Diagnostic Study on Access to Finance for Women.pdf - IFC

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NOVEMBER 2006 Foreword Annex 4 and 5 I t is my personal and professional belief that facilitating equitable and easy access to finance is key for us to unlock the entrepreneurial potential amongst South African women. Fortunately, this view was well supported by women all over the country who actively participated in our consultation drive as part of developing the draft National Strategic Framework on Gender and Women’s Economic Empowerment. Historically, the financial markets have always been gender blind, thus becoming the major obstacle for women to start, grow and strengthen their enterprises. As noted in the Financial Sector Services Charter, the financial sector is characterised by low levels of participation, meaningful ownership, control, management, as well as low levels of skilled positions occupied by black women. Part of creating a favourable environment for growing women’s entrepreneurship in South Africa, it is required of us to come up with empirical factual research on how the financial markets have been engaging with women in the new South Africa. We also wanted to establish more facts as to how both these financial markets, together with our economic policies, have brought about the desired impacts in as far as transforming our economy is concerned. Through this study, we now have a clear picture with Malibongwe! Ms Elizabeth Thabethe: MP Deputy Minister of Trade and Industry answers on how and what it is that needs to be done by the government in partnership with the private sector to be able to ensure that women are enabled to be fully represented whilst actively participating in our economy. I trust that all you readers will find it useful and that you will work together with us in your own way in making the South African financial markets more supportive to women entrepreneurs. Our economy needs both its men and women to grow. Annex 4 KEY FINANCIAL INDICATORS OF TWO MFIs KEY FINANCIAL INDICATORS FROM THE SMALL ENTERPRISE FOUNDATION 2003-2006 June 2003 June 2004 June 2005 June 2006 (Projected) Active Clients 18 812 22 110 27 538 35 446 Portfolio Outstanding R13.5m R19.1m R26.4m R32.2m Portfolio at Risk > 30 days 1.1% 0.2% 0.2% 0.5% Repayment Rate 98.5% 98.7% 99.6% 99% Operational Self-sufficiency 78% 100% 100% 100% Financial Self-sufficiency 76% 94% 92% 95% Loan Loss Rate 1.5% 1.3% .4% 1% KEY FINANCIAL INDICATORS FROM MARANG FINANCIAL SERVICES 2001-2005 Indicators March 2001 March 2002 March 2003 March 2004 March 2005 No. of borrowers 5,132 13,153 15,683 21,691 26,244 No. of groups 1,027 2,645 3,293 4,439 5,358 Portfolio outstanding 2,734,965* 7,820,167 9,605,563 15,582,682 20,440,559 Repayment rate 100% 98.03% 97.7% 98% 94% Portfolio at risk > 30 days 0% 1.18% 1.2% 1.47% 5.01% Loan loss rate incl. death 0.16% 0.53% 1% 1% 2.2% Loan loss rate excl. death 0% 0.28% 0.50% 0.41% 1.5% Operational Self-sufficiency 9.91% 61.98% 71.93% 87.37% 116.91% Financial Self-sufficiency 9,91% 58.17% 63.21% 82.72% 112.14% * All currency is in ZAR Annex 5 BDS INSTITUTIONS INTERVIEWED Types of Institutions State sponsored Independent Commercial Providers Educational Institutions NGOs Institutions Interviewed Red Door – Western Cape – Atlantis branch – provides a generic “one-stop shop” Thuso Mentorship Scheme – a national programme of Khula Enterprise Finance Limited – interviewed in Centurion and Midrand The Innovation Hub – in Pretoria – technology business incubator Enablis – predominantly ICT sector based, offering an integrated model based in Western Cape and Gauteng Business Skills South Africa – based in Pretoria – SMME training programme Unilever Foundation UCT Business School – Cape Town – integrated model which offers pre- and postloans support Nations Trust – Gauteng – pre- and post-loan support to micro and very small enterprises to support their loan programme services for youth Micro MBA – based in Cape Town but with a national footprint ANNEX 4 AND 5 89
Acknowledgements T he diagnostic study on Access to Finance for Women Entrepreneurs in South Africa was undertaken at the request of the Gender and Women’s Economic Empowerment Unit of the Department of Trade and Industry of South Africa. The Department of Trade and Industry has played a leading role in asserting the centrality of Black Economic Empowerment in transforming the racially divided economy of South Africa and eradicating the legacy of apartheid. There is a realisation, however, that, while race has historically been the primary driver of economic disparities in South Africa, other forms of discrimination also prevent certain groups from accessing economic freedom and opportunity. Women, who represent 52% of the South African population, still suffer from historical and cultural prejudice in accessing opportunities, for a number of reasons that are outlined in this study. While access to financial services continues to be largely racially defined in South Africa, the gender gap between men and women does exist, and is likely to grow if special efforts are not undertaken to address the underlying issues now. The mandate of the International Finance Corporation (IFC) is to promote and support private sector development in developing countries. Support to the financial sector is central to the IFC’s strategy, given the primordial role played by financial markets in any economy, be it emerging or established. The IFC established the Gender Entrepreneurship Markets (GEM) programme in December 2004 in order to mainstream gender in its key priorities. It is our honour for GEM to have been able to produce this initial study on behalf of the Department of Trade and Industry, and we trust that its findings will be a catalyst for continual work on this theme in South Africa. Finmark Trust generously co-funded the analysis of data from their Finscope Household Survey 2005, with Ilana Melzer of Eighty 20 being responsible for the breakdown of this data as well as that of the 2004 Labour Force Survey. Our appreciation goes to Anne Marie Chidzero who enabled Finmark’s participation in and support of the project. Ms Sharda Naidoo and Ms Anne Hilton, independent consultants in the sectors of access to finance, business development and gender, conducted primary and secondary research for the other chapters of the report and ran focus groups in several provinces of the country. From the IFC, Natalie Africa, GEM’s Africa co-ordinator, was responsible for management and final editing of the overall report, which was funded by the GEM unit, headed by Amanda Ellis. We would like to extend our appreciation to the various respondents who agreed to be surveyed and interviewed for this study. These include political and regulatory authorities, financial institutions, business development service providers and credit bureaus. Most of all, we thank the women entrepreneurs, their associations and institutions who availed of their client base, time and experience to share their challenges, hopes and successes. We trust that the information shared in this study will contribute towards creating a business environment that supports you in your efforts to transform and grow the South African economy. International Finance Corporation Johannesburg 2006
Page 1: NOVEMBER 2006 diagnostic study on a
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INSTITUTIONAL SURVEY 51
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• Unwillingness to commit resourc
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Ntsika and Khula. The lack of an in
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limits their business options consi
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usinesses and personal safety will
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perspective. BDS aimed at the micro
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5.5.2 Women in Small and Medium Ent
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not assessed on the potential of th
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an expectation of repayment. The bi
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• Credit granting institutions su
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• The men in consortiums tended t
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One of the issues raised in terms o
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WOMEN’S VIEWS ON PROCUREMENT AND
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7.3 Key Conclusions on BEE Financin
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Key Issues Recommendations Responsi
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RECOMMENDATIONS 81
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Mamashela M., (2004): New laws: The
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Name & Surname Business Telephone F
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Name & Surname Business Telephone F
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