21 September 2021

Women-run businesses getting a boost in Rwanda and Zambia

by Deanna Ramsay / in Impact story

Small businesses are receiving support to access much-needed finance

The three winners of a recent competition for female-owned start-ups in Rwanda deal in avocado products, jams and juices. Their businesses have strived to survive the pandemic and now have received a bit of a cash boost of 3 million (US$2,980), 2 million and 1 million Rwandan francs, respectively.

Held to showcase the country’s women-run businesses that are aligned with the Made in Rwanda initiative, the Women Connect awards also serve to highlight the challenges women face in growing their small businesses, which include financial literacy and access to bank loans.

“What is needed most is knowing how to improve their business, and how they can design their own financial plans,” said Nadine Rutabayiro, Head of Women Banking at Access Bank in Rwanda, which hosted the awards.

“Sometimes the challenges being faced by women entrepreneurs start from the business ideation phase, they need to understand whether the business ventured into will be profitable and what strategies will be deployed to ensure profitability” she said.

Access Bank has been working with the International Trade Center’s SheTrades initiative to

help women entrepreneurs get financial plans in place, and the bank has a dedicated arm that offers loans to female-led small businesses.

In Zambia, the SheTrades initiative has been doing similar work with a group of 200 women over the last year and a half. They have helped budding fashion designers attend international trade fairsand have organized courses on supply chain management and e-commerce. The result has been a boon to business, with women reporting new deals and transactions amounting to US$ 3.46 million, as reported by SheTrades, and exports to 12 new international markets including Belgium, China and Australia.

Despite positive gains, financing remains a major issue for women in Zambia, said Albert Halwampa, Director of Export Development at the Zambia Development Agency, which works with SheTrades in the country.

“We work with women-run businesses that have the potential to be linked up to regional and international markets. Some of them already have access to loans but the issue is the high interest rates that range around 30-35%,” he said.

“Most of them don't want to borrow at such rates because they could end up losing their businesses. But if they had access to the right finance they could make quick gains,” he added.

Getting funding, in the form of development support or direct loans to businesses, isn’t easy. SheTrades works with a host of partners that includes Ministries of Trade in Rwanda and Zambia, international organizations and partnerships like the Enhanced Integrated Framework (EIF), and local financial institutions like Access Bank in Rwanda and Prospero in Zambia. One of the goals of SheTrades support is to spur other donors and the private sector to join in supporting small businesses in the developing world that have promise.

This approach is seeing results,  demonstrated by Access Bank’s three targeted cash awards and in-kind contributions leveraging  much needed expertise for trainings, as well as new resources coming in from the private sector. SheTrades Zambia has engaged with private sector partners as enablers, investors, and market partners to maximize the project's sustainability and reach.

This included a collaboration with DHL experts which served to leverage their technical expertise, logistics solutions, and market linkages. The project also worked with Stanbic Bank Zambia to secure a meeting room as an in-kind contribution to deliver workshops and events.

SheTrades Zambia has also received government support through housing the project and its activities at the Zambia Development Agency (ZDA) as a form of in-kind support. ITC’s National Coordinator has a dedicated office within ZDA’s premises.

For any business owner, a banking relationship is needed in order to grow, and especially if one wants to start dealing across borders.

“Our main objective is to empower women through financial support. In Rwanda the women- owned SMEs are not really growing at the same pace as the men because of a range of issues, including gaps in knowledge," said Rutabayiro.

“Another challenge faced is in finding collaterals to banks whereby they opt to go with microfinances where they are charged a lot. This creates delays to business growth, as the expenses are often far higher than the income earned." she said. 

For banks, such loans can be risky, which is why guarantees from the government or others are of great assistance. Access Bank offers a special W Power loan for businesses at the startup stage up to three years, offering between one million (US$990) to 50 million Rwanda francs, meant to strengthen young businesses with needed cash flows.

In Zambia, they are keeping an eye on more ways to promote small businesses and help them expand.

“In the end you find that they don't have enough capital to pump into the business so they can't expand. So they end up just operating in their small entities because there's isn’t a dedicated channel of robust finance for them to grow,” said Halwampa.

“We'll continue to leverage funds from partners because we don’t have enough for needed activities such as export promotion, market development, trade facilitation. That kind of support has a huge impact in terms of capacity building, and we will continue to promote women in trade and we hope we can help more women be able to sell their products overseas,” he said.


Any views and opinions expressed on Trade for Development News are those of the author(s), and do not necessarily reflect those of EIF.