Bridging the micro credit gap for Costa Rica’s women entrepreneurs

Myriam Montenegro started her business ten years ago at the age of 48, selling children’s pyjamas and clothing to friends and acquaintances from her home outside Cartago city in Costa Rica. Her clients would often ask for other items and the entrepreneurial Costa Rican simply replied that she could provide whatever they needed, increasing its product catalogue.  

“They have asked me for school supplies, T-shirts, socks and things they see in magazines, like a cream, a cologne and a shampoo. Whatever the client asks of me, I try to find them. I always try to please the client,” Myriam says. 

She expanded her business to meet the demand, working with her husband and other family members to source and deliver the products. 

Strapped for cash to pay for supplies, she turned to the Asociación Costa Rica Grameen, an Oikocredit partner.  

Group lending to create a social impact  

Founded in 2006 and part of the Grameen Foundation, Asociación Grameen Costa Rica is a non-profit social microfinance organisation that provides women in conditions of economic vulnerability with micro loans to grow or start a business. It uses a group lending model, where social collateral in the form of peer pressure ensures that individuals in the group pay back their loans. 

Myriam learned of Grameen Costa Rica when a group was set up in her village 10 years ago. She joined a second group of borrowers two years later. 

“I started at Grameen with the idea of expanding my business by offering more products. I use the loans to finance buying the products my clients ask for,” Myriam says. Having successfully repaid her first loan of CRC 100,000, (€ 180), she has taken out another, of CRC 675,000 (€ 1,215). 

“The Grameen loans have helped me a lot during times when demand is high… for example around Mother’s and Father’s Day and for Christmas [and] it works out successfully,” she says. 

Now she wants to have her own store, where she can display products and provide better customer service. 

Asociación Grameen Costa Rica and the Grameen Foundation are allied with the Grameen family of organisations, a global microfinance network. The foundation aims to empower women from low-income communities to build lives without poverty and hunger. 

Helping women entrepreneurs to access finance 

Women-owned micro, small and medium enterprises (WSMEs) face an estimated credit gap of US$1.4 to US$ 1.7 trillion, according to the International Finance Corporation. More than 740 million around the world do not have access to financial services, according to the World Bank.  

Costa Rica scores 0.79 on World Economic Forum's gender gap index. This means that women in the country have 21 per cent fewer opportunities than men. 

Empowering women entrepreneurs has been a key plank of Oikocredit’s work since its establishment in 1975. Today, the majority of our partners specifically focus their outreach on women. 

Among them is the Grameen Foundation, which works in 16 anchor countries and an additional 13 partner countries in Africa, Asia and Latin America. 

“Grameen seeks to empower and support women entrepreneurs in areas of social risk, so that they can move forward with their businesses. Not only through credit, but also through advice and training,” says Kristel Sancho, sales manager at Grameen Costa Rica. 

In the central American nation, Grameen Costa Rica provides a broad range of different types of microfinance products. Loans are available for tenures ranging between three months and three years; they top out at CRC 4 million (EUR 7180).  

The non-profit has invested CRC 6,100 million (€ 8.5 million) in Costa Rica’s women entrepreneurs so far, reaching 34,776 clients at 400 centres across the country.  

Kristel says new members come to the non-profit through recommendations from existing community groups and via social media. “We are right now in a growth project at the national level,” she says. “We are expanding the coverage we have at the level of Costa Rica.”  

Grameen’s clients use the loans to create livelihoods for themselves, such as to start or expand small businesses. They use the income from these enterprises to feed their families, pay for school fees and healthcare, and grow their businesses, the non-profit says on its website. 

Growing step by step: María’s story 

María de los Angeles Monjes Segura, 41, from the community of Barrio Nuevo heard about Grameen from her sister-in-law. She started her own Grameen group with women who lived in the area because her sister-in-law’s group was too far away. 

María can be described as a serial entrepreneur. She began working for herself 12 years ago as a hair stylist. When the business grew, she began teaching other women how to cut and style hair. At the same time, she began studying to become a pedicurist and chiropodist. Now she has started a sewing business that she says has become a big success. 

She first took a loan from Grameen 10 years ago. After a break when her son was born, she returned to work, and took out additional loans to expand her business. 

“The Grameen loans have been very helpful,” María says. “I started with a small loan. With it I bought my instruments, the scissors and the hair straightener. After I earned money using those, I took another loan to buy beauty products.”  

The success of her retail business prompted María to enlarge her shop and to invest in training. “The loans helped me to study, to buy and to establish myself,” she says, “For all the endeavours that I have been developing, Grameen has been a great support.” 

Helping women like María build a better life for themselves and their communities is key to Grameen’s work. And for Kristel, outcomes like these are what keeps her coming back to work. 

“Working at Grameen is a place that allows me to see many dreams come true, to see the progress and the changes that they manage to make both personally and at the level of their families. And obviously at the community level. For me it is the greatest satisfaction,” she says. “That's why I feel like this is the place I should be.”