Access to formal financial services, either cash or credit remains a hurdle for most women in rural Africa. According to 2SCALE Gender Equality & Women Economic Empowerment Expert, Ms. Eva Sanou, one of the main reasons is because the financial system is risk-averse and thus requires guarantees of repayments such as land, buildings, assets, and other valuables before facilitating loan processes, even within the simplest forms of credit schemes.
Women having reduced access to land -most of the time related to cultural reasons- and having to go through different processes to increase their earnings creates a major barrier when filling loan applications. Although different methods have been initiated to facilitate their access to finance, the gender gap is still pronounced in the agricultural sector. This is also accentuated by the lack of adapted financial products in this sector,
With such challenges and others, promoting financial inclusion remains a key priority across 2SCALE partnerships.
It is important for 2SCALE to promote financial inclusion as it empowers men and women in increasing their earnings and understanding the economics behind their value chains. More than that, 2SCALE contributes to making access to finance more innovative for women. With these two metrics, real-time livelihood changes can be made and therefore reinforce 2SCALE’s commitment to creating meaningful impact as a means to promote women's empowerment and lead gender equity-improving actions,
In Ethiopia, the partnership between Ras-Gayint Farmers’ Cooperative Union and 2SCALE has facilitated empowering smallholder bean farmers and cooperatives through access to finance and financial services. During the first months of implementation, the participation of women in the bean partnership was found to be limited. This predicament is linked to among other factors, the shortage of working capital as well as limited access to financial institutions with products tailored for women. To ignite participation and empowerment of women in the bean value chain, Ras-Gayint Union and Lidet SACCO Union in partnership with 2SCALE committed to establishing women's savings and credit cooperatives. Lidet SACCO Union is a rural financial institution located in Nefas-Mucha town, close to where Ras-Gayint Multipurpose Farmers' Cooperative Union (MFCU) is based. So far, two credit cooperatives have been set up and supported under the Lidet SACCO Union, with a women-only clause on membership. The two are Addis Hiwot Women Saving and Credit Cooperative located in Simada-Mujja district and Enat Women Saving and Credit Cooperative in Lay-Gayint district. They currently have a total membership of 296.
A cooperative for the women, by the women
In December 2021, Enat Saving and Credit Cooperative was established with a membership of 115 women. They had an initial capital of ETB 23,600 ($429). Currently, the credit cooperative has a membership of 156 women with a capital of ETB 58,500 ($1084).
Interestingly, the birth of this cooperative came about from numerous requests that Lidet SACCO would get from local female traders and women-led MSMEs. The manager at Lidet SACCO, Mr. Alebachew Warkie explains:
We decided to set up credit cooperatives that can serve the specific needs that women in the beans value chain or with interest to be part of the value chain have. For most, access to credit facilities has been a hindrance and this is the reason why their participation in agriculture has been low. One of the savings and credit cooperatives we set up in partnership with the women is Enat Saving and Credit Cooperative. Enat, which means mother has a current membership of 144 women whose aim is to market and sell haricot bean.
One year after its establishment, members have been trained on financial management and savings mobilization. The women also meet on a regular basis to exchange and share ideas. Their end goal is to participate in the bean value chain and other trading activities to enhance their livelihoods.
One of the members, 32-year-old Askai Demissie explains:
Since we joined Enat Saving and Credit Cooperative, we now have knowledge on how to save and grow our savings, we have developed a fixed savings schedule and so far, each of us has saved ETB 1800 ($33). This for us is a good step towards ensuring that we can grow our savings to a point when we can get a loan from Lidet SACCO Union.
26-year-old Kasaye Endalew, another member of Enat Saving and Credit Cooperative is grateful that Lidet not only heeded their call as women with an aspiration to grow their finances but also provide a meeting space for the women to hold meetings. She explains:
I am a trader in the local market and mainly sell fresh farm produce. Joining Enat Saving and Credit Cooperative has been of great benefit because I now keep track of my expenses and ensure I have some left to save. As a trader, the main reason I joined Enat Saving and Credit Cooperative is that it will enable me to expand my business and even get market linkages to grow further. We are grateful to Lidet SACCO Union and 2SCALE for making this possible. Lidet even provides a meeting space where we meet on the 29th of each month to share ideas and make monthly contributions.