Bridging the gap: Empowering women-owned SMEs in the DRC
The Democratic Republic of Congo, home to nearly 100 million people, faces significant gender inequality challenges despite women making up 41 per cent of its population. With women comprising 62 per cent of the labor force, predominantly in agriculture, their contributions to micro and small enterprises (SMEs) and informal sectors remain underappreciated. To explore the barriers to financial access and highlight ongoing initiatives, CNBC Africa's Tabitha Muthoni had an exclusive in-depth interview with Elisabeth Kibitek Goueth, Associate Partner at MicroSave Consulting (MSC).
Tue, 10 Dec 2024 10:01:11 GMT
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AI Generated Summary
- Women comprise 62 per cent of the labor force in the DRC, with significant contributions to micro and small enterprises, although facing challenges like lower profits and productivity compared to men.
- Women in the DRC encounter hurdles in accessing finance, including limited education, cultural norms, and discrimination, in addition to high rates of domestic violence and caregiving responsibilities.
- Financial institutions in the DRC have launched initiatives to support women-owned SMEs, offering tailored loan products, capacity building sessions, and networking opportunities to empower women entrepreneurs.
The Democratic Republic of Congo, home to nearly 100 million people, faces significant gender inequality challenges despite women making up 41 per cent of its population. With women comprising 62 per cent of the labor force, predominantly in agriculture, their contributions to micro and small enterprises (SMEs) and informal sectors remain underappreciated. To explore the barriers to financial access and highlight ongoing initiatives, CNBC Africa's Tabitha Muthoni had an exclusive in-depth interview with Elisabeth Kibitek Goueth, Associate Partner at MicroSave Consulting. When we talk about participation of women in the labor force, it is estimated at almost 62 per cent. And we can also notice that 69 per cent of women work mostly in the agricultural sector, while among them 20.5 per cent already almost are entrepreneurs. When we talk about entrepreneurship, it's good to mention that there are two different types of entrepreneurs that we can see. There are these micro small businesses, women, that start their business because they need to make their ends meet. And usually they can cook food, sell them on the streets, they can sell manufactured goods, or even sometimes they can cross borders to make trades with neighboring countries. And this is the larger part. And the second type, and that has mostly SMEs, and that is this group of women that decide to launch their business because they want to scale it and to show a market opportunity. Usually women businesses are in the agricultural sector, as I said, and they are often also, you can also find them in small scale trading, manufacturing services, but mostly in the informal sector, because the first type of women that are small is the larger part of entrepreneurs, women in the DRC. Talking about SMEs themselves, there is little existing data. However, there are studies that have shown that in the DRC there are more than 300,000 SMEs. Among them, we have at least 40 per cent of women-owned SMEs. And even there, there are striking differences, mostly regarding the earning outcomes. Women-run businesses perceive 67 per cent lower profit on average than men. And even in the agricultural sector where we have most women working there, we can notice that women farmers produce less than 18 per cent less revenue than men, and they are even 11 per cent less productive than men. That shows that there are a lot of challenges in the sector for these women in the DRC. Indeed. In terms of accessing finance in the DRC, women face challenges such as limited access to education, access to finance itself, and cultural norms and perceptions. Apart from the common challenges that SMEs have, women in the DRC lack access to formal education and necessary training for running successful businesses. Access to finance is another major issue, with less than four per cent of women-led companies having access to banking compared to less than 10 per cent for men. Cultural norms and gender discrimination also play a significant role, with societal beliefs hindering women from starting businesses. Moreover, the disproportionate share of caregiving and household duties limits the time women can devote to their businesses. Additionally, high rates of domestic and gender-based violence in the DRC further hinder women from engaging in economic activity. Despite these challenges, there are initiatives from financial institutions that aim to support women-owned SMEs in the DRC. For example, Robank launched the 'Ladies First' program in 2010, providing women entrepreneurs with a range of financial services, preferential pricing, capacity building initiatives, and networking opportunities. Finca DRC introduced the 'Juste pour être' loan product in 2021, offering flexible financing options for women-owned businesses. SMICO's 'Rien Salafam' product provides tailored loans, financial education, and business management support for women entrepreneurs. These initiatives are helping women overcome financial barriers and achieve their entrepreneurial aspirations. In conclusion, while women-owned SMEs in the DRC face significant challenges, there is progress being made through targeted initiatives and reforms to empower women economically. By addressing the barriers to financial access and supporting women entrepreneurs, the DRC can unlock the full potential of its female workforce and drive sustainable economic growth.