Generally speaking, credit is the leading source of financing among entrepreneurs. But in Tanzania, the story is different, especially among women entrepreneurs.
Data shows that most women entrepreneurs do not automatically plump for loans offered by commercial banks and microfinance institutions in Tanzania.
This is due to various reasons, including especially unfriendly borrowing terms that include inordinately high interest rates.
Negative beliefs about credit from formal lenders are usually the result of lack of awareness regarding financial issues, as well as functional business plans on their part.
This kind of entrepreneurs – women and the youth, particularly – requires the right kind of support, especially by training them on the crucial role of credit; preparing business plans and keeping business records – and even on how/where best to invest borrowed funds.
Also, some women seeking credit claim that unscrupulous loan officers solicit bribes to speed up the process, or bend borrowing criteria. This is criminal misconduct which should be promptly dealt with by the appropriate authorities. In any case, bank managements must also make follows-up on such incidents to ensure that any loan officers of dubious probity are sorted out to avoid a repeat in the future.
It must be remembered that women form a bigger proportion of the Tanzanian population and, as some human rights activists put it, “empowering women is empowering the society”.
Women entrepreneurs – as is indeed the case with any other entrepreneurs – need to succeed and play their rightful role in growing Tanzania’s economy.
As it is, more than a half of the small and medium-size enterprises in the country are reportedly owned by women – a clear indication that they have the potential to spur economic growth.
Let us join efforts to do what is needed to support enterprising women in securing financing support for their businesses.