The joint report by the World Bank Group and the World Trade Organization on the role of Trade in promoting women’s equality, states as follows: “Trade can dramatically improve women’s lives, creating new jobs, enhancing customer choice, and increasing women’s bargaining power in society. But women’s relationship with trade is complex, as it can also lead to job losses and a concentration of work in lower-skilled jobs. To ensure that trade enhances opportunities for everyone regardless of gender policymakers should assess the potential impact of trade rules on various groups of people and develop policy responses based on evidence.” The report seeks to build on new analysis and new sex-disaggregated data to advance understanding of the relationship between trade and gender equality and to identify a series of opportunities through which women can gain from trade. Women face various challenges in trade and this article articulates just a few of them.
The risk of inability to access credit, capital, or any form of decent financing. There are many sources of capital available for Women’s businesses: venture capitalists, banks, government-financed funds amongst other sources. To build an export business requires substantial amounts of money available to the business for the long haul. Most business financing solutions finance a need, for example, an asset, this is good financing no doubt but to enable the asset to gain economic value, there is also a need to finance the supply of raw materials as well as the operational costs necessary to create that economic value. There are organizations with machinery but cannot afford working capital to run the business. The holistic assessment of business needs is extremely critical other than looking to identify only one area where the financial institution can finance. Most women businesses are informal and small in size, have not very attractive cashflows, lack adequate business projections but could be viable businesses if a more holistic approach including how they are organized and managed is taken into consideration.
The logistical nightmare; many women traders are able to export their products in small quantities. They export artifacts, textiles, grains and cereals, tea amongst other products that they produce. The products are exported in small quantities to different destinations around the world. Since these products are not in large quantities, women traders opt to transport them through the air in baggage bags or through courier companies who ferry small packages. They are not able to afford enough quantity to hire a container which could be a much cheaper form of transport. The risks for this kind of transport it is that there is a high cost of transport hence increasing the cost of the goods, there the risk of loss of products. Surely the export market looks really unattractive to small-scale businesses and especially women in export. The logistics companies are designed to cater to large companies who are able to produce products in large volumes hence able to transport goods around the world. We need logistical solutions which are able to aggregate smaller packages from small-scale women for export to different destinations.
Access to export information is another huge risk for women exporters. Large companies have the financial muscle to employ trade professionals whose daily activities are to handle their export licensing, certifications, compliance to the numerous rules and regulations. They are assured that as they undertake their export businesses, they have ticked all the boxes, complied with all the laws, acquired all the licenses, and their products are ready and will reach their destination with 100% compliance. A woman exporter will have to call all she knows on her contact list to ask them how they dealt with their last export, do a few google searches just to cross the t’s, call a friendly clearing agent in to ensure she is ready to export. Due to lack of this critical knowledge, most women exporter undervalue their exports and end up even incurring huge losses. In other cases, their goods are rejected at the entry points of destination due to lack of compliance with one or more regulations that they may not have had any prior knowledge about. Women exporters require well-packaged information to enable them to concentrate on their craft and enable them to export efficiently. There should be adequate resources set aside to enable this to take place.
Trade documents for example trade agreements, export licenses, Bill of landing, letters of credit are all documents with a lot of legal jargon or unfamiliar language. This is a huge hindrance to trade for women’s small businesses. This creates a huge barrier to trade. The women trader has her goods ready for export but another hurdle presents itself, the challenge of consuming the trade-related information in these documents.
Most women after many times of trial and error and shire drive and tenacity are able to master the art of export. The next big risk will then present itself, the inability to scale the business. The venture that is export requires that once you commence the journey and you connect with your foreign customer who is ready to consume your goods, then the business growth takes up an upward trajectory. The orders start coming in and find a business owner with limited knowledge on how to scale. The knowledge of how to scale a local enterprise to an export business; lack of knowledgeable staff members to assist in steering the organization; inability to afford business advisory services amongst other challenges that limit these businesses to scale. We have women who have abandoned the export business since they do not have the capacity to arrange and grow an export business. Women’s businesses require access to continuous support in skill, strategy, and financing. There is also a great need for continuous mentorship and capacity building.
Caroline Gathii is an International Certified Risk Expert with FirstIdea Consulting Limited and also President of Organization of Women in International Trade, Nairobi (OWIT Nairobi)
Email: cgathii@firstideaconsulting.co.ke
