Banks must focus on the impact of women’s businesses


Africa leads the world where more women than men choose to become entrepreneurs. FILE PHOTO | NMG

In my conversations with women running businesses in Kenya it is apparent that financial institutions must recalibrate their thinking and correct their misperceptions about female consumers.

These misperceptions have birthed an ingrained feeling that financial partners and policymakers have a biased view at investing in women as an opportunity to create real socio-economic impact, not charity.

Furthermore, Africa leads the world where more women than men choose to become entrepreneurs – and Kenyan women own 33 percent of all small and medium enterprises(SMEs) or slightly above 517,000 businesses, according to an International Finance Corporation (IFC) report.

The women counsel that the female economy, comparable to the male economy, is laden with attitudinal differences that if taken to account, and acted on, can generate positive returns with minimal investment.

The common misperception fronted against developing a banking programme for women is that their attitude to finance differs little from men. That’s not true. Women are a more cautious lot when it comes to risk and reward.

This means they have a higher propensity to saving and therefore guarantee a fluid base for banks.

Women value deep relationships more and want a relationship with a bank, as compared to men are transactional and easily impressed by products. Women are magnetised by experiences and consequently act on the recommendations of peers and friends. Thus, women are an important source of referrals. Women also tend to make decisions when well informed, especially with investments.

The second misperception is that all banking products for the female economy have to be feminized – this manifesto, yarned through products and services, is far from the truth.

Most female businesspeople feel that the real value lies in shared impact like improved access to financial services, knowledge and networking opportunities - to make a women’s program successful.

An unappreciated financial opportunity in women’s banking, is another myth. In fact, women’s markets are profitable opportunities, they are just underserved and worsened by lack of knowledge of financial products.

The opportunity cost for banks in this space is exemplified by existing credit facility gap, which according to McKinsey and IFC is about sH28,7 Trn ($287 billion) for women-owned SMEs. To make it work, women seem to have relied on informal sources of finance, including their own savings, and loans from friends and family.

How do banks redeem themselves? Interestingly, most female businesses owners I have talked to have their convictions spot on, a doctor-heal-thyself approach.

They believe a successful women’s programme needs leaders of those institutions to be involved, aligned and championing those programmes, followed by across board internal buy-in.

They also feel the need to see a deliberate effort to ensure all employees, especially male employees are involved and see the value in a women’s programme. They also consider the diversity and inclusion as an essential pre-requisite to development of a women’s programme.

The writer is Stanbic Bank's External Affairs and Communications Manager.