Land loans offer Tanzanian women entrepreneurs chance to grow

The remarks were made by the Minister for Health, Gender, the Elderly and Children Ummy Mwalimu when officially inaugurating TWB’s new board of directors in Dar es Salaam.

She said the new board should ensure that it reaches many women especially those in rural areas by giving loans and surveyed plots to enable them establish small-scale industries to partake in the government’s industrialisation drive.
Reports have it that the bank has provided loans to more than a thousand entrepreneurs, an initiative that will ultimately reduce squatters.

The aim of providing loans for surveyed plots to entrepreneurs was to help them access credit from the bank. TWB had established that women had no immovable assets therefore it was difficult for them to access loans from the financial institutions. We applaud the bank’s move to boost women’s participation in the socio-economic development of Tanzania toward industrialisation.

We believe that investing in female entrepreneurs has a multiplier effect. Women often invest a higher proportion of their income back into their families and communities than men. Indeed, it is well-documented that when women control a greater proportion of household resources, the family allocates more money toward food and children’s education, and children that are healthier and more educated are better-prepared to contribute to a developing economy.

However, many African women face cultural and social barriers to becoming entrepreneurs—creating the need for promoters of the gender empowerment agenda to acknowledge the entangled relationship between women and their social environment.

According to the International Finance Corporation, nearly 70 per cent of female-owned small and medium enterprises in the developing world are reported to be unserved or underserved by financial institutions. In sub-Saharan Africa, formal borrowing rates lag behind those in other developing regions for both men and women.

However, women achieve parity to men in their ability to borrow from family or friends. In fact, they outpace men in their utilization of savings societies, demonstrating a creative solution to limited access to formal finance.

Since savings societies are more popular among women, this trend might signify that women are more dependent on each other for capital than men. Thus, increasing access to capital for one female entrepreneur could have a snowball effect for other female entrepreneurs in her community.

And yet access to capital is not the only or necessarily the greatest constraint facing women entrepreneurs. One study shows that in sub-Saharan Africa, the gap in access to credit between men and women disappears when controlling for other factors such as the applicant’s level of education and income.

Another study observes that the average small business in a developing country lacks basic business practices—such as formal record keeping, marketing, setting financial targets, and efficient inventory management—that are standard for small businesses in developed countries. To remedy this, many governments and nonprofits have attempted to develop business skills and encourage human capital transfer through business training programmes.