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The Nairobian

Empower women by making it easier for them to access credit

Opinion

By Isaac Kalua Green | Mar 02, 2025

Vihiga Women Rep Beatrice Adagala issues Sh100,000 cheque to Majengo Saloon Group during issuance of the National Government Affirmative Action Fund (NGAAF) cheques to youth and women groups at Mbale market, on May 17, 2024. [File, Standard]

In my house, my son and I are outnumbered. It’s just the two of us against my wife and our two daughters. If you think that’s just my personal experience, think again. Across Kenya, the statistics tell the same story - women outnumber men.

According to DataReportal (2024), Kenya’s population stands at 55.65 million, with 50.4 per cent female and 49.6 per cent male. This means that for every 100 men, there are approximately 101 women. Despite being the majority, women still lack fair access to credit and capital. As we gear up for the International Women’s Day on March 8, we must ask - What progress are we celebrating if financial exclusion persists? This is not to deny past progress.

Africa has the highest female entrepreneurial activity globally, standing at 24 per cent, according to the International Finance Corporation (IFC). However, despite this proven business potential, only 7 per cent of women-owned MSMEs in Kenya, for instance, have access to formal financing. The rest are left to borrow from informal lenders and microfinance institutions that charge interest rates as high as 5 per cent per month.

Imagine borrowing Sh100,000 for your business, only to repay Sh160,000 in a year, and that’s before operational costs. We have not even talked about the mobile lenders whose interest could go up to 10 per cent a month. Women are forced to borrow even for the smallest of needs - whether it’s a wheelbarrow, farm inputs, or stock for their kiosks - yet they are met with impossible repayment terms.

If we continue allowing this, then what exactly are we celebrating? Real empowerment starts when women can access fair, affordable and sustainable credit. It is an established fact that the financial system in Kenya favours men, forcing women to fight for scraps. For instance, only 1 per cent of land titles are owned by women, while an additional 5 per cent are held jointly, according to the World Bank.

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This means when a woman needs a loan, she lacks collateral, while men, who own most of the land, are able to secure the funding necessary to expand their businesses. Even in the booming digital finance sector, gender disparities persist.

The 2024 FinAccess Household Survey reports that 82 per cent of Kenyan women have access to formal financial services, primarily through mobile money platforms. While this signifies progress, formal banking, insurance, and pension services remain out of reach for millions of women. If the system is designed against them, how can we expect them to thrive?

Yet the financial revolution women need already exists - but it lacks support. Women have created their own financial systems through chamas, table banking, and Financial Self-Help Institutions (FSIs). However, these promising institutions lack what they need most – capital, forcing women to turn to expensive microfinance institutions and informal lenders.

The government and financial institutions must recognise FSIs as the backbone of financial inclusion for women and support them with bulk funding. If FSIs were linked to banks and given government-backed credit guarantees, they could transform women’s financial independence in unprecedented ways.

Kenya must look at successful models like India’s SHG-Bank Linkage Program, which enables self-help groups to access structured funding instead of borrowing in small, expensive amounts. If the same was done here, FSIs could receive bulk funding, allowing women to borrow at fair rates without the weight of unfair interest.

At the same time, digital financial literacy programmes must be expanded to equip rural women with the knowledge they need to manage finances and make informed financial decisions. The lending system itself must also be restructured to consider new ways of assessing creditworthiness and make the process more inclusive.

Women do not need charity. They need fair financial policies that allow them to build, expand, and control their own futures. If Kenya truly wants to move forward, we cannot afford to keep half of our population financially handicapped.

This is the moment to rethink how we empower women - not with words, but with wealth. Think green, act green!

-www.kaluagreen.com