Typically, when a Ugandan woman applies for a loan to start or sustain a small business, chances are the door will be figuratively slammed in her face with the word ‘collateral’ echoing in her ears.
At best, the lender may suggest the woman returns with a spouse in tow or any other man willing to guarantee the loan. This trend is not as bad as in past decades, but it still prevails today with levels of varied frequency.
Across Africa, and to an extent much of the developing world, this marginalization is institutionalized. It is rooted in cultural norms and ingrained in many aspects of day-to-day life, most glaringly in the rural areas. It explains why women readily form village savings groups so that they can pool the little they can earn to support each other.
The African Development Bank (AfDB) says women often lack access to productive resources, including land, property rights, markets and networks to grow their businesses.
They find it difficult to secure financing from banks and other financial institutions due to inherent biases in the system, such as the lack of appropriately designed financial products, weak institutional capacity and lack of incentives within banks to target and lend to women.
Patricia Ojangole, the Chief Executive Officer of the Uganda Development Bank said recently, “The majority of financially excluded women are in the informal sector and hard-to-reach areas, which requires innovative financing solutions to reach out to them.”
Gender bias impacts Women’s ability to showcase their flair to make money. In a fast-paced competitive world, holding back women is unproductive. It puts a damper on a large segment of human resources able to generate and sustain economic growth.
The fact that women make up more than half of Uganda’s total population makes this situation even the more unreasonable given the multiplier effect of economically empowering them.
According to the World Economic Forum, until gender parity is improved throughout the African continent, female entrepreneurs will remain under-earning compared with their male counterparts.
After two years of detailed preparatory work, the government and a host of partners is stepping up to meet this challenge. The $217 million (UGX800 billion), five-year World Bank-funded Generating Growth Opportunities and Productivity for Women Enterprises (GROW) Project is about opening doors.
Launched in 2023, the GROW project targets 60,000 female-owned enterprises, including 3,000 refugee-owned businesses, with an additional 1.6 million indirect beneficiaries, namely male partners, other household members and communities at large. The interventions are intended to hammer at the barriers holding back Uganda’s women and will cover all 135 districts but focus on 11 cities.
The best scenario is the unleashing of an entrepreneurial wave in agribusiness and manufacturing that can spike standards of living and widen the tax base.
The key implementing agencies are theMinistry of Gender, Labour and Social Development (MGLSD), and the Private Sector Foundation Uganda (PSFU). According to MGLSD, the GROW project arose out of the need to respond to the needs of women entrepreneurs who want to grow their businesses, sustain their self-employment and create more jobs.
Betty Amongi, the Minister said in March, “Our interventions seek to influence formal institutions, laws, policies and practices and to support and promote women’s rights to economic, social and political empowerment as well as the strengthening of institutional capacity and accountability.”
The Project Development Objective (PDO) is to increase access to entrepreneurial services that enable female entrepreneurs to grow their enterprises in targeted locations, including in refugee-hosting districts.
The PSFU CEO, Stephen Asiimwe said, “We believe that women play an important role in Uganda’s economic development and we must support them in every way possible.”
Recently, a parliamentary committee queried why only $35 million (UGX130 million) is earmarked as direct credit to women while the bulk of the money will be channeled through MGLSD and PSFU initiatives in partnership with other government ministries, departments agencies and other local and foreign entities.
“The project is structured in a manner that does not address only the issue of credit, because we could give women credit and they go and fail to access even that credit in a bank,” Aggrey David Kibenge, the MGLSD Permanent Secretary told the MPs.
GROW involves considerable spadework. Other institutional structures have to be in place so that the targeted women can fully exploit what GROW has to offer. For instance, there is a big gap between the needs of the rural women and their counterparts residing in urban centres. A rural woman would be thrilled to receive $1000 while the lady running a business in Kampala, may not be so excited.
There is also the issue of intensifying financial literacy and strengthening capacity building by providing training in important areas like entrepreneurial skills. Last month, Daniel Ayebare, the Chairperson of the Uganda Financial Literacy Association (UFLA) said, “There is a lot of money being dished out by both government and development partners in their efforts to reduce poverty and empower the population, but unfortunately, this money is being dished out to people who have no idea of how to manage it.”
There are three main components to GROW. Support for Women Empowerment and Enterprise Development Services, which will also cater for refugee communities; access to finance for women entrepreneurs and enabling infrastructure and facilities for women enterprise growth and transition.
The activities include community mobilization and mindset, core business training and business development support in several economic sectors. There is also a planned work placement and apprenticeship program.
Financing women entrepreneurs will be done through competition grants for business expansion. A special GROW Financing Facility will be the source for lines of credit and loans to women-owned businesses that have a track record for sustained growth. Funds will also be available for start-ups involved with innovative products and services.
PSFU will assist pre-qualified women entrepreneurs access finance through Financial Institutions (FIs) to grow their enterprises from one level to another, beginning with micro to small; small to medium and medium to large enterprises. The budget is $70 million, targeting nearly 30,000 women across the three levels.
The third component in the GROW project, is designed to ease the working conditions for women, such as provision for gender inclusive workplace infrastructure.
GROW is something that can literally transform lives, but there is a catch. The men folk have to be supportive. Inevitably, and especially in the rural areas where traditions count for much, some men may feel resentful. The inclination to take control of the beneficiary’s money may prove too strong to shake off. This is why community mobilization and mindset are crucial factors for the success of the project.
