Jennifer Hansel’s Post

I lead a major bank in Kenya. Here’s why we invest in Africa’s women entrepreneurs https://ift.tt/eo1yOlc I recently returned to my village in Bungoma County, Western Kenya. I had come to speak with the community—especially its women and girls—about how they could succeed as entrepreneurs and start or grow small businesses. I remember having similar aspirations earlier in my own life. It was only with my father’s support (and thanks to his work as a government-sponsored news reporter for the Kenya Broadcasting Corporation) that I was able to afford tuition for high school and eventually pursue my dream of a career in finance. My experience, however, was the exception. That day, as I looked into a crowd of hopeful faces filled with expectations amidst trying times, I saw former classmates who were striving to overcome daunting economic circumstances without access to financial resources. Some of them had been forced into marriage at as young as nine years old. For these women, economic survival is a daily challenge and the only way to remain valued and relevant within society. Barriers to entrepreneurship Within my community and across the African continent, entrepreneurship offers most women the greatest hope for opportunity and stability given the lack of employment options, particularly for their gender. One quarter of African women today are entrepreneurs, making them a powerful force for economic growth and social change. Yet, these women face significant barriers in accessing the capital needed to start and scale their businesses: Just a fraction of the continent’s available capital is granted to women. At a time when Africa’s economic growth has not kept up with its population growth, improving women’s access to capital has the potential to enable women to pursue their dreams and drive incredible benefits for families, communities, and the economy as a whole. We all benefit from investing in women and their businesses, but a range of barriers currently prevent African women from unlocking broader economic gains. Women entrepreneurs are savvy and resourceful, but many have never had access to education in financial literacy, preventing them from formalizing their business plans and record-keeping. In Kenya and throughout the continent, women entrepreneurs typically lack a book of accounts, or collateral such as land or other property that banks require to take out a loan or access credit. Compounding these challenges, there are currently no policies in place to differentiate how small, informal microfinance institutions should be treated compared to large banks. These small lenders are categorized as high risk due to their lack of formal structure, leading to significantly higher costs to serve them. This, in turn, disincentivizes loans to individuals with lower incomes or less available capital—predominantly affecting women. There is currently a $1.7 trillion gap between the amount of capital women around the world want and ...

Did you know that microfinance has its roots in 18th-century Ireland? In the early 1700s, an Irish economist named Richard Cantillon observed that small loans to impoverished individuals could stimulate economic activity and improve livelihoods. He coined the term 'microfinance' in his work, 'Essai sur la Nature du Commerce en Général' ('Essay on the Nature of Trade in General'). However, it wasn't until the 20th century that microfinance gained momentum as a tool for poverty alleviation. One of the pioneers was Dr. Muhammad Yunus, a Bangladeshi economist who founded Grameen Bank in 1976. Grameen Bank provided small loans, or 'microcredit,' to rural women in Bangladesh, empowering them to start businesses and lift themselves out of poverty. Since then, microfinance has expanded globally, with millions of people benefiting from access to financial services such as savings, loans, and insurance, often provided by institutions dedicated to social impact. It's a testament to the power of small-scale financial interventions in making a big difference in people's lives.

We see firsthand the positive impact that microfinance has on our women clients in Guatemala, but thanks to great organizations like our partner, Kiva, small loans continue to play a crucial role in the fight against poverty and economic empowerment worldwide. The Borgen Project reports: https://loom.ly/D-FdnoY #Microfinance #Microloans #Microentrepreneur #MicroEntrepreneur

Women in Africa face a USD$42bn financial gap. We need to let that sink in... Finance is generally hard to come by in Africa, especially for women with small businesses. Data estimates that a quarter of African women are engaged in one entrepreneurial activity or the other. Lending to women is thought to be riskier, resulting in them paying higher interest rates than men, and a history of gender imbalance means women do not have collateral and other guarantees that traditional financial institutions require. Africa's regulatory and legal systems are also a hindrance and disadvantage to women-owned businesses, and yet, according to the African Development Bank Group, women are more likely to repay loans. They are also known to reinvest up to 90% of the proceeds from their business in food, health, education, and other social and economic necessities for their households. Now some good news. Affirmative Finance Action for Women in Africa (AFAWA), an initiative of the African Development Bank Group, supported by the Women Entrepreneurs Finance Initiative (We-Fi) and participating G7 countries is looking to support women and increase their productivity to fully participate in the GDP of the African economy. https://lnkd.in/dMR7SChg #africa #women #finance #funding #G7 #support #smallbusiness #entrepreneurs #economy

