Investment body to help women dig roots in business

By Luke Anami

Female entrepreneurs are not often in venture networks, making them miss out on business opportunities.

Kenya Investment Authority is planning to change all this through the provision of free information of business and investment opportunities in Kenya to women.

The investment body plans to launch a business development service targeting small-scale women traders.

The services will focus on how women can access important information and financing on investment and will be rolled out at the district level to reach more women.

Significant Component

"The level of involvement of women in investment is very low. However, we have lined up business development service programmes that will soon be launched at the district level," Ms Susan Kikwai, the Managing Director of the Kenya Investment Authority said.

"We want to target women in our investment plans as they form a significant component of the SMEs."

Studies show one of the main issues facing women setting up business is raising start up capital. It turns out women obtain one-third of the funding that men secure when starting up their business.

They get less when they approach banks for a loan, but they also acquire less informal venture capital.

Consequently, they fail not only to get adequate financial support and guidance and access that venture capital can provide to the companies invested in.

According to Ms Kikwai, even though women are interested in the capital, they are not acquainted with the procedures to get access to these financial resources.

This may be caused by a lack of network or by gender issues, as well as the fact that the start-up size of businesses run by women is smaller than that of men.

Capital Requirements

A notable finding in research is that female entrepreneurs often start in business sectors with low capital requirements such as the service sector.

Second, women are believed to make more use of their own resources, with the exception of money borrowed from family and friends, and less of debt financing such as informal venture capital.

Therefore, less informal venture capital needs to be acquired from informal investors, a factor that the Kenya Investment Authority is exploring. "Because women are important contributors to our economy and since in many occasions venture capital enables an entrepreneur to move its business to a higher level, it is important that women get the necessary finance," she said.

During the recent years remarkable trends have occurred in the economic sector despite the effects of a global financial crisis. She there is a growing interest by investors in Kenya that has created a strong and ripe business environment for women.

There is a growth of small entrepreneurs worldwide and an increasing number of women that have started their own business.

"Women’s share of business ownership is growing. However, most of them lack a business enabling environment as well as venture capital for businesses," Ms Kikwai said.

Capital Available

"We have managed to get capital of Sh. 188.6 billion in this financial year spread across various ministries targeting entrepreneurship at various levels," she said.

She said the sectors targeted for growth include manufacturing, agro-processing and tourism. The authority will identify opportunities where women will receive more attention.

Having access to capital markets requires knowledge about who has capital available and for what purposes, a challenge many people have to overcome.

In reality however, this knowledge is not perfectly available and female entrepreneurs often find themselves at a disadvantage, because they are not part of the important networks that play a role in the capital markets.

In comparison to their occasional lack of knowledge having a solid business plan and growing potential of their business, this makes that investors do not tend to invest in women entrepreneurs.

"We can do more with the resources at the District level. There is government support at ministerial levels which young entrepreneurs can capitalise on," Ms Kikwai said.