“I think it's important that the banks create more services for women. We are punctual and focused on paying back our loans.”Read more
Martha Sócola Morales (35) runs her own stationery store in Peru, a vital service for the local community. Martha is married and her husband works in the banana plantations. They have two children at primary school.
Martha grew up with two sisters. She had a happy and peaceful childhood, but with periods of difficulty when her father, an agronomist, did not have a job. Martha adds: “During these periods, I only had enough money for the bus to and from school.” As an entrepreneurial young girl in fourth grade, she used to buy sweets in bulk and sell them on to her classmates, so that she too could buy something to eat at recess.
Martha was a good student and was able to go on to study agro-industrial engineering. She paid for her university expenses by selling beauty products, which is what her mother did to maintain the family income when her husband was out of a job. Martha also made money by typing up papers for her classmates. It was this income-generating activity at university that inspired her future enterprise.
Martha explains: “I started the business in my home offering a typing and printing service with my computer, but then I realised that people also needed extra things, like envelopes and pens and other stationery. I also discovered that people wanted a photocopying service. I didn’t have enough money to go and buy a machine like that.”
There was no other place at that time that was offering all these services under one roof and Martha had a clear business vision. She had seen a gap in the market, but she knew she needed a loan to expand her business. In Peru, it is standard practice for financial institutions to credit-check both the husband and the wife when either of them takes out a loan. This practice is meant to be inclusive of women, but if a husband has a pre-existing debt, this can have a negative impact.
“After I got married, that was when the difficulties started. My husband had a pending debt so they denied me the loan and at that point all doors closed to me.”
But Martha did not give up hope and, after doing further research, she discovered a financial institution that offered group loans just for women: “The banks and financial institutions here in Peru have had to adapt to change. Before they only gave loans to men because they had a stable job and they could deduct from the payroll. But now women are entering the business environment. Now there are institutions that only give loans to women because they believe that women are more responsible than men at repaying loans. We are punctual and focused on paying back our loans.”
The requirements set by the financial institution offering group loans were far less, with no guarantee or collateral needed. Martha is now in a group with eighteen other women, with each of them receiving different levels of loans for their individual businesses. However, a disadvantage of this system is that if one member does not repay on time it affects the whole group. Finding responsible members is therefore vital. “We all repay our loans every 14 days at a low interest rate. We get a lower rate because we repay over a shorter time period, compared to the banks.”
Martha received training in business management through CARE’s Women in Enterprise programme, supported by H&M Foundation, which she has applied to both her stationery business and other income-generating activities.
Having grown her business and benefited from a loan herself, Martha is now looking to help others in a similar way. The start of the school year is a very expensive time for parents in Peru as the schools provide a lengthy list of items that the children need to bring. Many people find it difficult to manage all these costs, particularly those working in agriculture, which is the main employment locally.
“I try to support the families that come to my shop by providing them with credit. We then agree repayment terms, and of course I add a little percentage for my loan. I help people in this way because there is no other business locally that offers these kind of services. I am a mother too, I have had moments before when I couldn’t afford all these things.”
“I think the economic role of women in the family is very important nowadays. If we are also providing an income and not just relying on the man, we can provide a better quality of life for our children. We can transfer the skills we have from stretching the family income into running businesses. We won’t go bankrupt, that is the nature of women.”
Martha often has banks approaching her offering loans, but when she looks at the small print they usually ask for the title deeds to the home or land, which many women in Peru do not have.
Martha’s advice for the financial institutions is clear: “I think it’s important for banks to create more services for women. We are more responsible with our payments, can manage money well and repay promptly. We have a lot of ideas in our heads but often we cannot bring them to fruition because we lack the financial means. And apart from helping us, behind us they are helping a whole family.”
As for the future, Martha wants her business to grow and is always trying to adapt her business to meet her customers’ needs. “Little by little my business is progressing and I hope it will continue to grow.”