Financing women investors makes good business cents

A Kenya Women Finance Trust official in a training session with members of a business club popularly known as ‘chama’. Educating and funding women entrepreneurs not only empower the family but also the nation. File 

By CAROL MUSYOKA

Posted  Sunday, February 24  2013 at  16:34

In Summary

• Supporting start-ups run by female entrepreneurs has positive impact on society.

Following her husband’s death, his relatives claimed all his assets, throwing her out of their home with only her children and one cow to keep.

Traditional custom dictated that women had no claim on land or property and widows were expected to fend for themselves.

Not to take challenges lying down, she began leasing out the cow to neighbours who needed milk as she did not have any funds or property to use as collateral to start a business.

Slowly but steadily she began to get a regular income which she channelled into a microfinance institution aimed at empowering widows and girls to build up income generating asset bases.

That is how in 2002 Dr Victoria Kisyombe began Selfina, a microfinance institution in Tanzania that specialises in micro leasing.

By providing loans to women to buy anything from agricultural power tillers, animal feed mixers, catering equipment, tailoring and office equipment such as computers and photocopiers, Selfina empowered women to acquire assets without a history of credit, little or no financial literacy and absolutely no collateral.

The two critical elements in the Selfina proposition are financial empowerment and dignity to the woman. I learnt about this organisation at a workshop in Dar es Salaam last week that put together banks providing women specific product offerings as well as women entrepreneurs. I came away with one validation that I have previously written about.

Customers talk, talk and talk. Bankers selectively hear what they want and deliver what they can. There were brilliant presentations from many banks around the world that are taking women’s banking seriously.

Royal Bank of Scotland, for example, through its Emerging Innovations team, provides bespoke financial solutions to its female entrepreneur clients.

By understanding that the key to a successful borrower is financial literacy in the first instance, they provide business training to would be borrowers.

They also provide loans to several start-up businesses for women, despite the fact that one in every five start-ups collapse in the first 18 months.

When a start-up potential borrower passes the business training she then qualifies for a business loan as she has been educated on how to manage financial accounts as well as the lifeblood of any business — cash flow.

As a result 21 per cent of the portfolio income comes from start-up businesses whose success is also wind assisted by the bank’s online portal that showcases the borrower’s products and provides linkages to potential buyers.

There were several case studies from around the world’s developing economies such as Lebanon, Turkey, Kenya and Tanzania all of which came to four key elements required for a successful women’s banking proposition.

The bank should provide access to finance through unbiased loan decisions, access to information through financial education to its female borrowers and deeper product understanding, access to markets through linkages to buyers and finally access to networking where peer-to-peer collaboration and mentoring programmes are well embedded.