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The entrepreneurial spirit of the Somali women

Credit facilities have helped bring back the entrepreneurial spirit of the Somali women who were struggling to run their businesses with minimum capital.

Abdirahman Yusuf

In the bustling market of Hamarweyne in Mogadishu, Fatuma haggles over the price of a shirt with one of her customers. After a few minutes of negotiation they are able to reach an agreement and the customer leaves with the shirt in hand, a big smile on his face.


Until now, Fatuma, a mother of six lived on the little she made from selling vegetables to put food on the table for her family. She could barely afford to take her children to school or cater for other family needs. With her new business, she takes care of her family without breaking much sweat and her business is thriving thanks to International Labour Organisation (ILO) and the International Bank of Somalia (IBS) microfinance initiative.


Fatuma is among 310 women who received business training and loans from the joint ILO and IBS initiative to diversify or expand their small businesses.


The ILO is collaborating with IBS to design financial services and banking products for entrepreneurs. Through the joint initiative the programme has been developing business mentoring skills to assist the development of businesses especially to women entrepreneurs and increase access to microfinance. Before the collaboration, IBS had a similar lending system in Mogadishu. According to the CEO, Hassan Yusuf, IBS had carried out a survey on the needs of entrepreneurs and found that mostly women lacked capital and necessary skills to run their business.

Hassan says they targeted women because they form 78 per cent of their client base. “To reach more women, the two organisations partnered together with IBS providing the infrastructure and expertise and ILO injecting additional capital,” says Hassan.


Najma who has worked with the ILO since 2007 explains, the credit facilities have helped bring promote the entrepreneurial spirit of the Somali women who were struggling to run their businesses with minimum capital. In addition, improved security in Somalia now has enabled many women start businesses. “By nature, Somali women are entrepreneurial but lack of capital has been a big obstacle in their quest to rebuild their lives,” Najma said while exclusively talking to The Somalia Investor Magazine.


“With relative security comes economic growth and the joint initiative aims to propel the women of Somalia to greater business heights, more institutions are working in Somalia and lending services are becoming accessible to women, “she reveals The project seeks to improve the sustainability of its initiatives by working with institutions that offer micro finance schemes.


Currently, applicants receive $500 as loan to existing women entrepreneurs. The microcredit loan program applies to the women group based on their social and financial background, where group members are jointly liable for repayment through a grace period.

The bank have set the main criteria of microcredit client selection for the entrepreneurs of micro-businesses using Qard-hasana (Benevolent Loan) mode of financing,” she says. To ensure that as many women as possible benefit, there is a special methodology applied to identify women and reduce the risk. One of the requirement is that the beneficiary must have an ongoing business in one of the three markets in Mogadishu that the micro-credit facility has been piloted.

Women in Somalia are determined to build their businesses and contribute to the growth of the country. Most households are led by women and it is easy to see why they have embraced this opportunity wholeheartedly,”

Najma Ismail,
ILO technical officer.

Najma says that the collateral is in form of group guarantors, a methodology based on a research conducted by the bank.


“The IBS microfinance program has zero default,” says Hassan. “The women in Somalia are determined to build their businesses and contribute to the growth of the country. Many households are led by women and it is easy to see why they have embraced this opportunity wholeheartedly,” she says.


So far 310 women entrepreneurs have benefited with ILO directly supporting 270 of them, while the bank has extended credit to 40 women directly. Najma adds due to the sustainability of the microfinance initiative more women will benefit. She also hopes that they can get more support from the International Community to expand lending to women entrepreneurs in other parts of Somalia.


In addition, she hopes with the repayment plan in place, in future programmes the amount given to each small trader will increase and vary depending on the kind of business and individual demand. The biggest challenge for the micro-credit scheme is limited resources to the number of women entrepreneurs that need loans. Najma is hopeful there will be more success tales like that of Fatuma in future. Hassan says IBS is open to more collaborations so that micro-lending facilities can be extended to more people in Somalia.


“We want to reach more than 10, 000 Somalis in the next three years with the help of other partners,” he says. To reach out to more people, the bank has also designed several products. The bank has many products both retail and corporate products.


“There are special products designed for unemployed youth, farmers, fishery and others. We also have a credit facility for those returning from diaspora and want to start businesses. Simply put, our bank caters for everyone with need,” says Hassan.

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