Empowering African Businesses

Kenya’s women entrepreneurs mean business – but they need financial backing

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By Steve Umidha

In more recent times, it used to be that the business setting was a man’s turf. Times are changing, and they are changing so fast!

Today, our women are exerting more and more supremacy and are now beginning to do something that’s been a male attribute for decades – taking business risks, albeit the number of those taking risks is still low.

Men are wired to be risk takers, and they make decisions swiftly. Sometimes it’s not always the right decision, but it is a decision nonetheless, while women on the other hand, tend to scrutinize, think things through, weigh all the elements, and then make a decision.

As difficult as it is for small business owners to access finance in general, women entrepreneurs in Kenya continue to face some of the harshest challenges – including lack of suitable bank products and the fact that local banks are still skeptical in funding majority of women-owned businesses.

Even the title, “woman-owned business,” denotes the minority status of female entrepreneurship. You hardly hear the corresponding, “man-owned business” principally because it’s more common and expected.

On the supply side, local banks sometimes avoid serving women-led businesses as they perceive them to be high-risk borrowers who are ‘tricky’ to serve, as opposed to their male counterparts.

And very often, banks do not develop products that meet the needs of women; rather these banks offer products with high interest rates and collateral requirements – something financial institutions will need to advance on if they are genuine in their quest to empowering women entrepreneurs – whose inability to raise funds holds back growth.

Financial inclusion was the immense theme at this year’s annual Women Entrepreneurship and Networking Workshop dubbed Financial Management which was held in April in Nairobi and hosted by Gulf African Bank (GAB), an acknowledgement that those women entrepreneurs are a force to reckon with today.

According to a recent research by World Bank’s financial arm, International Finance Corporation (IFC), an astounding 39 percent of Kenya’s 134,000 formal small and medium enterprises are owned by women.  Despite the growing numbers, women continue to face numerous challenges when it comes to financial inclusion compared to male counterparts.

As the Head of Women Banking at Gulf African Bank Ms. Najma Jabri recognized before the forum’s proceedings, the bank had got it right in Kenya – although as one bank official pointed out, most local banks were on course to developing incentives for women in terms of products and infrastructure, but there’s an existing huge gap to be filled.

“Women are more demanding and they need a lot from banks,” says Najma during an interview at the bank’s head office in Upperhill, Nairobi.

In a candid tête-à-tête with Ms. Jabri, GAB’s Manager – Women Banking (Annisaa) for six years now, the soft-spoken lady reckons that three major things continue to stand in the way for women entrepreneurs’ success.

“A major hindrance to access to finance is that women lack tangible collateral, like when you look at land in Kenya today you’ll find that only one percent is owned by women.

What we have done at GAB for instance, we have a special product for women in business whereby the collateral is ‘soft’ collateral like cluster items such as jewelry and we guarantee them up to Ksh1.5million with soft collateral. We are also the first bank to allow jewelry as security for accessing finances,” she says.

Although women can function well without a brick and mortar facility, Najma says the fact that they have no collateral is proving to be a huge problem for most bankers.

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Other challenges women entrepreneurs still face include the numerous obstacles in securing start-up financing, working capital or growth funding, with many at a disadvantage when seeking financing from banks.

Similarly, a lot of women executives also lack confidence in their business acumen and are intimidated by their male counterparts, according to Ms. Najma, but that ‘fear,’ she believes is being loosened by some of the initiatives GAB has had to employ in its operations as it seeks to break the barrier.

Insufficient information on finance and record keeping are other stumbling blocks facing these women, according to Ms. Jabri.

Najma says, often women have little experience in the process or documentation needed to secure an investment, and while they may be passionate about their concept, they often lack a clear business plan.

“The bank expects you to have good records, cash flow analysis and business projections. Basically what we’ve done, the workshop addresses those challenges, we are trying to enhance capacity for women in order for them to understand what it takes to be eligible for bank loans,” she says.

Even before the workshop, Najma says the bank had managed to address some of those concerns. GAB had identified the most important factors that encourage women to put aside their fears and start a business.

Presently Gulf African bank is the only local lender that has only-women bank branches dedicated specifically for women, an initiative she says was put together in 2012 when the bank’s first branch opened in Eastleigh. The initial aim was to cater for unbanked population in that area.

“We have women champions in all our branches to make women feel comfortable.  We noticed a lot of them were shying away from asking even the most of basic questions, and with time the barrier was getting broken,” she says.

Najma says the bank is also in the process of coming up with new exciting initiatives aimed at working to foster these relationships and allow women executives to expand their enterprises.

“We have a lot of products in the offing so watch this space,” she says.

Additionally, the bank has rolled out similar initiatives in other towns like Mombasa and most parts of North Eastern region targeting women entrepreneurs that have been locked out of financial inclusion for years.

A lot of female executives are familiar with the obstacles and are choosing alternative resources, she says. Peer-to-peer financing, locally referred to as chamas and government assistance programs like Uwezo fund (loosely translated as ability) among other programs have come to the rescue for many new start-ups that are women-led.

Even when there are no legal barriers to starting a business, courage is still required and women entrepreneurs will need to have courage. Yet, even among entrepreneurs, there is a gender gap in confidence and women are often more afraid of failure.

Ultimately, every impoverished woman who manages against all odds to become a successful entrepreneur is heroic.




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