Financial Access: A move towards women empowerment in Business

Figure 1 women in a Kenyan market image source News in Africa

Achieving gender equity and women empowerment is central to sustainable development agenda and “Only by ensuring the rights of women and girls across all the goals will we get to justice and inclusion, economies that work for all, and sustaining our shared environment now and for future generations” United Nations.

Women suffer most effects of drought, poverty, health, food insecurity, and gender biasness but also possess ideas and leadership to solve the same challenges.  The gender discrimination bars women growth and deters global advancement.  Women constitute 40% of the world’s workforce and greatly participate in economic growth through agriculture, employment and through Small and medium sized enterprises (SMEs).  Despite the great role, women suffer the unmet financial needs to push on their businesses.  World Bank reports of US$260 billion and US$320 billion unmet need for women in SMEs yearly.

Discriminative laws affect women access to financial services and cripple their ability to save, borrow loans, and even insure their businesses against potential risks.  Unequal right to inheritance of land and property denies women entrepreneurs’ an ability to use the properties as collaterals for loansWomen also lack the advantage of trading with the property through lease to potential investors.

Gender barriers in getting national identification cards can hinder women ability to open bank accounts, purchase land, and economically valuable property where stringent identification requirements exist.

In Kenya, women make up half of MSME owners and it is estimated that they have less than 10% of the available credit.  Despite microfinance being  a great poverty reduction tool, it offers only limited support for women who wish to grow their enterprises beyond the micro level. Women business owners who have outgrown the maximum loan limits from microfinance institutions have great difficulties obtaining loans as small as Kenyan shillings 1 million from commercial banks.

Figure 2: image source Google.com

The Kenyan government has set up recommendation to increase access to finance and collaterals, by, encouraging provision of financing mechanisms for female-owned businesses through local financial institutions and international development institutions.  Collecting and strengthening legislation to enable efficient exchange of credit information between MFIs and banks leading to comprehensive coverage through a credit reference bureau.  Prioritizing on reform of part IV of the Companies Act, the Chattels Transfer Act, and common law in relation to movable property securities law by enacting a best-practice regime based on article 9 of the U.S. Uniform Commercial Code, as adapted for use in common law countries (for example, New Zealand).

Reducing bureaucratic barriers to enable women participation in  formal business sector. Women entrepreneurs’ face legal, regulatory, and administrative barriers that are either not faced by male counterparts or have a disproportionate effect on women. Women family duties and limited access to financial services makes them unlikely to register their businesses.  Simplified registration procedures encourage women in registering their businesses.

According to World Bank 2006 Urban Informal Sector Investment Climate Analysis in Kenya, on average, women perceive tax rates, tax administration, and customs to be greater constraints to business growth than men do.  Taxes and customs are costs of formalization, and this negative perception thus decreases the likelihood that women will register their businesses.

Building on women access to land and property rights, despite the formal statute law potentially giving women right equal rights to own property most customary law bar women from owning property.  For most women the formal legal position is irrelevant in practice and believes justice is dispensed at local level without recourse to the formal courts.  Moreover, formal registration practices and allocation of state land have excluded women and their interests are unnoted on title deeds.  Resultantly, land on which they have customary user rights and on which they may depend for their livelihoods can be disposed of without their knowledge or consent.

Figure 3 A Kenyan woman holding onto a title deed image source New Deeply.com

 The government has set steps to ensure equitable rights of property through the government of Kenya’s Governance, Justice, Law, and Order Sector (GJLOS) Reform program, a training manual aimed at magistrates and customary leaders on women’s property rights, setting out clearly case law that establishes that statute law on women’s property rights prevails over discriminatory customary law.  Monitor the impact of the training manual through considering property rights decisions at the local level (for example, market surveys undertaken by GJLOS).

Dissemination of knowledge on women’s property rights through will-writing campaigns, and pamphlets such as the Federation of Women Lawyers’ [FIDA’s] “ABC of Property Law.”  Prioritize publication of law reports on women’s property rights through GJLOS and Continued training of Land Control Board (LCB) and District Land Tribunal (DLT) members in gender issues, and monitoring impact at the local level.  Nongovernmental organizations (NGOs) to take strategic test cases to court to establish robust case law in relation to women’s property rights.

Tackling the gender-based obstacles to entrepreneurship will not only enable women to make a greater contribution to the economy and improve their families’ livelihoods, but also help to create a business environment that is better for all enterprises in Kenya and globally.

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