Harassment, corruption, and heavy taxes are pushing millions of women traders to operate under the radar, a new report says.
The report by MicroSave Consulting (MSC) says women traders prefer to evade authorities or pay a temporary fee rather than get a permanent licence.
"They manage multiple transactions using multiple channels throughout the day and use mental models to make financial decisions," says the report, which was funded by the Bill and Melinda Gates Foundation.
MSC interviewed 6,000 women-led micro and small enterprises (WMSEs) in open-air markets and cross-border traders in Nairobi (Gikomba and City Markets), Busia (Malaba), Mombasa (Kongowea), TaitaTaveta (Taveta), Kisumu, and Meru (Gakoromone and Makutano).
According to the report titled Women in Open-air and Cross-border Trade in Kenya: Insights From the Financial diaries Research, a majority of respondents said they prefer keeping money at home, informal savings (groups or chamas), M-Shwari and Saccos.
M-Shwari is a savings and loan service that enables M-Pesa customers to save as little as Sh1 and access credit from Sh1,000.
The report says women traders have "a very dynamic and frequently complex financial life," where a good number believe informal channels are good for saving.
The downside of this is that they are unable to access credit facilities since they can't defend their transactions when looking for loans from formal financial institutions.
"The lack of collateral is a challenge. Hence, most female traders prefer the group-lending models of banks. Their second choice is informal groups as these offer flexible repayment models," says the report.
"For the traders across the border, most have some form of licence to trade across the border. For the open-air market, they generally lack a licence and prefer to evade authorities."
Most women, according to the report, are engaged in agriculture, forestry, fishing, services, manufacturing, transport and storage, accommodations and food service activities.
"We have 2.02 million female business owners in the wholesale and retail business against 998,116 male business owners. They are more vulnerable to issues like the police or customs officials unlawfully confiscating their goods or compelling them to pay bribes," says the report released earlier this month.
The report notes that women in the open-air markets saved in their own savings account (32 per cent), microfinance institutions (39 per cent), merry-go-round (29 per cent), and cooperatives/Saccos (seven per cent).
The research intends to resolve constraints and open opportunities for digital financial services for women-led micro- and small enterprises (WMSEs) operating from open-air and cross-border markets in Kenya.