Senegal has ambitions to become an emerging economy by 2035. But it cannot do this without including women in its economy and giving them the tools and training to economically empower themselves, becoming, if they wish to, small business owners and entrepreneurs in their own right.
Already, women are very present in the country’s different economic sectors. In agriculture, for instance, they contribute to 80% of the workforce, yet they face more obstacles than men in scaling up their businesses,and have virtually no rights or political power. As one farmer notes, “What would motivate us is to have something that belongs to us.”
One of the biggest challenges facing Senegalese women working in agriculture is financial exclusion. According to UN Women, 33% OF WOMEN IN THE COUNTRY are employed but living below the international poverty line (defined as living on less than $2.15 a day). Banks generally see individual women as too risky for loans, and many don’t have bank accounts, access to resources, useful networks, or the education to effectively research finance solutions.
Instead, many women in Africa create informal cooperatives known as ‘TONTINES’, a peer-to-peer savings circle that pools their money and shares it among different members each month without incurring interest or withdrawal charges. It’s a safe space for women to manage their finances, and ensures that benefits and risks are shared, with community pressure to pay debts. For decades, women business owners have been relying on this type of credit and the lump sums of money for cash injections.
While there are advantages to cooperatives such as these, they have limitations. The Union Nationale des Commerçants et Industriels du Sénégal (UNACOIS), a nonprofit promoting wealth and job creation in the country, wanted to see if a more formal cooperative could operate on a national level, lending larger sums of credit. It had finance partners, one of which was ECOBANK, interested in investing in a group of women-led Senegalese agricultural businesses owners, but they wanted more information on the investment climate.
Study of 500 women-led SMEs
A major obstacle was the lack of data that could be used to build a persuasive case for investment. While there is general data on the state of women in the country, there was nothing specific for women working in the agricultural sector. UNACOIS came to ICR FACILITY FOR TECHNICAL ASSISTANCE, specifically to develop a rigorous study that could be used to convince Ecobank to take action and invest.
500 Senegalese women with agricultural SMEs were SELECTED TO PARTICIPATE IN A SIX-MONTH STUDY. It consisted of in-depth interviews asking about their experiences, level of commitment, and the impediments to progress. The interviews in local communities were to be used to build a comprehensive picture of the context and the potential risks for financial partners such as Ecobank.
Many women discussed well-known barriers, such as being shut out of the male-dominated supply chain system and not having access to land. In 2019, the World Bank reported that ONLY 2% OF WOMEN (AGED 15-49) are landowners in Senegal. Despite technically having the same legal rights as men, gendered social norms in the country keep many women from realising their entrepreneurial potential. Men, for example, are the primary decision-makers, while women are tasked with household chores. These rigid gender roles hold women back.
As a result, the study found that some women farmers work as experienced labourers on farms owned by men, while others face increased competition from foreigners who often have access to heavy machinery, fertiliser and better funding. This enables foreigners to increase the yield of crops and reduce the cost at which they sell the likes of sorghum, maize, wheat, vegetables and fruit – products which women commonly sell at markets.
In spite of significant barriers, some women have been able to make their businesses a success. Many of them, the study found, tend to be older because they no longer have caring responsibilities or need to seek approval from their husband to work. In a few cases, they might have access to money and better resources, including a network to reach financiers. Cases such as these prove that, with the right training and investment, more women could scale up their small businesses and see better returns that eventually lift the national economy.
Positive financial outcomes
Ultimately, the study allowed partners to better understand the constraints women face in the agricultural value chain and to offer them specialised training and support. It also proved that collaboration works, with UNACOIS, the ICR Facility and Ecobank improving the lives of women in local contexts by pulling together.
Moreover, with tangible data that took into account their immediate needs, Ecobank increased financing for women business owners from 9 billion to 15 billion CFA francs and opened a portfolio specifically for women in agriculture. There is scope to increase this investment to 50 billion CFA francs in time.
Encouraged by the results, a second financial partner – ADEPME – agreed to offer digital services for women business owners, speeding up the credit application process and making repayments more straightforward. As part of the same agreement, Adepme is also financing 100 selected SMEs, with at least 30% targeted at women working in agriculture.
Finally, a fintech company in Dakar has approached UNACOIS to explore the possibility of issuing micro-credits and establishing a money platform so that women merchants and workers in the agricultural value chains can be included financially.
Director Sy Ndiaye says it’s a huge step for women who until now have had no access to banking services. “Today, for the first time in their history and that of UNACOIS, we have been able to facilitate their access to bank financing, thanks to the quality of our partnership with Ecobank.”
Some women in the study have already been offered small bank loans that have been paid back, demonstrating that this model has the potential to be replicated in other sectors, whether it’s manufacturing or transportation. A blank approach, however, is not enough. The ICR Facility’s experience shows that it’s important to undertake sectoral analysis, to understand the specific needs, risks and challenges of women working in individual industries.
Projects such as these clearly show that women in Senegal can play a larger economic role in the success of the country, so long as they’re given targeted and timely support. While the COOPERATIVE MODEL has played an informal and important role in boosting the fortunes of women, it is now hoped that national cooperatives will take their place, backed by the security of banks and leveraging their investment power.
I’ve improved my situation, thanks to UNACOIS.
When we are given loans with high interest rates while our businesses are just start-ups, we are often not able to make any profit ourselves after paying these high interest rates.
To be able to buy land for cultivation would allow us to cultivate as much as the men.