Women in South Africa make up just over half of the population, with Statistics South Africa citing the figure at 51%. Despite the sheer numbers, the patriarchal society into which women are born has relegated them into the informal sector of the economy, where they spend their time being housekeepers and nurturers of children.
The Labour Force Survey in the second quarter of 2014 put the unemployment rate among women in the country at 27.5%, whereas unemployment among men was 23.8%. Data indicates that employment opportunities for women are unequal. The survey shows that the rate at which women are absorbed in employment is lower than that of men. In the second quarter of 2014, the employment absorption rate among women was 36.9%, whereas for men it was 48.7%.
When women participate in the economy, they are largely concentrated in the informal sector. While the figures do not reflect this, there is an argument that there are a lot of unrecorded women who are domestic workers, hawkers, hair- dressers on the streets or performing many other jobs considered to be informal.
The creation of small and medium enterprises led by women is seen as a solution to dealing with the higher level of unemployment. However, limited access to capital and finance is hindering the possibility for women, who are currently running informal subsistence-based businesses, to grow.
To deal with the challenge, a board member of one of SA’s big four banks proposes that bankers need to spend more time in urban townships and rural areas, in order to understand the funding needs of women.
Businesswoman and WIPHOLD founder Gloria Serobe notes that the under representation of women in the formal economy does not equate to economic inactivity.
“The majority of South African women are busy from dawn to dusk trying to put food on their extended families’ tables, whether it be through their work as domestic workers, as hawkers, as micro- entrepreneurs or as survivalist farmers. Increasingly, many of these women are the primary household breadwinners,” says Serobe, who is passionate about the empowerment of women.
“The problem is that too much of their economic activity is informal and, more particularly, survivalist. This was one of the main reasons why we formed WIPHOLD back in 1994. The vision for forming WIPHOLD was that we needed a mass movement of women galvanised with the simple purpose of converting their purchasing power and consumerism into investment opportunities that could bring about financial independence in their lives, financial independence that could come from owning and investing in big companies and corporations that had hitherto been the preserve of an exclusive few – predominantly white males.”
One of the projects that WIPHOLD is involved in is helping rural women to access funding from the banks. Serobe, who sits on the board of Nedbank, has been instrumental in this task.
In this regard, the 2013 FinScope survey showed that more women were banked than men. This was largely due to the rollout of the new South African Social Security Agency system, which offered government grant recipients debit cards. The banking services to the grant recipients are provided by Grindrod Bank, which has recently been acquired by Bidvest Bank.
So the fact that more women are banked seems to be a factor of their dependency on the state, rather than their being included in the financial system. About 81% of government grant recipients are women. The FinScope survey also showed that more women are involved in social groups such as burial societies, stokvels and savings clubs, compared to men. Despite this, however, over-indebted people who have formal credit tend to be women over the age of 30.
Could this be an issue of financial literacy, a higher burden on women to support families or spending habits? Serobe says, in her experience, the rural women she encounters “have an innate level of financial literacy”.
“But, a lack of formal financial literacy bites them when, for example, they try to access finance for their micro-enterprises or small businesses. Low levels of formal business acumen mean that, too often, there is limited financial record-keeping, budgets, financial planning, etc,” she says.
“That is why basic business acumen training is one of the most important tools that the financial sector can offer its clients or prospective clients. Teaching financial literacy and basic business acumen in schools would also be important.”
Serobe adds that women entrepreneurs need to know that banks have to be very careful apropos responsibly managing people’s money, and about lending it out.
In order to access funding with better ease, she encourages women entrepreneurs to keep financial records, have business plans, no matter how basic their businesses are, in order to demonstrate to the lenders that they can afford the loans. However, she also believes that lenders need to be more creative on financial inclusion strategies.
“In rural areas, livestock are legitimate assets for many rural people, and yet the banks do not recognise this important asset as potential collateral. Mutual and Federal has been very creative in designing livestock insurance cover, especially for the rural micro-farmer or small emerging farmer. Value has been placed on the livestock; hence claims can be made if something goes wrong. There is no reason for the banks not to recognise this type of (insured) asset. It is just another class of asset, no different from a car,” says Serobe.
“The Eastern Cape, for example, has more than three million cattle; you can imagine, if these were recognised in people’s balance sheets, what a difference that would make for what is now described as a poor province.
“Perhaps the best thing that bankers could do from time to time is get out of their offices in Sandton and spend time in rural areas and urban townships understanding the economic realities of the majority of South Africans.”
Another important barrier for rural women, before they even get to try to access finance, is access to land. Land tenure and title is a problem for most rural communities, but women tend to be hit by a “double-edged sword”, due to the fact that land that can be used for agricultural production gets allocated selectively by some traditional authorities.
As a result, some women are expected to get married and be dependent on their husbands to be able to access what could be productive land. Serobe says although the matter is sensitive, a discussion needs to be held with the traditional leadership.
She adds that more women need to be part of the leadership in the banking system, as they are well-placed to understand the plight of fellow sisters.
In South Africa there are only two women executive directors in the country’s major banks. These are Raisibe Morathi, Chief Financial Officer (CFO) at Nedbank, and Maria Ramos, CEO of Barclays Africa. The Barclays Africa Group is led by a female chairman, Wendy Lucas-Bull. At Standard Bank, the head of Personal and Business Banking South Africa is Funeka Montjane.
Serobe is concerned that the momentum that was there to place more women in senior management and top executive positions is slowing. “Women would have a more natural experience of the lot of their sisters, and it therefore makes sense that they would have a better intrinsic sense of what women need from the financial sector. Having said that, it is incumbent on those women who reach senior positions not to be swallowed up by the prevailing culture and emulate it. They, just like their male counterparts, need to get out of their offices and spend time on the ground.”
To help women with funding, the Industrial Development Corporation (IDC) set up a Women Entrepreneurial Fund (WEF), headed by Meryl Mamathuba. This special fund, which was set up in August 2008, was created to increase the number of women in the formal economy. It has approved loans worth over R80 million, the IDC says. Most of the businesses funded are small and medium enterprises, ranging from start-ups to existing businesses requiring expansion capital.
“WEF has provided funding mostly in the chemicals, textiles and ICT sectors. The women assisted are operationally involved in their businesses,” says the IDC.
It points out that requirements by financial institutions of security and financial contribution are, in many instances, limiting factors for women to access finance. More awareness programmes are needed to make women aware of the funding options available to them, the IDC says.