns up in these bags. Similarly, Avon provides a variety of goods beyond cosmetics that reps may add as they see fit. Other systems limit saleswomen to items deemed "good for the poor", forcing foreign values and heavy carrying costs on the participants. We further believe that consumer goods strongly identified with the feminine sphere, such as cleansers and cosmetics, are less threatening to the gender norms already being challenged by the earning power and mobility offered to the women.
Sisterhood matters
Both CARE and Avon are dedicated to women's empowerment. Both bring experience and sophistication in gender matters into local situations that are largely hostile to women. Both emphasise solidarity with other females. The networks thus built are, in themselves, consequential institutions.
Women have few structural friends. In both sites, women are significantly constrained by laws, customs, and religious strictures that refuse them property and inheritance rights, alongside basic freedoms and protections. The notion that governments are, by definition, friendly to women simply does not stack up to the facts. Contrary to conventional wisdom, business can be a better ally.
The proof is in the pudding. Both systems have established track records showing they can give significantly disadvantaged women, including those who are illiterate and innumerate, an opportunity to earn an income they can live and rely on. This is no mean achievement. All other criticisms should be measured against it.
Charges currently being levelled against these systems often seem to us hasty and unsuitable for the challenges faced by women. Patriarchy predates capitalism by thousands of years. It has been built, perpetuated and delivered by all institutions, including both business and government. Achieving gender justice will require respect for the particularities of this form of inequality, openness to new solutions and a willingness to accept that the market can empower rather than oppress women.
Linda Scott is DP world chair for entrepreneurship and innovation at the Saïd Business School, University of Oxford.
Catherine Dolan is a lecturer in the marketing, culture, and society programme at the Saïd Business School, University of Oxford.
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