More indebted, Brazilian women increasingly assume the leadership of their homes
Our blogs highlight a range of consumer issues from different perspectives. Unless otherwise stated they do not represent the position of Consumers International.
GUEST BLOG: Teresa Liporace
As part of our blog series for International Women's Day, we asked inspiring women leaders from the consumer advocacy world to tell us what the day means in their country, and some of the issues for female consumers.
Teresa Liporace, Executive Director of the Brazilian Institute of Consumer Defense (Idec), a member of Consumers International since 1987, talks about the issue of debt for women in Brazil.
The number of women who head households in Brazil has increased in recent years. The latest survey by the Brazilian Institute of Geography and Statistics (IBGE), shows that in 2018 they were responsible for 45% of the 71 million Brazilian homes - an increase of 1.8 million homes compared to 2017. However, the reality of remuneration and opportunities for women in the labor market is still far from being equal to the male situation, which helps to aggravate another worrying situation, the indebtedness of these Brazilian women.
The most recent study by SPC Brazil (Credit Protection Service) on defaulters, also from 2018, shows that out of every 10 debtors, six are women - representing more than 38 million Brazilians. The same survey shows that the most common financial commitments among defaulters are related to the home: the water and electricity bill (57.1%), the installments to be paid by credit card (48.6%), the installment plan (46,5%), landline or cell phone bill (45.6%), pay TV/internet (34.2%), and rent (22%).
What leads to indebtedness
More than a lack of financial control, the indebtedness of women can be associated with several factors: inequality of wages in Brazil, combined with the offer of credit with high interest rates, abusive advertising and lack of financial education for these Brazilians - since this same study by the SPC notes that more than 90% of debtors, including men, belong to classes C, D and E and most of them have not passed the second level of education.
Among the actions that could help reduce the impact of the indebtedness is the promotion of financial education. For over 10 years, Idec (Brazilian Institute of Consumer Defense) has been conducting studies on credit granting and trends of over-indebtedness. Since the beginning, Idec researched on possible causes of this phenomenon and how banks treat over-indebted people. Besides that, the organization was responsible for organizing several lectures in the past years to promote financial education throughout the country. Finally, Idec has run the Fair Finance Guide in Brazil for nine years. Within this project - part of an international network of civil society organizations aiming to strengthen financial institutions' commitment to social, environmental and human rights standards - policies of the most important Brazilian banks were assessed and ranked in more than 10 different themes.
The Institute defends the adoption of effective public policies that make the population aware of their own economies so that everyone can better manage their financial lives. In addition, public policies are needed in order to avoid and solve the over-indebtedness problem, mainly among women.
How equal is Brazil?
According to the IBGE, in 2018, the average salary of women was R$ 2,050 per month, corresponding to 79.5% of men's work income (R$ 2,579). In this sense, promoting financial education is even a greater challenge for workers who still receive lower wages. It is important to note that this difference occurs even when women are better educated.
Such inequality was also evidenced in the latest Global Gender Gap Report 2020, prepared by the World Economic Forum. Among 153 countries analyzed, Brazil ranked 92nd in the global ranking of gender inequality. The report took into account four thematic dimensions: Education, Health and Survival, Economic Participation and Opportunity and Political Empowerment.
In the global analysis of the data, although schooling, health and survival present a scenario closer to parity (96.1% and 95.7%, respectively), an important area of concern is economic participation and opportunity. This is the only dimension in which progress has regressed. Here, the numbers are worrying, with a deteriorating situation forcing gender parity to 57.8%. This figure means that it will take 257 years for women to reach the same economic conditions as men.
When women gain, society gains
It is important to highlight that gender equality does not only mean gain for women, but for society as a whole. A recent World Bank study estimates that gender inequality costs the global economy US$ 160 trillion in terms of losses in human capital wealth. Another survey by the McKinsey Global Institute in 2015 reinforces this point. The text says that if there were equality of women in the labor market, global GDP would earn an average of US$ 12 trillion by 2025. This same report is categorical in stating that “if women - who represent half the population of working age worldwide - do not reach their full economic potential, the global economy as a whole suffers ”.
It is also worth mentioning that the promotion of equality between men and women is one of the SDGs (Sustainable Development Goals) advocated by the United Nations (UN) for the transformation of the world. Besides that, investing in financial education for women is in line with one of the points of the SDG 5 which is “Undertake reforms to give women equal rights to economic resources, as well as access to ownership and control over land and other forms of property, financial services, inheritance and natural resources, in accordance with national laws ”.
In Brazil, where the Federal Government's priority agenda is the resumption of economic growth, it is evident that the development of public policies that promote gender equality must also be seen as fundamental to an improvement in the country's economic and social scenario.