Soi Cate Chelang, a self-taught palette seat designer and carpenter, hard at work. She says that even after a decade of running her business she is unable to get bank credit to expand. Her situation is not a unique one in Africa. Credit: Miriam Gathigah/IPS

By Miriam Gathigah
NAIROBI, Jan 22 2020 (IPS)

What stands between Soi Cate Chelang and her dream of turning her small pallet-making business into a major enterprise is capital.

In Kenya, Chelang may well be a pioneer in making seats out of wooden pallets — the flat pieces of wood used to support goods or containers during shipping.

While she has no formal training in carpentry, Chelang tells IPS that she comes from a long line of carpenters, having trained under her grandfather and uncle. And what she doesn’t know, she learns from online lessons on carpentry.

She started the business more than a decade ago — before anyone else was doing it — and her products have been popular with consumers.

“My designs stand out because I combine many different elements. It is not just about turning wood into a seat. I use colourful fabrics and female clients enjoy fabrics that brighten their homes. I also make kids furniture from pallets and use fabric that have popular cartoons on them,” she expounds. Chelang sells her three-seater household pallet sofa for 100 to 300 dollars, depending on the design and material used.

Clients seek her services through her social media pages where she markets her products under the name Soi Pallet Designs.

Not enough credit to grow

But the 35-year-old is worried that the opportunity to cash in on her unique designs is passing her by.

“I do not have the money to set up a proper workshop and showroom. I cannot apply for contracts to make pallet seats for major entertainment clubs in the city because I do not have capital to finance such big orders,” she says, explaining that such clubs are interested in her designs.

“I managed to take one order of 5,000 dollars in 2018 because one of my mentors provided me with the capital to finance the order,” she says.

But that was a once-off. Because without collateral, she says, the banks will grant her a business loan. So for now she has to make seats to order. Even in this instance her clients must first pay 30 to 50 percent of the total cost to enable her to purchase materials and pay for some of her labour costs.

“I work with three carpenters who I pay on a daily basis. We only take one order at a time because I do not have a proper workshop and I cannot afford to hire more carpenters,” Chelang expounds.

The circumstances have served to confine her business to her home in Kisumu City some 350 kilometres away from Kenya’s capital Nairobi.

Traditional credit not available for African women 

But Chelang’s inability to expand her business is not a new story. According to the MasterCard Index of Women Entrepreneurs 2017, a lack of capital is one of the major challenges facing women doing business in Africa today, especially in sub-Saharan Africa.  

This is despite data by the Global Entrepreneurship Monitor (GEM) report of 2017-18 showing that sub-Saharan Africa has taken the lead as the only region where women form the majority of self-employed individuals. 

• According to the report, globally, Africa has the most positive attitudes towards entrepreneurship as 76 percent of working age adults consider entrepreneurship a good career choice, while another 75 percent believe that entrepreneurs are admired in their societies.
• Over the last decade, the number of women joining entrepreneurship is on a steady rise, the GEM report states. Women are high-technology developers in Kenya or, like Chelang, are making waves in the informal sector.
• Female entrepreneurs are also in the steel manufacturing business in South Africa, and in the cocoa agro-processing businesses in Ivory Coast and the larger West African region.
• Even more impressive, the MasterCard Index of Women Entrepreneurs 2017 indicates that Uganda and Botswana have the highest percentage of women entrepreneurs globally. Other countries in this league include Kenya, Ghana, Nigeria and Zambia.

Women in entrepreneurship stand to gain from the African Development Bank’s affirmative action financing. Credit: Miriam Gathigah/IPS

Setting up lasting financial structures to benefit Africa’s women

Aware of the financial constraints facing women in business, the African Development Bank (AfDB) is making concerted efforts to address the widening financing gap between male and female entrepreneurs in Africa.

The pan-African bank has placed the financing gap between male and female entrepreneurs across Africa, at a whopping 42 billion dollars.

To address this gap, the African Heads of State launched the Affirmative Finance Action for Women in Africa (AFAWA) programme back in 2016. 

• As a joint pan-African initiative between AfDB and the African Guarantee Fund, AFAWA is a risk-sharing facility that will de-risk lending to women-owned and women-led businesses.
• During the most recent Global Gender Summit held in Kigali in 2019, AFAWA was officially launched in Rwanda. The affirmative action programme received a one-million-dollar commitment from the Rwandese government. Still in 2019, G7 leaders approved a package totalling 251 million dollars in support of AFAWA.
• Additionally, Attijariwafa Bank, a Moroccan multinational commercial bank, and the African Guarantee Fund have signed a 50 million dollar Memorandum of Understanding towards risk lending to women through partial guarantees.

