Africa’s record is mixed on this front, but there are certainly examples where the empowerment of women has contributed to better outcomes in the communities they live in. In emerging and frontier economies, in particular, programmes, where women have played a leading role, have been shown to have positive outcomes.
This is beneficial to borrowers and their households too, as it means lending is done on a sustainable basis, preventing borrowers from falling into a vicious circle of indebtedness.
“This market of low-income female microentrepreneurs around the world has been estimated to be one billion, so the potential is huge,” says Schultz, “While according to the World Bank, an estimated 1.4 billion adults do not have an account at a formal financial institution and are therefore financially excluded.”
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ASA International operates in eight markets in Africa: Kenya, Tanzania, Rwanda, Uganda, Zambia, Ghana, Nigeria, and Sierra Leone, with East Africa showing the strongest growth. Prior to the Covid-19 pandemic, some were facing some slow-down in their economies, but overall ASA International’s operations were doing well.
Covid-19 remains a challenge for many businesses. According to the World Bank*, women in developing and frontier markets face the economic brunt of the pandemic, with women making up the majority of the roles affected by shutdowns.
“Despite this, the data from ASA International shows that small businesses run by women are recovering very quickly now that lockdown restrictions are being relaxed or ended,” notes Schultz. “The access to funding for female entrepreneurs is therefore crucial in ensuring economic recovery.”
ASA International anticipates its clients collectively to be able to repay loans fully or close to 100% after three or four months (after loan officers have resumed field operations).
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“In economies where women have more bargaining power at home, equality in access to finance, protection from violence, and equality in employment opportunities in all industries and sectors, women are better equipped to weather economic shocks,” says the World Bank.Technology can also be an important enabler, notes Schultz. “The likes of ASA International are working hard at transforming from microfinance institutions that do most of their business in cash to introducing digital financial services for the benefit of their clients,” he points out.
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“Again women, as the key economic decision makers in many households, are key to driving this process,” says Schultz.
*World Bank article
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About the author
Patrick writes and edits content for Investec Wealth & Investment, and Corporate and Institutional Banking, including editing the Daily View, Monthly View and One Magazine - an online publication for Investec's Wealth clients. Patrick was a financial journalist for many years for publications such as Financial Mail, Finweek and Business Report. He holds a BA and a PDM (Bus.Admin.) both from Wits University.