More women take up loans for businesses
Most women who take up micro-finance credit usually venture into agriculture. Photo/JOSEPH KIHERI
More women are now benefiting from micro-financing credit in Africa.
Traditionally, the history of inequality has often assumed that there is a shortage of female business proprietors in the continent.
According to Mr Guido Boysen, chief investment officer of micro-financier GroFin, the trend has changed rapidly.
“Contrary to popular perception, there are more female entrepreneurs in Africa than in the rest of the world,” he said.
Most of micro-finance borrowers are women and they have been a driving force in this sector, with financial institutions committed to empowering them in their communities.
For them, agriculture dominates as the business of choice in many regions of the continent.
However, although the level of women participation in micro-financing has been going up, they are yet to tap into the opportunities available for growth finance.
Growth finance refers to the gap that exists between micro-finance, which tends to cater for informal entrepreneurs needing less than Sh4 million, and commercial banks and private equity, which prefer to capitalise larger companies that require more than Sh80 million.
“Many African businesswomen battle to make the transition from a small (informal) business to a small and medium enterprise (SME). This is due to social factors, and access to finance and expertise,” said Mr Boysen.
Being breadwinners in a number of African households, a great deal of the excess money they make is spent on pressing family expenses, instead of being channelled back into the business.
In some areas, women also battle to find traditional financiers who take them seriously enough to lend them the money they need to shift their business into the next stage of development.
However, GroFin has introduced a business model designed to increase the number of female-owned SMEs.
The facility is structured in line with the cash flow potential of the business and also provides support services to mitigate the risks involved in the venture.
“Our support services are designed to enhance the chances of success of the entrepreneurs we finance,” said Mr Boysen in Nairobi on Tuesday.
