Banks must focus on the impact of women’s ventures, not profits

Wednesday November 13 2019

To make it work, women seem to have relied on informal sources of finance, including their own savings and loans from friends and family. PHOTO | FILE| NATION MEDIA GROUP


In my conversations with women running businesses in the country, it is apparent that financial institutions must recalibrate their thinking and correct their misperceptions about female consumers.

These misperceptions have birthed an ingrained feeling that financial partners and policymakers have a biased view at investing in women as an opportunity to create real socio-economic impact, not charity.


Furthermore, Africa leads the world in having more women than men choose to become entrepreneurs — and Kenyan women own 33 per cent of all SMEs or slightly above 517,000 businesses, according to a report by the International Finance Corporation (IFC).

The women counsel that the female economy, comparable to the male one, is laden with attitudinal differences that, if taken to account, and acted on, can generate positive returns with minimal investment.

The common misperception fronted against developing a banking programme for women is that their attitude to finance differs little from men. That’s not true. Women are a more cautious lot when it comes to risk and reward. This means they have a higher propensity to saving and, therefore, guarantee a fluid base for banks.


Women value deep relationships more, as compared to men, want a relationship with a bank and are transactional and easily impressed by products. They are magnetised by experiences and consequently act on the recommendations of peers and friends. Therefore, women are an important source of referrals.

Women also tend to make decisions when well informed, especially with investments.


The second misperception is that all banking products for the female economy have to be feminised — this manifesto, yarned through products and services, is far from the truth. Most female businesspeople feel that the real value lies in shared impact — like improved access to financial services, knowledge and networking opportunities to make a women’s programme successful.

An unappreciated financial opportunity in women’s banking is another myth. In fact, women’s markets are profitable opportunities; they are just underserved and worsened by lack of knowledge of financial products. The opportunity cost for banks in this space is exemplified by existing credit facility gap, which, according to McKinsey and IFC, is about Sh28,7 trillion ($287 billion) for woman-owned SMEs.

To make it work, women seem to have relied on informal sources of finance, including their own savings and loans from friends and family.

How do banks redeem themselves? Interestingly, most female business owners I have talked to have their convictions spot on, a doctor-heal-thyself approach. They believe a successful women’s programme needs leaders of those institutions to be involved, aligned and championing those programmes, followed by across-board internal buy-in.


They also feel the need to see a deliberate effort to ensure all employees, especially the male ones, are involved and see the value in a women’s programme. They also consider the diversity and inclusion as an essential prerequisite to development of a women programme.

Granted, banks can rise to the challenge, rethink their approaches and create equal access and opportunities for woman-owned businesses. The financial sense in this is, through levelling the playing field for both men and women, massive strides will be made in eradicating biting poverty.


In addition to the financial support, banks have to demonstrate their guarantee that they can grow together and have faith in women, have aligned visions for their business and are willing to go the extra mile in providing the necessary ‘muscle’ beyond the traditional banking services.

The biggest return in this is to create a multiplier effect in societies across Kenya that will make the desired change to drive the economy forward.

Ms Njoroge is external affairs and communications manager, Stanbic Bank. [email protected]