Raising seed capital is one of the biggest challenges facing women entrepreneurs in Kenya’s premier manufacturing sector. According to a new study, banks need collateral that most of them don’t have.
Most women work or run businesses in the informal economy and face numerous difficulties, including wage and promotion differentials and barriers to accessing the information, technology and finance to grow their businesses.
Manufacturing accounts for around 10 percent of Kenya’s gross domestic product, but women make up only 17 percent of the sector’s workforce, according to a study by the International Center for Women’s Studies and the Kenyan Manufacturers Association published on Tuesday.
“While government initiatives promote business development, most respondents said they had difficulty accessing these funds. Cases of sexual exploitation in exchange for credit facilities and compliance approvals have been mentioned, ”the report said.
As a result, most of the female-owned manufacturing enterprises are still micro, small and medium-sized enterprises (SMEs) operating in the informal sector and unable to grow and enter the formal economy.
Naomi Ndele, head of SME and agribusiness at KCB Bank in Kenya, said banking policies need to be reviewed to include women.
“The banking model was developed by men to support men, so many lending policies and methods are very restrictive and do not favor women,” said Ndele during a webinar where the report was published.
“There are few known financial institutions that have redesigned their businesses to meet the needs of women,” she added.
Ndele explained that while there are some financial products in the market aimed at women, they do not include the sizeable credit that manufacturing companies often require.