9.2 Barriers to financing women entrepreneurs: Support for Growth-oriented Women Entrepreneurs in Tanzania, 2005

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References: Learning to change: Skills development among the economically vulnerable and socially excluded in developing countries - By International Labour Organization

Although women entrepreneurs have consistently proven to be good credit risks (as
a result of good repayment histories), limited access to credit for both new and growing
women-owned firms is confirmed by researchers and key informants as a major
constraint. Two-thirds of women entrepreneurs in the ILO (2003) study used their own
savings to start their businesses, followed by assistance from their spouse (32.8 per cent),
credit from family and friends (21.1 per cent), credit from a micro-finance institution (8.6
per cent), credit from a bank (3.9 per cent) and credit from a moneylender (0.8 per cent).
As their businesses grew, they depended even more on their own savings (78.0 per cent),
as well as micro-finance credit (25.0 per cent) and bank credit (10.2 per cent), and less on
money from their spouses (1.6 per cent), and family and friends (12.5 per cent).

Only half of the women who applied for bank credit were successful (ILO, 2003).
The most commonly cited problems were cumbersome procedures, high interest rates
and the requirement for 125 per cent loan collateral. Since Tanzanian women are often
denied control over property, either because of property laws or traditional customs, they
are unable to meet these collateral requirements. In addition, the women entrepreneurs in
the ILO (2003) study felt that bank officers did not take them seriously, doubting
whether they would repay the loan. Their success rate in obtaining credit from an MFI
was 75 per cent, but in some cases the micro loan ceiling was too low to be of much value. Interest rates are variable and often go higher than 30 per cent. Factors such as
these are detrimental to the start-up and growth of women-owned firms.

Consequently, women start businesses with the money they are able to put together
from their own savings and personal networks. This affects their capacity to start
businesses of any magnitude, and hampers their ability to grow quickly, if at all. Key
informants all stressed the importance of introducing a loan guarantee programme for
women entrepreneurs in order to help overcome their lack of collateral security.

Another constraint to women’s access to credit is the low level of awareness of
financing amongst women in the MSE sector. Key informants stressed the need for
training women micro-enterprisers on dealing with financial institutions and preparing
and presenting a loan application, and for linking credit with business development
support.

1.2 Mission Objectives: Support for Growth-oriented Women Entrepreneurs in Tanzania, 2005

8.0 Promotion of women’s entrepreneurship: Support for Growth-oriented Women Entrepreneurs in Tanzania, 2005

1.3 Methodology: Support for Growth-oriented Women Entrepreneurs in Tanzania, 2005

4.0 The state of women’s enterprises in Tanzania: Support for Growth-oriented Women Entrepreneurs in Tanzania, 2005

1.1 Background and Introduction: Support for Growth-oriented Women Entrepreneurs in Tanzania, 2005

Women Small Business Loans

6.1 The informal sector: Gender Entrepreneurship and Competitiveness in Africa 2007

16.0 Closing comments: Support for Growth-oriented Women Entrepreneurs in Tanzania, 2005

10.0 Training – business management and technical skills: Support for Growth-oriented Women Entrepreneurs in Tanzania, 2005

5.4 Inclusion of women in the SME Development Policy: Support for Growth-oriented Women Entrepreneurs in Tanzania, 2005

15.0 The state of research on women in MSES in Tanzania: Support for Growth-oriented Women Entrepreneurs in Tanzania, 2005

1.0 Overview: Gender Entrepreneurship and Competitiveness in Africa, 2007

Loans For Women Business Owners

7.0 Policy/programme coordination and leadership: Support for Growth-oriented Women Entrepreneurs in Tanzania, 2005

Franchise Businesses Appeal to Women Entrepreneurs

Business Coaching For Women Entrepreneurs Is On The Rise

9.3.3 Other micro-finance providers: Support for Growth-oriented Women Entrepreneurs in Tanzania, 2005

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References: Learning to change: Skills development among the economically vulnerable and socially excluded in developing countries - By International Labour Organization

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As the world's only tripartite multilateral agency, the ILO is dedicated to bringing decent work and livelihoods, job-related security and better living standards to the people of both poor and rich countries. It helps to attain those goals by promoting rights at work, encouraging opportunities for decent employment, enhancing social protection and strengthening dialogue on work-related issues. The ILO is the international meeting place for the world of work. We are the experts on work and employment and particularly on the critical role that these issues play in bringing about economic development and progress. At the heart of our mission is helping countries build the institutions that are the bulwarks of democracy and to help them become accountable to the people. The ILO formulates international labour standards in the form of Conventions and Recommendations setting minimum standards of basic labour rights: freedom of association, the right to organize, collective bargaining, abolition of forced labour, equality of opportunity and treatment and other standards addressing conditions across the entire spectrum of work-related issues.
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9.2 Barriers to financing women entrepreneurs: Support for Growth-oriented Women Entrepreneurs in Tanzania, 2005

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