This archive report was first published on 13 November 2019.
Published on November 13, 2019, by Catherine Njoroge, external affairs and communications manager at Stanbic Bank.
Women running businesses in Kenya face significant challenges in accessing financial services from institutions that often view them as a charity case rather than a viable investment opportunity.
However, the reality is that women-owned SMEs in Kenya are a significant force to be reckoned with, with over 517,000 businesses, or 33% of all SMEs, according to a report by the International Finance Corporation (IFC).
These women counsel that the female economy, like the male one, is driven by attitudinal differences that, if taken into account, can generate positive returns with minimal investment.
One of the common misperceptions about women's attitudes to finance is that they differ little from men. However, women are generally more cautious when it comes to risk and reward, making them more likely to save and provide a stable base for banks.
Women also value deep relationships more than men, want a relationship with a bank, and are transactional and easily impressed by products. They are magnetised by experiences and act on the recommendations of peers and friends, making them an important source of referrals.
Furthermore, women tend to make decisions when well-informed, especially when it comes to investments.
Another misperception is that all banking products for the female economy have to be feminised. However, most female businesspeople feel that the real value lies in shared impact, such as improved access to financial services, knowledge, and networking opportunities.
Women's markets are profitable opportunities that are just underserved and worsened by a lack of knowledge of financial products. The opportunity cost for banks in this space is exemplified by the existing credit facility gap, which is about Sh28.7 trillion ($287 billion) for woman-owned SMEs, according to McKinsey and IFC.
To make it work, women have relied on informal sources of finance, including their own savings and loans from friends and family.
So, how do banks redeem themselves? Most female business owners believe that a successful women's programme needs leaders of those institutions to be involved, aligned, and championing those programmes, followed by across-board internal buy-in.
They also feel the need to see a deliberate effort to ensure all employees, especially the male ones, are involved and see the value in a women's programme. Diversity and inclusion are essential prerequisites to the development of a women's programme.
Granted, banks can rise to the challenge, rethink their approaches, and create equal access and opportunities for woman-owned businesses. The financial sense in this is that, through levelling the playing field for both men and women, massive strides will be made in eradicating biting poverty.
In addition to financial support, banks have to demonstrate their guarantee that they can grow together and have faith in women, have aligned visions for their business, and are willing to go the extra mile in providing the necessary 'muscle' beyond traditional banking services.
The biggest return in this is to create a multiplier effect in societies across Kenya that will make the desired change to drive the economy forward.
