Covid -19: Women in agri-business seek capital to restart, rebuild businesses

Friday, December 18th, 2020 15:15 |
Elizabeth Thande

They say interest free loans, grants and training would help them battle Corona effects

Jane Githinji, 45, is an entrepreneur operating a cereals and grocery shop in Ruai town in the outskirts of Nairobi city. 

Since the first case of Covid-19 was reported in the country, Ms. Githinji business has not been performing well like before largely because customers decreased owing to interruption of their purchasing power. Like millions of Kenyans, Githinji’s business was affected by the pandemic, though she never closed down the shop. 

She continued grappling with decreased number of customers, supplies and sales until recently when she decided to relocate the business to Ruai in Nairobi county from Thika Makongeni market of Kiambu county.  

"I used to sell over 100 bags of cereals per month to my regular customers and schools in the area before Covid-19 struck. After that, even selling half of that was not easy. Although demand was high as Kenyans bought goods in anticipation for lockdown, getting supplies was a problem because of travel restrictions," she says.

Even though she is grappling with low stock and few customers, Githinji is lucky to be still in business. Most of her colleague’s closed shops two months after the first case of corona virus was reported in the country in March and moved back to the village.

  “I decided to open a shop in this place although it is very far from town because rent is a bit manageable. With this space, I can also stock other goods to compliment my income which is just enough for my daily needs,” she says.    

 “Travel restrictions made it more costly and time-consuming to stock my shop, as I had to source commodities from counties of Meru, Narok, Busia, Meru and neighbouring Tanzania.  Social distancing measures also reduced the number of customers that visited the popular market, reducing my sales and savings by more than 50 per cent as well,” she says. 

Although supply of cereals has improved after the government eased travel restrictions, she says many traders especially women are not in a position to go back to their businesses because they do not have capital.  

But Jane is not alone struggling to regain her footing at the moment even as the effects of the Covid-19 continue to hammer the economy. 

Elizabeth Thande, the managing director of PJ Flowers Ltd and a fresh produce farmer in Nyandarua County says agricultural sector has been hit hard by Covid-19 pandemic because most produce is consumed in hotels and learning institutions. 

“The government abrupt move to close schools and hotels to curb the spread of Covid-19 disease saw farmers left with too much produce without a place to take it. The situation was made worse owing to short life span of the farm produce. Although trucks were allowed to transport food products, the sales were minimal because people were not allowed to venture outside,” she told a virtual meeting in Nairobi last month. 

“We are trying to come back to business but the domestic market is very challenging at the moment. To remain afloat, we have started packaging products and send them directly to our customers,” she says. 

“Most banks are reluctant to advance loans like before the emergence of the corona virus in the country.  The banks fear high default rate by the borrowers. Initially traders used to get small, low interest loans from their merry go rounds, chamas and Sacco’s. Some instant online loans came in handy to their businesses but not anymore.” she added. 

A Kenya Private Sector Alliance survey in October showed that 64 percent of the small and medium sized surveyed had experienced high negative impact on their businesses from Covid-19 which included loss of customers liquidity challenges high cost of operations inability to pay salaries and reduced labour productivity.

According to Maria Wanjiku, a women’s group leader and trainer based in Kenol town, Murang’a County, currently most of business groups are not active because members do not meet often to avoid flouting social distance rules and lack of money for contribution because of lack of reliable source of income.  

Counties and national governments she says should initiate small grants and credit lines to support women entrepreneurs recover from the effects of Covid-19.    

Thande, however, says they have received support from their membership associations which comes in terms of training and workshops on how to survive during the pandemic and market our produce. The meetings provide space for networking with farmers and other players in the agribusiness sector, where local, import and export links are also made. 

“In the midst of the lockdown, Government should establish online markets platforms linking small-scale producers to consumers. Governments can also purchase surplus products at fair prices and transport them to towns and cities,” she proposes saying it has been done elsewhere, for example, in France and India.  

African Women Entrepreneurs Programme chief executive officer Nancy Gitonga says the government should urgently deploy resources to assist women access resources necessary to conduct agricultural activities, cushion their small businesses to avoid collapse and amplify their voices throughout this pandemic, to attract targeted support for recovery.

Rural women lack access to mobile phones and Internet connection and rely mainly on person to person networks for information. Given their lower levels of literacy and access to communication technologies, this may require translating written communications into the local dialect, using pictures, and accounting for local norms and practices in the interpretation.

KEPSA chief executive Carole Karuga says they are working to spur economic recovery with a focus on small businesses and urged women not to shy away from asking for business loans.

"These loans can be used to restart and rebuild businesses as the pandemic related restrictions continue to be lifted and recovery begins," she says.

The alliance has partnered with the Mastercard Foundation to issue women and youth owned enterprises to receive interest free loans ranging from Sh100,000 to Sh1.5million without any collateral and pay within six months.

The beneficiary must be a Kepsa member or a member of it's affiliates and his or her business must be in existence for six months.

“Expanded accessible markets and building capacity is a critical component for success in building viable businesses. This is an issue, not just for ‘women entrepreneurs’ but important across the country’s industrialization ambitions and goals,” said Kenya National Chamber of Commerce and Industry (KNCC&I) Women in Business chairperson.

The chamber has also partnered with Mastercard Foundation to issue it's members interest free loans ranging from Sh1,000 to Sh30,000.

Industrialization, Trade and Enterprise Development Cabinet Secretary Betty Maina said recently the government is finalizing plans to establish a credit fund to support Jua Kali traders and other SMEs with affordable loans.

She revealed that the Credit Guarantee Scheme Fund will help SMEs manufacture and sell essential Covid-19 equipment during this period.  

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