Imagine a world where women-led businesses survive but thrive, where their ingenuity and determination are met with robust financial support.
Capital becomes a catalyst for change in this landscape, empowering women entrepreneurs to break barriers, innovate, and create lasting impact.
Women are the backbone of the African economy and Africa is home to the highest percentage of women entrepreneurs in the world. Yet African women continue to face huge hurdles facing prohibitive interest rates, lacking collateral and financial institutions failing to respond to the specific needs of women.
The COVID-19 pandemic significantly impacted women entrepreneurs in Kenya, exacerbating existing challenges.
A study by Innovations for Poverty Action (IPA) found that women were less likely to adjust their businesses to new circumstances, such as shifting to online sales or remote work. They also received less government support and took fewer loans to maintain operations.
Another study by the European Investment Bank finds that unequal access to finance remains a huge challenge across Africa that holds back economic activity, and social progress and prevents women from contributing to economic growth.
The European Investment Bank (EIB) and the European Union (EU), working together as Team Europe, launched a targeted financing initiative of EUR 50 million in Nairobi, in collaboration with the Cooperative Bank of Kenya, to accelerate investment by companies affected by the pandemic.
The cooperation between the European Union including the European Investment Bank and leading Kenyan financial partners like Co-op removes barriers to accessing affordable microfinance and enables underserved women to easily access microloans in local currency. The combined expertise, understanding and vision of all partners help to incentivize and deliver more equitable financial inclusion for thousands of women entrepreneurs across Kenya.
Ms Nancy Nyambura, CEO of Animal World Feeds, exemplifies how financial resources help women-led businesses, foster thriving businesses, and contribute to community development.
From Frustration to Opportunity
Nancy’s entrepreneurial spirit ignited in 2002. As a small-scale farmer with a single cow, the daily trek to Nairobi’s industrial area for dairy feed was a significant burden.
Witnessing the struggles of others like her, Nancy saw a gap in the market. She envisioned a solution – a shop in Kayole, a low-income neighbourhood within the larger Eastlands area of Nairobi, catering to the needs of local farmers for animal feeds.
However, her aspirations to become a major distributor for Unga Feeds Limited were met with a challenge: meeting Unga Limited’s requirements that she has at least 3 delivery trucks and a hefty guarantee amount.
EIB, A Partnership for Progress
Undeterred, Nancy approached the Co-operative Bank of Kenya. This crucial step connected her with the European Investment Bank’s support, channelled through local banks like Co-operative Bank.
“At Co-operative Bank we believe that agriculture is essential for Kenya’s economic growth. That is why we provide various financing options that support farmers and other agriculture value chain players,” says the bank on its website.
The EIB has invested over Ksh. 97 billion (EUR 700 million) in SMEs like Animal World Feeds through intermediated lending to local banks, such as the Co-operative Bank.
EIB’s unique model empowers local institutions with knowledge of clients’ creditworthiness and specific financial needs. This collaboration proved instrumental – Nancy secured the loan and met Unga Feeds Limited’s requirements.
“The loan I got from Co-operative Bank helped me during the Covid pandemic period. Actually, that is when my business grew; because every other business closed down,” says Nancy.
The impact of the EIB-backed loan extended far beyond initial business growth. During the COVID-19 pandemic, when many businesses shut down, Nancy’s company experienced a surge. Increased home-based chicken rearing led to a spike in demand for chicken feed. Leveraging existing customer relationships, Nancy capitalized on the new opportunity, even receiving chicken meat orders from her feed customers.
Nancy’s story is a testament to the transformative power of EIB’s support. By partnering with local banks, EIB provides accessible financing solutions tailored to the needs of women-led MSMEs.
This approach not only empowers female entrepreneurs but also creates a ripple effect, fostering job creation, community development, and economic growth.
