0
0
By Annonciata Byukusenge
Lack of property ownership documents is among obstacles making women unattractive customers to microfinance institutions and banks. But this has not stopped them from saving money in closely knit social groupings called ‘Ibimina’.
This came out during the Women Deliver conference 2023 where participants called on concerted campaigns to compel financial institutions to ease lending conditions to enable women to access loans for personal development activities.
Speaking at the global event, social enterprise founder, Ms. Blandine Umuziranenge said her entrepreneurial journey towards establishing Kosmotive, the manufacturer of KosmoPads reusable sanitary pads had been tumultuous due to mistrust that banks have with businesswomen.
“I am now confident to approach a bank for funding, but I still feel there exists a level of mistrust between banks and women borrowers. For women without a banking background, any bank’s conditions and requirements would put them off,” she said.
Ms Umuziranenge urged policy makers to moot pro-women incentives to enable banks and microfinance institutions to ease terms and conditions for women-led businesses to access credit services as studies have shown they positively impact on the economy, communities within where they operate in and their own families.
She added stringent requirements imposed by banks and microfinance institutions made women business owners to shy away thereby hurting their expansion prospects and eventual collapse.
“There are women who are registered property owners but do not have the right to use the same as they please. There are others who have excelled in running their small outfits but lack documentary evidence to prove that success, hence cannot get the collateral that the banks want,” she said.
To enable their businesses meet their financial needs, the businesswomen have formed small money transfer groups called ‘Ibimina’ where money is received in a lumpsum and passed on to members under a revolving fund arrangement.
Ms. Francine Mukandayisenga, 33 who lives in Nyarugenge district, city of Kigali asserts that accessing banking services, especially loans is difficult because many women are not registered property owners.
“I belong to the small group ‘Ibimina’, I don’t work with banks. I once went to ask for information from a bank about how I can benefit but the conditions placed before me were impossible to meet. They were asking for documents showing I own a parcel of land but I do not. This problem affects many women whether they live in the city or in the rural villages,” said Mukandayisenga.
She urged banks to ease their conditions to accommodate women business owners whose outfits are lowly capitalised. This could best be made via innovative loan products that understand women businesses.
Challenges
In her presentation made during the Women Digital Financial Inclusion Advocacy Hub panel held on the sidelines of the Women Deliver conference, Ms Umuzirange said banks remained rigid to women’s requests for funds since decision makers and regulators governing the interaction of banks and the public appear clueless on how banks are impeding growth of small businesses.
“Legislators have no idea what we go through since they have never run a business that collapsed. When you borrow from a bank, you have to repay with interest when your outfit is profitable or is suffering losses. Women unto you if your outfit collapses. Also, the loan interest charged is very high and this has made women to shun from seeking funds to meet operational expenses from the banks,” she said.
The Kosmotive chief executive urged women groups to transfer their savings from Ibimina to banks saying it would help them build their credit score opening an avenue for them to access credit facilities among other banking services. She said banked money was much safer and well documented than money held in an Ibimina group.
“In a situation where a dishonest member steals members’ cash, no one can seek any type of criminal or civil action against the offending member. There is no written proof that you can present before a court of law to prove ownership or commission of any transaction between the parties,” she added.
The Women’s Digital Financial Inclusion Advocacy Hub is facilitated by Women’s World Banking and the United Nations Capital Development Fund (UNCDF). It serves as a catalyst for collective action unifying local, regional, and global stakeholders with the common objective of accelerating progress in Women’s Digital Financial Inclusion.
Care International’s manager in charge of Ibimina Glycerie Niyibizi says 596,160 women have since transitioned from putting money in Ibimina to banks.
