I HAVE been trying to set up a women’s fund for the past five years but I have always been afraid of the start-up costs.
While running a private equity fund in Nigeria, I came to the realisation that Africa needs financial institutions focussed on the well-being of women who are the most disadvantaged members of society. Women are in the majority in Zimbabwe as well in most of Africa and they are responsible for the well-being of their families.
As a property investor, my experience is that women make a better business risk. For decades my family has been in the hair salon business, where women make up the majority and they generally pay their bills on time. The men are in the minority but most landlords will agree that they are the most difficult tenants. At the end of the month a lot of men are too busy with wine, women and song to take care of their responsibilities.
Men get easily carried away when they have money or power. All over Africa, ordinary women amaze me with their resilience as they quietly work hard to put food on the table. In the hair and beauty business there is a tradition of apprenticeship in which experienced stylists train juniors until they can afford their own stations. I often see pregnant women stand on their feet all day braiding hair up until they given birth then return to work a couple of weeks later.
August is Women’s Month and African women all over the world work hard in small businesses with no help from the banking industry. I am always ahead of the curve when it comes to business trends and eight years ago when I had pitched the idea of a microfinance institution (MFI) to investment banks in Zimbabwe I got turned down. So I took the job to run a private equity firm in Lagos and by the time I came back in 2014 there were over 200 MFIs in Zimbabwe already.
The problem with micro-lenders is that they are dependent on payroll deductions so anybody with a pay-stub could get loans from several institutions and there are not many people who hold jobs in Zimbabwe. I wrote the business plan for a women’s fund in 2014 then started applying for development finance institution (DFI) and donor funding.
I tried applying for the Harare-based Africa Capacity Building Foundation annual grant for non-profits but I never received any feedback from them.
I applied to several international donors as well and came to the conclusion that the donor community likes to donate aid to Africa but not businesses in Africa. Most of the aid is technical assistance and capacity building but does not address African women’s needs with long-term impact. I had assembled a formidable team of women all over Africa and the US who were willing to come on board so I had no problem finding great women to work with me.
Recently when I mentioned that I was working on the women’s fund again, my women friends in senior roles from Lagos to New York were ready to get involved.
This year when I entered the Zimbabwe elections as an independent candidate for Harare City Council, the experience provided me with an opportunity to understand how the Zimbabwean society works. Running for public office is expensive but after I boot-strapped my independent campaign I felt capable of handling anything. I did not win, but my election run opened my eyes to the issues facing local government, the city and my community. I grew up in the northern suburbs of Harare, then I moved to the Diaspora so I was fairly sheltered my brief foray into politics allowed me to see parts of town that I never knew existed and meet people I had never encountered before. During the campaign I went to squatter camps, I spoke to women selling at markets, I spoke to street vendors, talked to guys at the bottle-stores and debated voters at roadside braai joints. I took a closer interest in activities going on around me and once the election was done, I used that learning together with work experience to chart a way forward.
I am now in a better position to pursue the setting up of a women’s venture fund. Traditional banks in Zimbabwe are struggling due to the bad economy and cash shortage. They rely on deposits and heavy charges in a country that no longer has its own currency so they are faltering.
Zimbabwean banks are modelled on the British banking system or they are subsidiaries of British banks like Standard Chartered. They have not changed since the 1960s while the global banking system is undergoing a revolution. I remember visiting a commercial bank when I was consulting in 2014 and the CEO was bragging about their profitable loan-book based on payroll lending. Later on I had lunch with their group chairman to celebrate the US$100 million sale of the group to an Africa-focussed company but he looked nervous then later it was revealed that they had hidden a US$44 million debt to the buyers.
Zimbabwean banks are toxic and there are so many stories of local banks failing. Even in the US the major banks are being challenged by start-ups which offer much more in terms of service, innovation and technology. New types of financial institutions which are taking off in disadvantaged communities in the US called community development finance institution (CDFI) whose goals are to develop the communities in which they operate. CDFIs finance low-cost housing, schools, clinics and projects that benefit their clients. They are a form of social impact investments where organisations do well by doing good.
CDFIs are found in minority communities where African Americans and Latinos live, and they are also taking off in the United Kingdom. It is time to set up similar institutions in Africa to serve the young, mostly unemployed and female population whom the banking industry is not catering for. With my real estate expertise, I would to tackle the housing problem in Zimbabwe by providing financing housing where women can purchase core houses with low payments, build affordable healthcare institutions, provide inexpensive retail facilities and build clean, wholesale agricultural markets.
Women in Zimbabwe are just looking for opportunities and they are willing to work hard. I trust women in business, they are more straightforward but the entire banking industry is not geared to serve them. There was a time not long ago when women in Africa could not buy a house without a man to co-sign on the mortgage!
There is lot of hype about the new Women’s Bank which was set up recently in Zimbabwe by the government. It is a good idea but the government has never successfully run a bank.
The capital will be swallowed by administration expenses and, like all the previous government funds, it will yield very little benefit for the average woman on the street. There are few senior female bankers left in Zimbabwe so this bank is run by politicians. However, the government agenda is to uplift women so let us give them time and, hopefully, they will fund profitable projects. Meanwhile, I am approaching DFI’s non-profits, donors and any organisations interested in assisting a women’s venture fund.
Women’s empowerment has become a popular cause with the United Nations having a UN Women’s agency, amongst others but I have never gotten anything practical out of them. Microfinance is still very popular but I do not believe that microloans are the solution to every woman’s problem. As soon as you lend money, it is usually spent but if you give a woman housing, a small business premises, schooling for her children, clinics for her family and other affordable infrastructure projects, she is motivated to pay back and also help other women in her community to access the same facilities.
We really need African solutions for our women and African women will find ways to help themselves. The banks we have in Zimbabwe and Africa are too focussed on making a profit, we have not tailored a financing solution which is suited to African women’s circumstances.
The Middle East has got their own banking systems and their countries are developing well while Africans are grappling with bad economies and foreign banking practices which are not in touch with our realities. If we strengthen African women, we build our economies for the future.
There is a global trend for women’s venture funds and Zimbabwe should be at the frontrunner in Africa. It would solve a lot of problems in this economy where the financial system is struggling because if you empower women you empower the majority!
Peters is a business and investment consultant. She can be contacted on Twitter @debbienpeters.