Stanchart has sprung up to help women at the bottom of the pyramid with a variety of financing and saving products. CEO Moatlhodi Lekaukau highlights the importance of growing women entrepreneurs. KABELO ADAMSON reports
Women’s Finance House Botswana (WFHB) will over the next three years receive financial support of P1m from Standard Chartered bank as way of helping to get more women into financial inclusion.
Women’s Finance House, also known as Thusang Basadi, is a non-governmental organisation established in 1989 with the sole intention of helping women grow as Small Medium Enterprises (SMEs).
The organisation, which was established from humble beginnings by a group of women, has since its integration helped more than 3 000 women in various sectors of the economy, said the chairperson of the association Imelda Mathe.
Today, Thusang Basadi venture has to its name more than 3000 viable projects which Mathe said was made possible through various donors and supporters such as the government through the Gender Affairs Department.
Like any NGO, WFHB’s biggest challenge is securing funds as Mathe noted that over the last few years the scale of funders has decreased, leaving the organisation to struggle for survival.
However, the signing of Memorandum of Agreement between WFHB and Standard Chartered Bank Botswana is said to have come at the right time when the organisation is in dire need of funds. WFHB has points of services distributed across the country in areas such as Serowe, Kanye, Mochudi and Mogoditshane among others.
The organisation is not only faced with challenges such as funds but also lack of skilled personnel to serve in various aspects. “We have learnt to multi-skill and continue to march on this journey which is a sign of big things to come,” she said.
Bank of Botswana Governor, Linah Mohohlo, feels the partnership between the two parties is a welcome development when one considers that women dominate the informal economic activity. Mohohlo said the sector contributes about a third of the country’s output and employs more than 50 percent of the working population.
“These are undocumented low paying small scale businesses which are largely untaxed,” said Mohohlo, explaining that in most cases is because their individual income is small and below the taxable threshold.
Moatlhodi Lekaukau, CEO of Standard Chartered, said the idea to partner with WFHB is founded on principle of providing financing and savings products to women at the bottom of the pyramid.
Lekaukau believes such mandate is of paramount importance when considering the critical role that small enterprises play in the community and their potential to contribute meaningfully to Gross Domestic Product (GDP) in the long run.
“It is the potential of these small sole proprietors that Thusang Basadi tries to nurture to grow into MSE’s over time and in turn impact positively on the community and the economy,” said Lekaukau.
Lekaukau considers the partnership as another platform that will provide another channel for his bank to contribute positively towards the Financial Inclusion agenda in Botswana. He is of the view that despite existence of many financial institutions, the country is not different from many emerging economies that battle with financial inclusion.
His view is supported by the 2009 Finescope report which revealed that 48 percent of Batswana have never had a bank account. While various interventions have been carried out to decrease statistics, the figure is said to be still high as it currently remains above 30 percent.
Standard Chartered Bank recently released a report in which it seeks to look into financial inclusion. The report titled ‘Financial Inclusion: Reaching the unbanked’ reveals that financial inclusion is important as it can help individuals cope better with poverty, especially the challenges of irregular income and occasional large bills.
Another reason for financial inclusion is that, for micro-enterprises, it can provide funds for setting up and expanding and for improving risk-management while on macro scale it can boost economic growth by mobilising savings.
It also reported that financial inclusion has the possibility to draw firms into the formal sector, a move which will in turn raise tax revenues while at the same time making workers eligible for better protection and benefits.
Standard Chartered Bank Botswana’s commitment to helping WFHB will target two key elements - contribution to the loan fund to scale up disbursements and increase outreach; and increased access to finance as well as Knowledge sharing to impart and share expertise contributing to social and economic development.