The Challenges of Growing Small Businesses - International Labour ...

ange of imported goods coming into the market at all levels. Issues of quality and
delivery are the same for all microenterprises, but women face additional gender-based
issues concerning mobility – which in turn relate to their dual (household) and triple
(community) roles which constrain their time and determine whether it is acceptable for
them to travel outside of their communities. As the Tanzanian research noted: “while
male entrepreneurs can travel long distances to do business, most women are inhibited
by traditional roles, domestic responsibilities and cultural values” (UDEC, 2002, p. 16
and Toroka & Wenga, 1997). Both the Zambian and Ethiopian research also noted that
localized market coverage characterized women’s enterprises in their respective
countries. The Tanzanian research also noted that very few support agencies and
initiatives exist to assist with marketing issues, and those that do exist have poor
outreach beyond the major urban areas. This is particularly problematic and
disadvantageous for women based in rural areas (UDEC, 2002).
f) Women’s businesses are under-capitalized and generate limited profits if any at all,
which means that they have little opportunity for capital accumulation and are
vulnerable to the slightest changes in their business environment. Several studies
referenced in the secondary research found that most women entrepreneurs used
personal savings, loans from friends and family, and informal lending schemes to fund
their businesses (Parker, 1996, Hadiya, 1998 and UDEC, 2002). Accessing appropriate
forms and levels of finance is seen as a major issue for women, and critical to the
development and growth of their enterprises. This need arises as a result of explicit and
tacit gender issues relating to various factors noted above, i.e. women’s businesses tend
to be seen as “too small”, require small amounts of money, and are in sectors that do
not attract funding. There are however several key issues linked to women’s ability or
inability to unlock formal financial support, as indicated below.
• Women are less likely to own land or premises, and hence they lack the necessary
collateral required by formal financial institutions, particularly banks. Longitudinal
studies of women’s microenterprises in Lusaka in the 1970s and 1980s found that,
“the overwhelming majority of women traders have no possibility of expanding
entrepreneurship. Those whose itinerant activity is sporadic can hope for a market
stall, those with stalls can hope at most to keep them” (Schuster, 1982 and JUDAI,
2002, p. 26). Despite this, women are viewed as more conscientious about
repayment of loans and considered less “risky” by micro-credit organizations, many
of which focus their services directly at women (UDEC, 2002).
• Micro-credit organizations targeting women, often do so through group lending or
group-based collateral arrangements (Chijoriga, 2000). Whilst this suits some
women it does not suit all, particularly those that are growth-oriented (Hadiya,
1998).
• Low levels of literacy are said to limit women’s ability to produce the sort of
written business plans and loan proposals that are required by banks.
• Women are viewed as having less experience of using banks and financial services,
and therefore have less knowledge and understanding of how to approach banks for
loans, as well as little awareness of the requirements of the banks. Lack of
exposure to banking practice can result in a lack of confidence when it comes to
making approaches for loans. In Ethiopia the research findings endorsed this, and
indicated that this also meant that as a consequence women entrepreneurs were
more vulnerable to the exorbitant interest rates and unfair practices of the local
money-lenders, known as “Arata Aberdai” (Hadiya, 1998).
g) Women also have businesses which are labour intensive and make minimal use of new
technology – be this information technology or production and process technology.
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