Banking on women
John Etkind
Published: 02-OCT-06

�Women are a driving force in the African economy, but their access to finance is still far too small,� declares Declan Duff, VP of the International Finance Corporation�s Industries section, �and this is why the IFC is partnering with Nigeria�s Access Bank to bridge the gap with lines of credit specifically for female entrepreneurs.�

The initiative, which makes available $15mn for on-lending to women, is geared to increase the contributions of women-owned businesses to the Nigerian economy for maximum development impact. Although comparatively modest, the funding opens the door to a new chapter in female entrepreneurship and means Access Bank becomes one of the first banks in Africa to dedicate lines of credit to finance women-owned businesses. It is the first significant loan under the IFC�s Gender Entrepreneurship Markets (GEM) programme, designed to leverage the potential of women in emerging markets.

IFC�s funding will allow Access Bank to meet the financing needs of its female clients, particularly those running small and medium enterprises.

At the same time, the IFC�s GEM programme will provide comprehensive assistance and training to enhance the bank�s ability to reach out to the women�s market as well as provide business and management training for women entrepreneurs.

Access Bank�s MD, Aigboje Aig-Imoukhuede, says the bank plans to demonstrate that supporting women entrepreneurs in Nigeria is commercially viable.

�We�ve been searching for ways to address the needs of Nigeria�s women entrepreneurs,� he says. �We are very pleased to partner with IFC to launch a new credit programme that will enable us to increase our support to women-owned businesses.�

Access Bank recently became the first bank in Nigeria granted admittance to the Global Banking Alliance for Women, a consortium of best practice banks that leverage the women�s market for profit as well as social good.

Rachel Kyte, director of IFC�s Environment and Social Department, believes that partnering with Access Bank to develop a credit line works specifically for the international community�s third Millennium Development Goal, �which is to promote gender equality and empower women.�

IFC�s partnership with Access Bank is a pilot programme that IFC aims to replicate in other emerging markets. World Bank Group research has established that women are more likely than men to contribute additional income to household poverty reduction, that giving more women access to credit and increasing their economic power is more likely to translate into improved livelihoods for a wide cross-section of society, and that women entrepreneurs are more likely to employ other women.

The IFC created the GEM initiative about 18 months ago, specifically to address the economic inefficiencies and social inequities that arise when aspiring businesswomen cannot realise their full potential because of gender inequality. Nigeria is the first African country to qualify and Access Bank is the first African bank to be awarded partnership status in the IFC�s gender empowerment programme.

Access Bank is a full-service commercial bank operating through a network of over 80 branches and service outlets in all major commercial centres in Nigeria. Its principal business activities include retail banking, commercial banking, corporate finance, trade finance, and foreign exchange services. In March 2006 its total assets and shareholders funds amounted to $1,3bn and $201mn respectively.

It has grown its capital base from N2,7bn in 2004 to about N29bn in 2006, based largely on its public offer in October of 2004 and acquisition of Capital Bank International and Marina International Bank. The bank�s balance sheet grew by 353 percent from N45bn in 2004 to N204bn in 2006.

The Nigerian initiative follows a smaller programme in South Africa in which women-owned small and medium enterprises (SMEs) were assisted through wide ranging business-enhancing services under an IFC scheme.

�The programme gives women entrepreneurs the tools and guidance they need to build their businesses, creating jobs and developing sustainable new income for both the entrepreneurs themselves and the workers they employ,� says the IFC.

University of Pretoria research found that women-owned businesses in South Africa are generally less competitive than those run by men, and that women entrepreneurs are also typically less equipped to present a convincing business proposal to prospective financiers. �This discrepancy is mainly attributable to the multiple roles women are expected to fulfil in South African society, which limits their access to essential business services and industry information,� a report from the university maintains.

In response, the Women Entrepreneurship Programme targets promising women-owned SMEs that have little access to loans from the country�s mainstream banks. Those meeting the entry criteria participate on a cost-share basis, receiving high-quality training, mentoring, marketing advice, and assistance in preparing their own business plans that are then submitted to local banks.

The scheme is managed by the IFC�s regional SME development programme, the Africa Project Development Facility (APDF). Additional support comes from such partners such Absa Bank, the training arm of the University of Pretoria, the South African Department of Trade and Industry�s Gender Unit and local management consulting firm ECI Africa.

The programme is now being rolled out on a nationwide basis, building on initial successes with businesswomen such as Hlengiwe Hlophe.

She joined the programme to increase the number of loans issued by her low-income housing finance business, Peulwana Financial Services.

�Women are an often overlooked segment of the South African economy, and one that holds unrealised potential for growth,� says Richard Ranken, director of IFC�s Africa Department. �We believe they have the potential to be a powerhouse. Matching high-potential women-owned firms with WEP�s programme of services will help this happen.�

In a related development, the International Labour Organisation (ILO) and the African Development Bank (ADB) have announced further support for Africa�s women entrepreneurs �in recognition of their role in the continent�s economic growth�. The two organisations are focusing support on growth-oriented women entrepreneurs (GOWEs) in Ethiopia, Kenya, Tanzania and Uganda.

A report �Support for Growth-Oriented Women Entrepreneurs� calls for development policies that can contribute effectively to women�s entrepreneurship in the East African countries.

The report notes that African women entrepreneurs are becoming more prominent in many African economies despite several specific constraints such as limited access to land, credit, education and training. Against this background, the ILO and ADB have developed integrated solutions to support financing for growth-oriented, female-owned enterprises in the regions.

The organisations have focused their support for women-led enterprises in East Africa as a microcosm of the continental economic environment, and intend extending it to the rest of the continent. They recommend linking access to finance to business support services through new projects to provide loan guarantees, business training and strengthening of associations of women entrepreneurs. The organisations also call for special efforts at the national and regional levels to challenge existing cultural and social practices and to allow women entrepreneurs to participate in private sector development and employment creation activities by reviewing legal frameworks and other restrictive regulations.

In the last decade, the realisation has dawned that Africa�s development will only take off to any significant extent if a revolution of women�s emancipation in business happens meaningfully and quickly. The movement, now with the active support of powerful African and global organisations, appears unstoppable. Resistance by the old guard will continue stubbornly, especially in the rural areas and it is here that it must be rooted out, because nowhere is women-led enterprise more urgently needed.

In the more enlightened of Africa�s societies, both public and private, women are taking their place in all spheres of endeavour. This is happening because rewritten constitutions say it should, and far-sighted corporations are realising the value of female contribution. But for all the hoopla in the media, and the public chest-beating of governments and corporations, Africa still has mountains to climb before it can truthfully say that women are representative in the measure of economic activity they deserve. Financial and other support from organisations such as the IFC, development banks and the ILO will make sure it happens sooner rather than later.

This article was first published in Business in Africa Magazine (International Edition), September 2006. To subscribe click here

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