Vusumuzi Dube
WOMEN account for 57 percent of the owners of Micro, Small and Medium Enterprise (MSME) businesses in Zimbabwe but continue being excluded from the formal financial services sector, an official has said.
In a presentation on expanding the horizons for women’s access to venture capital during the virtual Women’s Business Leadership Round-table (2021), Reserve Bank of Zimbabwe (RBZ) deputy governor, Dr Jesimen Chipika said women-owned MSME startups continue to face challenges.
“MSMEs in Zimbabwe employ approximately 5,7 million people and contribute more than 50 percent to the country’s Gross Domestic Product. Women account for 57 percent of the owners of MSME businesses in the country, and yet many are excluded from the formal financial services sector. Gender dimensions affect women a lot, as worldwide, male operated start-ups receive more venture capital than females,” said Dr Chipika.
She said according to the International Finance Corporation (IFC, 2020) female-led startups in emerging markets received only 11 percent of the world’s venture capital seed funds in 2020, and five percent of later stage capital.
Dr Chipika said with 66 percent of the MSMEs located in the rural areas and more than 40 percent of them relied on informal financial products and services, women should work towards registering their businesses so that they can be able to access venture capital.
“In terms of strategies to increase women owned businesses access to venture capital, most women-led MSMEs in the micro and informal categories need an accelerator or incubator programs to lift them up to the start-up stage.”
Dr Chipika said there is need to migrate or graduate millions of women-led micro enterprises, from informal to formal. She noted that many women are not in the venture capital space yet, and quite a number are not aware of those venture capital opportunities.
“So financial literacy programs are key and thereafter – begin to address issues of venture capital raising. Hence, the RBZ launched the National Financial Inclusion Strategy in 2016 to assist women ventures. Also, it has setup incubation and innovation hubs and other supportive infrastructure to support women and youths as well.”
Dr Chipika said there was need to focus attention on areas of fintech which have more direct impacts on women.
She said there was need to promote partnerships between mobile network operators (MNOs) and Micro finance Institutions (MFIs), to develop and deliver venture capital solutions to women-led enterprises in particular.
“MFIs can also partner software companies to develop mobile phone based applications that can improve the quality and convenience to women group savers, small borrowers etc. Among others also address digital financial solutions (DFS) supply-side, regulatory, and societal and market infrastructure constraints, for example Interoperability in mobile money,” said Dr Chipika.
According to the financial inclusion indicators for women and MSMEs in Zimbabwe, the statistics she shared showed that the number of women with bank accounts stood at 2, 758, 922 in March 2021 compared to 769, 883 in December 2016.
The CEO Africa Roundtable hosted this year’s Women’s Business Leadership Roundtable (2021) virtually due to the Covid-19 pandemic restrictions and regulations. It was held under the theme, ‘Women unlocking new frontiers.’
Online Reporter