Gender in the Private Sector

Giving Women Economic Opportunity: World Bank Initiatives

In Tanzania, Female Entrepreneurs Tap Financing

Four years ago, few women in Tanzania had bank accounts. Even fewer women could get bank loans to grow their businesses. But today, that’s changing.

A special loan program attracts women once “shy” of banks.

Four years ago, few women in Tanzania had bank accounts. Even fewer women could get bank loans to grow their businesses. But today, that’s changing. Women business owners who before could not access formal sources of credit have new opportunities to gain financing, thanks largely to new financial products offered by Exim Bank of Tanzania—with support from the World Bank Group’s private sector arm, IFC, the Gender Action Plan, and the Canadian International Development Agency.

In 2007, Exim Bank became the first institution in the country to cater to the vastly under-served market of women business owners. Since then, Exim’s program has exceeded expectations and prompted many women to open bank accounts for the first time, says Felister Simba, manager of Exim’s Women Entrepreneurs Financing (WEF) Program.

“Most women shy away from banks. Exim saw the gap in the market, so they started this program,” she says. “Basically, we are very happy to know that Exim Bank has started something in Tanzania for women and that it is successful.”

Backing Female Entrepreneurship

In 2007, Exim Bank partnered with IFC to establish a program to serve women enterpreneurs in Tanzania. The program began with a US $5 million loan from IFC for loans to businesswomen and for advisory services. The latter provided gender-sensitization training to Exim Bank staff to enhance their ability to reach the women’s market, supported the establishment of Exim’s Women Program Unit, and helped develop financial services products that better respond to the needs of businesswomen.

In addition, as a way of building capacity for women entrepreneurs and making them more bankable, the IFC partnership helped Exim Bank develop and run basic financial literacy training for its current and potential women customers.

Exim Bank’s WEF program has since enabled 214 women to access over US $8 million in credit to expand their small or medium sized businesses. Many of them are involved in trade, manufacturing, and education, to name a few sectors, according to Simba.

Exim also offers an innovative savings account for budding women entrepreneurs called the Tumaini Account (Swahili for “hope”). The bank enables Tumaini account holders to start their business by providing loans of up to 110% of their savings. The account has grown in popularity, says Simba, as it allows women to borrow without other collateral for their business. Exim’s partnership with the microleasing institution SELFINA further opens up opportunities for financing to female borrowers who have good repayment records, says Simba.

Access to Finance a Big Hurdle for Women

IFC’s support for the Exim Bank program followed an IFC study published in 2007 showing women in Tanzania faced major hurdles in the financial sector. Though Tanzanian women owned 43% of micro and small enterprises, only 5% reported having access to bank finance in 2006. And only 0.53% of female-headed farm households accessed credit.

One reason for women’s lack of access is they often can’t meet the requirements to qualify for bank loans tied to land titles as collateral, notes the study.

Exim’s products have offered alternatives, and also helped Exim become better known and expand its customer base, says Simba.

“We are very proud of the women entrepreneurs in our portfolio. It is contributing to the growth of the bank, and it is very profitable,” she says.

Growing Medium-Sized Enterprises and Training Women Entrepreneurs

The Exim bank loan helped entrepreneur Monica Gaimo buy machinery for her construction business in Arusha, allowing it to take on more high-end projects. Today, Gaimo Construction Ltd. has more than 200 employees building large houses, roads, and bridges. The company usually has three or four big projects going at once, says Gaimo, director, general manager and co-owner of the business with her husband.

“Without the loan, my business would be going very slowly,” she says. “It wouldn't be picking up like now. I think we’d have more small projects than big ones.”

Gaimo discovered the WEF program through business and financial literacy training provided by Exim Bank that aimed to build entrepreneurship skills among women. Such training has been offered at 15 locations in the country; 1,344 women have been trained to date, says Simba.

The WEF program and the Tumaini account are now offered at Exim’s 21 branches in most regions of the country, she says.

The bank would like to expand further into rural markets. Exim Bank is a member of the Global Banking Alliance for Women, a consortium of financial institutions from around the world that exchange best practices to accelerate the growth of women in business, while generating superior business outcomes for member financial institutions.

“We would like to have a huge number of women entrepreneurs benefiting from our program,” says Simba. “We want to support more women-owned businesses, because at the end of the day, we need them to be successful.”

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