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9.4 Recommended actions – access to credit and micro-finance: Support for Growth-oriented Women Entrepreneurs in Tanzania, 2005
Recommendations to alleviate some of the challenges encountered by women in
accessing credit to support the growth of their enterprises are presented for each of three
levels of intermediaries – micro-financing operators, financial institutions and
(i) Raise ceilings on micro-finance lending limits
The low lending limits currently in place tend to undercapitalize MSEs at the startup
level, thus fostering low or no growth-potential venture creation. At present, most key
informants report that women requiring loans in excess of Tshs 5 million are referred to
financial institutions having lending conditions, which in most cases cannot be met by
(ii) Increase the level of lending services to individual women clients
Tanzania does not report any financial institution specifically focused on the
women’s market. Although key informants reported variability in the percentage of
women clients (CRDB – 47 per cent, PRIDE Tanzania – 68 per cent, the Tanzania
Gatsby Trust – 80 per cent, SIDO – 56 per cent), reach is a critical issue. As the major
MF providers, these organizations are providing financing for less than 250,000 women.
With promotional efforts to raise awareness of Tanzanian women’s contribution to the
economy, financial institutions should be encouraged to set objectives for reaching
(iii) Provide gender sensitivity training to credit officers
Women are different – they don’t think as “big” as their male counterparts and often
are more cautious. Account managers and relationship managers need to understand how
to work with these clients, identify client needs, and coach women in the lending
approach process. Gender mainstreaming workshops will help them recognize any
gender bias they may have in their policies, procedures, perceptions or approaches.
(iv) Improve the level of information among women entrepreneurs regarding financing
programmes and services
Produce a Guide to Financing for Women Entrepreneurs, designed to impart basic
information to women-owned MSEs on sources of financing, terms and conditions,
preparing financing proposals, and negotiating for credit. The Guide should be
distributed widely throughout the country, in both English and Swahili, and supported by
information sessions, perhaps delivered in partnership with women’s associations. The
purpose is to get the message out to women-owned MSEs in order to improve their
ability to source financing.
B. Financial institutions
(v) Develop financing programmes tailored to the needs of growth firms
Women entrepreneurs require different levels of financing interventions at various
periods during the growth of their firms. Examples are working capital loans, receivables
financing, and quasi-equity products.
(vi) Establish a reserve for women entrepreneurs
Set corporate portfolio targets and establish individual account manager loanwriting
objectives for women entrepreneurs.
(vii) Implement training programmes designed to sensitize account and relationship
As noted above in the micro-finance recommendations, incorporate sensitivity
training to the women’s market for newly hired and existing staff.
(viii) Be more proactive in developing the women’s market
Ensure that marketing materials are gender sensitive. Seek opportunities to partner
in women-focused initiatives.
(ix) Help women develop business plans for bank financing and negotiate better
The onus is not only on lending institutions; women also have to be oriented in the
art of dealing with banks and packaging their loan requests for financing. Women need to
learn how to approach and negotiate with financial institutions, know the lender’s
information requirements and how to prepare financing project proposals.
C. Government policy
(x) The Government should implement the SME loan guarantee programme proposed in
the SME Development Policy.
(xi) The Government should set up government-backed women’s credit guarantee
programme for individuals growing beyond the micro level.
(xii) A loan guarantee fund would serve to reduce the risk to banks in cases of limited
collateral, often the situation facing women entrepreneurs.
(xiii) The Government should examine the take-up of government financial assistance to
female versus male-owned enterprises and take steps to address any gaps.
(xiv) The Government should undertake dialogue with lending institutions on women’s
access to credit with a view to making more credit available to this part of the MSE
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6.0 References: Microfinance in Africa - Experience and Lessons from Selected African Countries
16.0 Closing comments: Support for Growth-oriented Women Entrepreneurs in Tanzania, 2005
1.0 Introduction: Microfinance in Africa - Experience and Lessons from Selected African Countries
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15.0 The state of research on women in MSES in Tanzania: Support for Growth-oriented Women Entrepreneurs in Tanzania, 2005
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