By using a holistic approach, this affirmative action programme will address the major factors preventing women in Africa, including the access of financial products and services such as loans. Consequently these financial services will also be accessible and affordable as well.

AFAWA finance will unlock three billion dollars in credit for women in businesses and enterprises in Africa. Towards this goal, this programme will work with existing commercial banks and microfinance institutions to engineer lasting structural changes, to the benefit of women across the continent.

Further, there will be a rating system to evaluate financial institutions based on the extent to which they lend to women, and the consequent socio-economic impact. Top institutions will receive preferential terms from the pan-African bank.

Sustainable, women-owned businesses will contribute to the economy

Financial experts such as Irene Omari say the AFAWA is important for women’s financial inclusion. A banker and leading entrepreneur in the Lakeside City of Kisumu, Omari tells IPS that “banks do not take female entrepreneurs seriously. Banks are still a long way from embracing women doing business. We are still considered very high risk by financial institutions because we lack collateral”.

As the sole proprietor of Top Strategy Achievers Limited, a multi-million-shilling branding and printing company, she is all too familiar with the financial challenges facing women in business today.

“I started working at 23 years old in the hospitality industry. I would also act as a middle person between branding companies and clients. In Kisumu City this services were hard to find. I saved every coin that I made and used it as capital,” she says.

Omari registered her company in 2013. She began operations in the same year while still employed at a local bank. “My salary paid the two staff that I had in the beginning, office rent, and all other overheads until the company could stand on its feet,” she says.

She says that because women, like Chelang, are not considered bankable they are significantly constrained in setting up solid, physical infrastructures to drive the growth and sustainability of their businesses.

“This is the reason why women are in self-employment where they basically work for themselves and not in entrepreneurship where they bring as many employees on board as possible,” Omari expounds.

• In Omari’s case she is an entrepreneur, and need not be at the place of work at all times because the business can thrive and be sustainable even in their absence. In self-employment, the presence of the business owner must be felt at all times.

Francis Kibe Kiragu, a lecturer in gender and development studies at the University of Nairobi, tells IPS that while women have sufficiently demonstrated a desire to run their own enterprises, they suffer crippling financial exclusion.

“Women in self-employment or entrepreneurship are therefore driven by necessity and not innovation. They just want to meet their basic needs and as a result, they are perceived as contributing very little to the economy,” he observes.

Because of these challenges, he says that women are more likely than men to discontinue running a business. The GEM 2017 report confirms Kiragu’s assertions as it indicates that, while Africa may have the highest number of women running start-ups, the number of women running established businesses is lower.

In fact, in the sub-Saharan Africa region alone, there are two women starting a new business venture for every one woman running an established business, the report indicates.

“I started designing, making and marketing my pallet seats at 25 years old. Ten years later I am still facing the same financial challenges I faced when I started. Many times I have come close to abandoning this dream and finding employment,” says Chelang.

Through the AFAWA it is hoped that women like Chelang will soon be able to leverage financial instruments to their and their businesses’ benefit.

The Global Gender Summit, hosted by the African Development Bank (AfDB), and which is currently taking place from Nov. 25 to 27 in Rwanda’s capital, Kigali. Credit: Plasir Muzogeye/IPS

By Emmanuel Hitimana
KIGALI, Nov 26 2019 (IPS)

When Rwandan-born, Senegalese-raised entrepreneur and businesswoman Kristine Ngiriye was 18 she had a brilliant idea that she wanted to translate into a business. But when she went to her local bank for a loan they told her to rather get married, because “ a woman must be married instead of venturing into business”, Ngiriye tells IPS.

Even though this happened more than two decades ago, women in Africa are clearly oftentimes discriminated against when it comes to accessing investment and capital.

The issue was one of the main talking points at the Global Gender Summit, hosted by the African Development Bank (AfDB), and which is taking place from Nov. 25 to 27 in Rwanda’s capital, Kigali.

Attended by some 300 business women, policy makers and political leaders,  including Ethiopia’s President Sahle-Work Zewde — the only female president on the continent — attendees learnt that while African women contribute towards not only bettering their lives, but those of their families, some 70 percent where excluded financially. And in instances where women saved and offered capital for a loan, many where rejected or in the rare cases where they were given credit, it was considered “high risk”.

AfDB president Dr. Akinwumi Adesina reminded participants present at discussion panel titled, “Unpacking constraints to gender equality”, that policymakers and even bankers had to be accountable to women.

“Let’s be smart and let’s be wise: women are the best investments any society can make. When they earn, they spend 90 percent of their income on their households, including [on] their husbands,” Adesina said.

