Mobile credit key for non-graduate women businesses

Women with undergraduate education finance businesses through bank loans, retain profit and personal savings, but those with lower training use mobile credit, investment clubs (popularly known as chamas), friends and relatives.

Findings by research firm Viffa Consult show generally, access to finance was ranked second only to harassment by government authorities with market access ranked third as a challenge. Those with turnover below Sh5 million had the most difficulty accessing financing.

Only about a third of the businesswomen surveyed had easy access to financing.

“About 67.74 percent of respondents indicated they found it hard to access business financing from institutions while 32.26 percent indicated it was easy,” said the report.

The researchers gathered that hardships that entrepreneurs with low turnover had getting money had to do with lack of collateral and high informality of their enterprises.

“SMEs with turnovers of less than Sh5 million, constituting 78.57 percent of respondents, found it most difficult … probably due to lack of collateral and informality of business, most of whom don’t keep transaction records,” said the report.

Though graduates resorted to formal systems of financing and personal savings and non-graduates mostly relied on informal sources, both groups were involved with investment clubs, friends and family as part of their networks to gain business insights.

The type of challenges the women faced depended on turnover and type of business.

The report said: “Women entrepreneurs in agriculture indicated lack of information, access to market and finance as their top challenges. Women with annual turnover of less than Sh500,000 in retail sighted harassment by government authorities as their biggest challenge while entrepreneurs in design, media, entertainment, hospitality, education, tours and travel and real estate had gender- based discrimination as their biggest challenge.”