Having witnessed firsthand the impact micro-finance can have on individuals and communities, I am inspired by the stories of empowerment and resilience that emerge. Financial Inclusion for All: Microfinance is a catalyst for financial inclusion, breaking down barriers for those traditionally excluded from the formal banking sector. It offers a lifeline to low-income earners, women, and rural populations, providing them with access to savings accounts, credit facilities, and insurance products. Poverty Alleviation through Entrepreneurship: Microfinance is a powerful tool in the fight against poverty. Small loans empower individuals to start businesses, invest in education, and access healthcare. As these ventures grow, so does employment, contributing to broader socioeconomic development. Empowering Women: One of the most remarkable aspects of microfinance is its ability to empower women. By providing financial resources and opportunities, it enables women to take charge of their economic destinies. This empowerment extends beyond financial gains, fostering gender equality and enhancing decision-making power within households and communities. Catalyzing Community Development: Microfinance isn’t just about individual impact; it’s about community growth. Economic success translates into improvements in infrastructure, healthcare, and education. It cultivates a culture of entrepreneurship, sparking local economic development and creating a positive ripple effect. Building Social Cohesion: Microfinance fosters social cohesion by creating networks of trust and cooperation within communities. Group-based lending models encourage solidarity among borrowers, creating a support system beyond financial assistance. Let's celebrate the incredible strides microfinance is making in transforming lives. I invite you to share your thoughts and experiences on the impact of microfinance. Together, we can continue to champion financial inclusion and sustainable development. #Microfinance #FinancialInclusion #Empowerment #SustainableDevelopment #CommunityImpact

Exciting news from KCB Bank Group Kenya! They've secured €30 million (Sh4.2 billion) from the Bill & Melinda Gates Foundation and the European Investment Bank (EIB) to empower women entrepreneurs and startups in Kenya. This funding will be disbursed through KCB's Female-Led and Made Enterprises (FLME) and the KCB 2jiajiri programmes, aiming to create flexible, accessible, and affordable funding solutions for women entrepreneurs. Through FLME, KCB has already disbursed loans worth Sh116 billion to over 600,000 female customers, constituting 35% of their SME loan book. KCB Bank Kenya Managing Director, Annastacia Kimtai, emphasized the importance of addressing banking's gender gap, highlighting the potential for significant economic growth by promoting female financial inclusion and access to credit. Greta Bull from the Bill & Melinda Gates Foundation also stressed the need for more and better credit access for women, noting that this partnership will transform Africa's banking landscape and drive economic growth. This initiative, supported by a partial guarantee from the European Union (EU), is a significant step towards empowering women in business and fostering economic growth in Kenya and beyond. #WomenEntrepreneurs #Empowerment #FinancialInclusion #EconomicGrowth #Hakunamatatamedia

Microfinance Across Borders: Exploring Global Impact 🌐 Fun Fact Friday! Explore the global impact of microfinance with us. Your small donations have a ripple effect, reaching communities worldwide. 🔄 • Household Level: Microfinance leads to increased household income through diversified income sources or enterprise growth. Access to financial services enables asset building and better management of risks, helping to maintain material well-being during crises. • Individual Level: For women, microfinance provides money management skills, greater control over resources, and access to knowledge, leading to economic empowerment and increased self-esteem. Microfinance clients tend to have higher savings levels, which are crucial for asset building. • Enterprise Level: Microfinance services contribute to rising enterprise revenues. However, loans are often used where the perceived need or return is highest, rather than in the specific enterprises for which they were taken. While job creation in single-person enterprises may be minimal, client households often create work for others. Microfinance, with its global reach and transformative potential, is instrumental in alleviating poverty and fostering economic empowerment. Source: CGAP (Consultative Group to Assist the Poor)

I read "Beyond the Formal: A New Paradigm for Socioeconomic Prosperity" and it is brilliant. As a twenty-year microfinance credit expert who spread solidarity group lending around the world, my interest now is understanding of ROSCAS - revolving savings circles - that are more important for those at the bottom of the pyramid than all the institutional financial options. Extrapolating from Findex 2021 there are 421 million people most of them poor who are amassing useful lumps of capital in these groups without paying a penny of interest, three times the number of microfinance borrowers. If you add the money mobilized by twenty-five million savings circles, (40 billion per year), the money mobilized by 83 million immigrants using ROSCAS they learned in their home villages (400 billion per year) plus remittances - (527 billion to poor countries alone) - you come up with a trillion-dollar informal economic system that operates without our "expertise" and financial support. Who better to involve the two billion who do not save at all in the developing world than the leaders of these groups. We are testing this approach, and the results are jaw dropping https://lnkd.in/et6Yu8w https://lnkd.in/ebKuautB   https://lnkd.in/e-RaX7Xw   https://lnkd.in/egUNzDex Grassroots Finance Action https://lnkd.in/et6Yu8w

Targeting Investment: F4R’s blended finance @USAID's CATALYZE Finance for Resilience program is empowering women entrepreneurs in Burkina Faso, like Lamoussa Dabilougou. With access to loans and financial training, Dabilougou has seen a 75% increase in profits from her peanut processing business. This is a success story that highlights the impact of targeted investment in emerging markets. https://lnkd.in/evWkhJwz