Kristine Ngiriye was 18 she had a brilliant idea that she wanted to translate into a business. But she was told by bankers to get married instead. Now the CEO of a consulting boutique that offers specialised services to governments and businesses and founder of Entreprenarium, an accelerator for African women in business she has made huge impact in business across the continent. Courtesy: Entreprenarium

Ngiriye is a case in point. Her mother had stepped in to be her guarantee and eventually her business journey led her to founding Entreprenarium in 2014.

“My business is here today, after a woman, my mother, committed to be my guarantee. With all the support I got along the journey I decided to help other women entrepreneurs to build their enterprises and help them grow,” Ngiriye told IPS.

Ngiriye’s lists of accolades are long and her impact far-reaching.

On the Entreprenarium’s Facebook page they describe themselves as “the first pan-African philanthropic accelerator that helps entrepreneurs start and sustain innovative businesses to drive Africa’s prosperity”.

Since the accelerator was founded, some 2,000 entrepreneurs have been trained across Africa — Entreprenarium has offices in Libreville, Kigali, Dakar, Abidjan and Brussels — with $2.1 million invested towards technical assistance and the funding of 52 projects.

In addition, Le Salon des Entrepreneurs de Guinée reports that Ngiriye is CEO of KN & Partners, a consulting boutique that offers specialised services to governments and businesses, which include political marketing and international business development.

But Ngiriye still believes that while businesswomen have come a long way since when she first started out, men’s perceptions about a woman’s ability to achieve their dreams have not changed at all.

“What [is currently] happening to these women is exactly what we lived through, which is lack of access to finance and technical assistance. I can say that after these past 27 years nothing has changed. Maybe they are a little bit lucky than I was to have a continent full of possibilities,” she said.

What a first day of the #2019GGS here in #Kigali. Impactful conversations with Dr. @akin_adesina, President of @AfDB_Group, and our Founder, @kristingiriye, about the state of women’s access to finance in Africa and the solutions to reduce the financing gap for women entreprises. pic.twitter.com/orLd4ck1Oo

— Entreprenarium (@Entreprenarium) November 25, 2019

In a bid to change the status quo in the women and financing, AfDB launched the Affirmative Finance Action for Women in Africa (AFAWA) in 2016 in Zambia, with the aim to mobilise $3 billion of new lending by banks and financial institutions for women in Africa. G7 leaders also approved a package totalling $251 million in support of AFAWA during the summit this August.

• In 2018, AfDB partnered with Entreprenarium to train 1,000 female entrepreneurs on business development and financial management across the continent.

Kennedy Uzoka, the Group Managing Director for United Bank of Africa (UBA Group) echoed Adesina’s remarks, telling IPS that women should not be held back because they do not own property.

“Access to finance is a problem for everybody, but it is worse for women. Commercial banking in most jurisdictions want collateral and so right from the beginning, women are disadvantaged because they have no assets,” Uzoka said.

• The continent has a $42 billion financing gap between men and women.
• It is projected that closing the gender gap in Africa will boost the global economy by $28 trillion by 2025.

Josephine Anan-Ankomah, the Group Executive of Commercial Bank, which is part of the Ecobank Group, believes that technology can help bridge the financial divide between men and women.

• The bank has a digital payment system called EcobankPay which also provides women who use this service with loans, even if their cash flow is inconsistent.

“We need to innovate and lend the woman against the cash flow that they are bringing and we must prepare to structure their facility such that it doesn’t have a fixed tenant base on what they earn,” she told IPS.

Rwanda’s First Lady Jeannette Kagame has championed for the country to be gender mindful. She told participants that women being disadvantaged must be a thing of the past, adding that policy makers must be deliberate in placing women and girls, at the heart of transformative strategies and decisions.

“It calls for each of us to play our role: Women and girls – we must organise and be each other’s keepers. Youth – you must be proactive in taking your life in your own hands and calling out inequality wherever it is perceived. You have what it takes to thrive, in this fast-changing world,” she said.

• Rwanda already has the greatest ratio of gender representation in parliament in the world — with 61 % of its parliamentarians being women.

Kagame further called on partners and stakeholders  to be innovative and relentless in their commitments to invest in women and girls and to level the playing field for all.

During the summit, participants joined the rest of the world to honour the 16 Days of Activism against Gender-Based Violence. The 16 days kicks off on Nov. 25 each year, which marks International Day for the Elimination of Violence against Women and runs until December 10th.

Ethiopia’s President Zewde said that there would be no progress on the continent if girls were left behind.

“It’s time to move from rhetoric to action, from words to deeds. We have to have the humility to go back down the ladder to make a difference,” she said.

** Writing with Nalisha Adams in Johannesburg