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On March 08 – International Woman’s Day, women petitioned President Museveni to economically empower them with a fund that would enable them establish business enterprises. This is highly commendable for two major reasons:
l Robust business enterprise is based on the concept of family. A family has tenacity to propel business and absorb all possible shocks effectively.
l While it is appreciated that sustainable income generation should be based on the concept of family enterprise, I strongly support initiatives that focus on women as primary targets.
Research has shown that women are more focused in pooling resources, are steadfast in saving and are frugal in spending. Women are, therefore, the most suitable when it comes to deploying scarce resources for productive investment.
In Uganda, the Microfinance Support Centre (MSC) can testify that lending to women has proved more viable. Women work in groups as evidenced by the Grameen Bank experience in Bangladesh. The Grameen Bank was started in Bangladesh by Prof Mohammed Yunus, having observed that women were financially excluded on the account of lack of conventional collateral. Under the Grameen Bank operations, women were advanced loans, where the collateral was a cohesive group of women who were “each-others keeper” in case of default.
This experience is similar to Uganda’s case as shown by the research we conducted on financial deepening where it was revealed that a paltry 1.8 per cent of women in Uganda access banks for loans, but impressively, 87 per cent of women loan recipients pay back. This is the highest loan performance in any given country.
Conventionally, financial institutions require physical assets such as land and buildings as collateral security. But women in Uganda do not have property rights. Therefore, the majority of women remain financially excluded as they cannot seek loans since they do not have what to mortgage.
It is, therefore, positive that a women enterprise fund will be established. This fund will be more viable if based on the principle of a “functional home”- a home characterised by individual members who are productively engaged in an economic activity within home premises. This is a model that has transformed most economies in South East Asia.
Given the financial prudence exhibited by women, it is inevitable that the women enterprise fund will have leverage to generate higher multiplier effects. As women’s income increase, household welfare will improve, families will educate their children, and productivity will increase. As productivity and production increase, Uganda as an Economy will accelerate the growth trajectory.
Prof Augustus Nuwagaba,
Consultant on economic
transformation
reevconsult@infom.co.ug