Kenya’s improvement in the World Economic Forum’s (WEF) 2022 Global Gender Gap Index is a strong indicator of women’s growing participation in the country’s economic development. According to the report, Kenya’s global gender gap ranking has risen 38 places, from 95th in 2021 to 57th in 2022. This is due to increased female participation in four areas: economic participation and opportunity, educational attainment, health and survival, and political empowerment.
Notably, significant progress has been made in Kenya to increase the number of women on boards and in management positions. Gender diversity in the boardroom was 36% in March 2021, according to a Kenya Institute of Management report, up from 21% in 2017. This figure is likely to be higher, as policies aimed at closing the gap gain broader support.
Despite these remarkable milestones, women entrepreneurs face distinct challenges compared to their male counterparts. Lack of security, such as land, unconscious gender bias, juggling work-life balance, and a lack of mentorship are some primary reasons women-led businesses struggle to obtain business financing.
In Kenya, women entrepreneurs account for slightly more than a third of the country’s registered small businesses (33 percent), forcing financial institutions to reconsider how they can tap into potentially one of the most lucrative business segments in Kenya. Financial sector players must, therefore, pause and consider how they can empower women-led businesses while not neglecting their male counterparts.
Mentorship and training opportunities that address the specific needs of female entrepreneurs are one way to support women-led businesses. Non-financial benefits such as capacity building and mentorship forums, as well as partnerships such as the recent Absa Bank Kenya InspireME conference, are channels through which women entrepreneurs can receive business development and investment training to help them support their businesses.
Such opportunities not only allow women to make new business connections, but they also introduce new ideas and innovation into local industrial practices. These platforms support female entrepreneurs in their efforts to become the primary engines and accelerators of economic growth.
Partnerships to provide mentorship to female entrepreneurs are one way to accomplish this. To illustrate this, near the end of 2021, Absa Bank Kenya, in collaboration with the German Agency for International Cooperation (GIZ), launched a KES 50 million program aimed at increasing the growth and competitiveness of 1,500 women-owned Micro, Small, and Medium Businesses impacted by the COVID-19 economic situation. This was through blended finance and business development services and capacity building in areas such as cash flow analysis, risk management, income diversification, and branding. Absa Bank also provided loan facilities as part of the training program.
In March, the bank, in collaboration with the Kenya National Chamber of Commerce and Industry (KNCCI), trained over 1,000 women SME owners in Nairobi County to strengthen their financial situations in the post-pandemic era. This was in addition to another 1,500 women entrepreneurs trained in business fundamentals such as sustainability, fundraising, bookkeeping, and networking to ensure profitable operations when running a business.
This year, at least 20,000 women entrepreneurs have been empowered with the skills they need to take their businesses to the next level. An additional 5,000 women in business are also poised to be reached through a partnership with the United Nations Institute for Training and Research (UNITAR) and Unilever that will complement the bank’s ongoing partnership with International Trade Centre (ITC) which saw the bank launch a KSh. 10 billion fund in 2020 to advance credit to women-owned small and medium enterprises over five years.
The initiative is in line with the bank’s women agenda and commitment to providing over 1 million women entrepreneurs across the country with the necessary financial and non-financial support to scale up and take their businesses to the next level within 5 years.
These mentorship opportunities are based on research that shows a direct link between greater female participation in business and the workforce and higher productivity, better business dynamics, and financial outcomes. As an example, the International Labour Office (ILO) conducted a study in Kenya between 2013 and 2016 that found that weekly sales and profits among trained women entrepreneurs were 18% and 15% higher, respectively.
A clear diversity and inclusion agenda for financial institutions ensures better representation of women leaders at senior management levels and advocacy for quality pro-women policies, products, and programs. As a case in point, Absa Bank Kenya’s Women’s Network Forum recently launched the She Colleagues Mentorship Circles, in which 500 female staff will be mentored with 254 are already beingmentored over the next two months on critical issues that include career growth and development, personal branding and visibility, networking, stakeholder management, leadership and goal setting. To address Unconscious biases when supporting Women, the bank also in Partnership with IFC concluded a training where they trained 350 colleagues.
In summary, to protect and sustain recent gains, banks should lead discussions and campaigns that promote greater inclusion of women in Kenya’s economic affairs. With gender diversity at the forefront of business, financial institutions can create structures and cultures in which women and men entrepreneurs are valued and have an equal opportunity to challenge and succeed. In essence, closing the gender gap and providing more support to female entrepreneurs benefits everyone.