Stanbic driving financial inclusion through DADA initiative

At the helm of Stanbic bank' s women banking unit seats Rose Gichuki, a jovial lady who believes in helping women achieve their dreams.

Gichuki believes that when a woman grows the community benefits as women are known to nurture.

The women banking unit at Stanbic bank is known as DADA initiative which loosely translates to Dare to Aspire, Dare to Achieve, dada is also a swahili word that means sister.

The platform provides financial and non-financial services to enable women to start & grow a business while also supporting personal growth.

They target women in businesses and self help groups commonly knowns as chamas.

Gichuki says the bank saw the need to start this initiative as it was noted that women find it hard to access credit and most of them are largely unbanked.

“The bank serves everybody, we welcome all, but this specific initiative was to empower the woman in the community,”said Gichuki.

The main objective of the proposition is to let women know where they can access loans and also grow as a person.

Gichuki noted some challenges that women faced in accessing credit include fear of debt and lacking proper financials.

Their main aim in giving credit is for it to be a a catalytic fund/capital.

Catalytic capital is an essential tool that supports impact-driven enterprises and organizations that lack access to capital on suitable terms through the conventional marketplace.

The investment capital is risk-tolerant, concessionary, and flexible

In the last 28 months, the initiative regeisterd over 30,000 women and they have lent over Sh4billion.

PERFORMANCE

On bad loans, Gichuki noted that women are good borrowers.

In the initiative they only have 3 per cent non-performing loans.

The initiative also helps women in networking and access to markets.

“We have members from all walks of life therefore you can find a member who grows mangoes meeting with another member who exports fruits and they are able to network and work together,” said Gichuki.

Gichuki called on more women to join the initiative as it provide an opportunity to drive growth.

CHALLENGES

According to a survey done by Financial Sector Deepening Kenya(FSD Kenya), women have fewer and lower value assets meaning their assets are also more liquid and under more household consumption pressure.

The survey notes that women dominate informal business ownership in Kenya, meaning they were more likely to take a wealth hit during Covid-19 .

The highly informalness in their economic activity therefore locks them into lower paying and lower productivity activities.

According to the survey, out of 770,000 informal enterprises ,65 per cent are owned by women, 29 per cent were owned by men while the remaining six per cent are owned by both women and men.

“We continue to see the gendered impact of Covid-19 with economic pressure leading women to sell assets, forgo meals and work more to generate income,” the survey noted.

In the wake of the Covid-19 pandemic, which has caused significant economic setbacks globally, the report highlights that financial institutions have an important role to play in advancing outcomes for women-led MSMEs.

The research also finds that supporting women customers drives institutional profits, which can lead to positive steps toward overall economic recovery.

Another research done by FSD Kenya, in 2017, revealed that there was a 30 percent gap in financing between men and women-owned businesses.

“Women-owned MSMEs are ‘thin file,’ meaning they have limited formalized business documentation or credit history on which to lend,” the survey noted.

The research assessed the impact of an effort to change this imbalance.

The main point of concern was that trust and confidence are critical for women when it comes to finance, in particular, older and lower-income groups.

Another finding was that with majority of businesses owned by women being informal thus outside the tax net they cannot benefit from tax incentives.According to the International Finance Corporation(IFC), more than 20 percent of working-age women in Sub-Saharan Africa are entrepreneurs; however this segment, in particular, finds it hard to access finance, with a $1.7 trillion financing gap for women-owned SMEs worldwide.

The DADA initiative comes in here as it helps women learn the importance of formalizing their business but still they allow women to get unsecured loans (without papers).

Despite a large number of the women's businesses being informal, Central Bank of Kenya data shows that women currently account for at least 82 percent of total savings in Kenya.