Broad-based economic transformation not only requires stimulating sustainable growth of the economy, but also demands that deliberate policy measures are systematically designed and implemented to create more economic opportunities for women and for the sustainable growth of women-led businesses.
BY CLIVE MPHAMBELA
The population census of 2012 showed that Zimbabwe has a demographic dominance of women-led households, while the Finscope MSME study of 2014 revealed that the country also has a majority of women-led SMEs. It is, therefore, critical for policy interventions to adopt a multi-stakeholder approach to the challenge of financial exclusion, particularly as it has been found to affect women disproportionately.
It is for this reason that the Bankers’ Association of Zimbabwe (BAZ) is responding to calls by the government and the Reserve Bank of Zimbabwe to create a confluence between the entrepreneurship efforts of women and business opportunities. For this to be successful and sustainable in the long run, the BAZ has recognised that its own financial inclusion programme must be aligned to the national financial inclusion strategy whose main pillars are:
Financial Innovation: Banks are taking advantage of new information and communication channels to reach out to the previously excluded segments of the population through agent banking, mobile banking and other electronic banking channels. These channels are being used not only for product and service delivery and support, but also for dissemination of critical information as well as knowledge and data gathering to facilitate future innovations.
Financial Literacy: Enables consumers of financial products and services to be aware of the financial opportunities available to them, empowers and facilitates the making of informed decisions.
Consumer Protection: Promotes greater transparency and minimises information asymmetry between consumers and financial service providers.
Micro Finance: Rolling out suites of products targeted at low-income households and micro, small and medium enterprises.
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The BAZ has identified the following priority areas as opportune for furthering banks’ financial inclusion efforts.
l Micro, small and medium enterprises development
l Cluster financing of organised groups and value chains
l Group lending models
l Women economic empowerment
l Agriculture and rural financing development
l Youth economic eEmpowerment
The BAZ’s financial inclusion thrust is being tailored to be collectively geared for specific gender and youth mainstreaming initiatives that are stylised to: l Increase women’s access to finance and financial resources for business;
l Targeted business management training;
l Entrepreneurship training from primary and secondary school;
l Financial literacy training;
l Promoting Business Linkages (with bigger corporate entities)
l Financial Innovation (creating appropriate value chain financing tools)
The BAZ programme is also prepared to address specific challenges for youths, women and MSMEs in general.
However, women businesses have been identified as a key priority and a number of banks have already seized the opportunity and placed women entrepreneurship at the heart of several new business initiatives. Accordingly, adequately equipping women for business management and growth is an integral part of the BAZ financial inclusion agenda.
There is growing recognition that women indeed form the foundation pillars of any community. Therefore, sustainable community empowerment must focus on women empowerment and business ventures offer such opportunities for durable and lasting broad-based transformation.
Challenges faced by women in accessing financial services
Women in business face acute challenges, which include:
l Access to financial resources;
l Managerial capacity;
l Infrastructure availability — places to safely conduct their businesses;
l Information asymmetry — where to source products, at what price, for which markets;
l Economies of scale — Women led businesses are typically small;
l Availability of utilities at affordable prices affecting the cost of doing business;
l Limited access to traditional property based forms collateral.
Some useful statistics on women and financial inclusion
As of 2014, the World Bank estimated that nearly two billion people, or 38% of adults in the world, had no access to formal financial services, and 73% of the poor were unbanked.
In Zimbabwe, according to the 2014 Finscope Consumer Survey Report, 30% of the adult population are banked and 70% unbanked were unbanked.
Seventy-six percent of the adult population earned $200 per month or less. There is limited scope for savings under these circumstances. It is a provisional reminder of the underlying need to grow the economy and reduce income disparities for sustainable gains in financial inclusion.
It was pleasing to note that 69% of adults now had access to financial services in 2014 as opposed to 38% in 2011. This is largely due to the increase in cellphone banking, debit cards and ATM cash point cards.
According to a survey done by the Global Banking Alliance for Women Network:
l Women are a powerful force in the global economy with significant untapped business potential. By harnessing the immense potential of women in business, financial institutions can achieve a lot of success and reap positive benefits.
l Globally, women make or influence 80% of household buying decisions.
l Seventy-three percent of women globally report being unsatisfied with their banking services.
l Up to 33% of private businesses are owned or operated by women globally
l 80% of women-owned small and medium enterprises with credit needs are unserved or underserved. Sadly most of our rural women entrepreneurs are in the 80% category.
In Zimbabwe, according to the Finscope MSME Survey, the majority of MSME businesses (53%) are led by women.
Investing in women businesses is, therefore, no longer driven by corporate social responsibility, but is firmly recognised as a smart thing and a business imperative for banks. Banks can benefit from the multimillion dollar female economy
Clearly in our Zimbabwean set-up banks can do a lot more to promote financial inclusion of rural women entrepreneurs. The first challenge banks face in assisting this sector emanates from the fact that the project proposals that are presented lack bankability. In trying to assist women entrepreneurs, the banking sector faces several structural barriers which include:
l Lack of bankable credit histories.
l Poor recordkeeping by SMEs.
l Challenges at certain stages of the value chain from inputs supply to marketing of products which make the rural women entrepreneurs’ project unviable and, therefore, unbankable.
l Lack of bankable collateral
l Credit myths moulded around social attitudes
Clive Mphambela is a banker. He writes in his capacity as advocacy officer for the Bankers’ Association of Zimbabwe. BAZ expressly invites all stakeholders to give their valuable comments and feedback related to this article to him on [email protected] or on numbers 04-744686, +263772206913
