A research report from the Kenya Association of Manufacturers published in May 2017 states that women-owned businesses make about 48% of all Small and Medium Size Enterprises (SMEs). The report continues to state that these businesses contribute approximately 20% of Kenya’s GDP. Women owned businesses, therefore, are critical in the contribution to the Kenyan economy and indeed the rest of the world. Women in business face gender-specific challenges that are not necessarily faced by male-led businesses. These challenges limit the growth of these businesses and when they are not proactively dealt with, they will curtail the business survival.
Women-owned businesses face the challenge of access to credit and capital. The traditional banking model requires that a business has a healthy cash flow and adequate collateral to qualify for loan products. The Federation of Women Lawyers (FIDA) conducted research that indicated that women hold only 1 (one) percent of land titles in Kenya, while 5 percent of the land is owned jointly with men. This, therefore, means that there are very few women who can provide land as collateral for their businesses. Other properties that could be used as collateral like vehicles are used for both business and family. These, therefore, poses a challenge to their ability to borrow against such assets. The importance of innovative financing models for women-owned businesses is critical for their survival. Designing products like a revolving fund managed by a Business Membership Organization based on a pre-determined criterion is important for these businesses. Encouraging women to save in a credible Savings and Credit Cooperative (SACCO) is critical. They can have the power to use their savings to borrow and grow for their businesses.
Women are nurturers and they have to divide their time between running a business and managing the household. According to a UN Women report, women tend to spend around 2.5 times more time on unpaid care and domestic work than men. In the African society, women are still expected to undertake certain household chores that men are not. These chores limit the time women have to build their businesses. Women should therefore strive to form structures within the household and the business to assist them to build bigger and sustainable businesses. Digital transformation is crucial for these businesses. Digitization will help the businesses modify existing processes, enable the businesses to reach more markets as well as enhance customer experience.
Due to the challenges of nurturing and managing a household, it limits the mobility of women to seek markets away from the locality of the home. This leads to inadequate supply chain diversity for women-owned businesses. Male business owners are able to travel for longer periods of time and reach further geographical areas as compared to women. Women have to ensure that their homes are still operational even when they are out for business-related assignments. They, therefore, tend to conduct businesses near their areas of residence hence limiting their geographical reach. Women business owners will need to embrace partnerships to widen their business reach. Partnerships will assist women businesses to reach different geographical markets. Business Membership Organizations should enhance their capacity for partnership and knowledge to enable them to grow their businesses.
There are challenges faced by women in business relating to information, they include a lack of reliable and accurate sources of information, lack of adequate support networks including business advisors and mentors. This prevents women from fully benefiting from business opportunities that are present in the marketplace. These challenges could lead to business stagnation or worse still to closure. Women require consistent support to enable them to access reliable and accurate information. They should be more proactive to seek information regarding their businesses and the business environments. Business Member Organizations (BMOs) have a fundamental responsibility to provide this information. Proper management and governance of these organizations are critical for building the capacity of women in business. Being the go-to organization for reliable information required to run and manage businesses.
BMOs have a mandate to make a difference in the businesses of women and change the course of history. It behooves them to support their members and ensure that their needs are met. Functional and sustainable BMOs are key to assisting women to build great and big businesses. The critical mass within these BMOs should create enough momentum to facilitate policy discussion and change. BMOs requires proper strategies to advance the women in business agenda. The leadership and management of these entities should be professional and should ensure that the challenges that women face are addressed and resolved.
BMOs should be the unified platform to facilitate women in business in the following areas including outlining a common agenda for boosting women entrepreneurship; providing information on the networking options available and programs that they can benefit from to increase their skills and competencies to successfully run their business; facilitating local and domestic marketing linkages; capacity building and services to improve skills and grow their businesses; designing innovating financing models to boost access to finance for women amongst other strategies.
CPA Caroline Gathii, IRMCert, is an International Certified Risk Expert with FirstIdea Consulting Limited President – Organisation of Women in International Trade (OWIT Nairobi)
Email: cgathii@firstideaconsulting.co.ke
