Monday, November 28, 2005

Supporting women entrepreneurs

A joint report by the International Labour Organization and the African Development Bank titled Support for Growth-oriented Women Entrepreneurs in Kenya was released today.

46% of SME’s in Kenya are owned by women who face numerous constraints in establishing and running their business. The goal of the program is to transform women enterprises from being informal and micro-sized, located on inappropriate premises, operating in feminized sectors & and locally restricted markets, and which are under-capitalized, making minimal use of technology – all of which limit their potential for growth. This will be done through tailored financial and other solutions.

In terms of banking and finance, women enterprises are restricted to group savings and micro finance (which yield slow growth). Despite women having high demand for loans and credit, and even though they tend to be better savers and have better loan repayment rates than men, women entrepreneurs are unable to access commercial bank loans. The reasons for this include;
- main problem facing women in Kenya is lack of collateral for borrowing (often is in husband’ name)
- Banks lack confidence in projects owned by women
- Men have bigger ideas and borrow bigger, while women are risk averse and take smaller loans, which are more costly for banks to administer
- Women lack the ability to approach financial intuitions (e.g. management skill, and in some cases education, technical skills or business records that banks require)

Among the recommendations of the report:
- In a pilot program to be implemented in Kenya, the ADB will guarantee up to 50%, loans advanced to women entrepreneurs by a small group of local banks
- Efforts will be made to link micro- finance loan clients to business development services
- A financial guide for women entrepreneurs will be published
- A women’s bank may be established in Kenya to be chaired by the First lady.

PDF’s of the report can be obtained from either the ADB or ILO sites.

7 comments:

Keguro said...
This comment has been removed by a blog administrator.
Keguro said...

Eh, made a silly comment

actually reading the report now

makes sense, though, I'm not sure it's "grassroots" enough. For some reason it feels very top-bottom. Particularly uncomfortable with the video-training and awards section--rewarded for trying to make a living?

Anonymous said...

N'kelele that's some nice insight. Been working with women in various community projects & you can't be far from the truth. Oh & it's 'risk averse'and not 'risk adverse'. Hope this can be trickled down to the aunts and 'cucus' in the rural areas to empower them. Keep this going !

bankelele said...

Keguro: Report is quite good, and they interviewed almost 100 leaders and women entrepreneurs who proposed some of the actions recommnded.

Anonymous: Correction noted

Imnakoya said...

Thanks for comment on Grandiose Parlor; hopefully we'll get see some evaluation data on the effectitiveness of this project and the one I posted (http://grandioseparlor.blogspot.com/2006/06/international-finance-corporation.html).

Anonymous said...

Are there some special women websites for entrepreneurs?

women entrepreneurs said...

Women entrepreneurs in Kenya still have quite a way to go, but it is nice to see that they are able to enter the market.

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