Evaluating the challenges of women in accessing loan and credits by female entrepreneurs.
The International Labour Organization (ILO) estimates that women entrepreneurs now account for a quarter to a third of all businesses in the formal economy worldwide . Nigerian economic policy places high value on entrepreneurship. Governments look to entrepreneurship as a critical driver of growth and job creation. Entrepreneurship has been a male-dominated phenomenon, but time has changed the situation and brought women as todays most memorable and inspirational entrepreneurs, even in traditionally male dominated sectors such as construction. Overtime women are increasingly turning to entrepreneurship as a way of coping with the glass ceiling that seems to prevent them from reaching top managerial levels in organisations. Others have found that entrepreneurship provides them with greater satisfaction and flexibility. Different scholars and writers of women in business elucidate that women entrepreneurs in Nigeria play a critical role in the economy of the country with regards to income and employment creation, as in any other African country. Women are now very active both mentally and physically in terms of business ventures. Women have realized that they can do what men do, or even better than them in terms of business ventures. But the challenge of government and other bodies to sponsor women into business have been a major course for worry, women have been deprive the privilege of taken loan and accessing any form of help when it comes in empowering there business life. This writing will focus on the challenges women face in accessing loans and other financial help out there.
Challenges of women in accessing loan and credits by female entrepreneurs.
Many Nigerian women do not have assets to secure a loan and even if they do, they are scared to risk it, banks manipulate figures. The risk is too great and the interest rate is too high, it keeps jumping.Banks will not give you any funds to start a business, because of the high risk involve, they will only lend you money if you are established and well known to them, irrespective of gender. There is no gender in financing, a man or a woman with no assets or standing in the society is treated the same by Nigerian banks.If you do not have a house and property in a choice area that is the end, where do they expect many of us to get such, if we have properties in those area then we are rich and do not need the bank. Below are another challenges faced by females in accessing loan;
1. Legal regulations and customary rules often restrict womens access to and control over assets that can be accepted as collateral, such as land or livestock. Women are less likely to have land titled under their name, even when their families own land, and are less likely than men to have control over land, even when they do formally own it. Biased inheritance rights often bestow land to male relatives, leaving both widows and daughters at a disadvantage.
2. Cultural norms and family responsibilities. Socially accepted norms and expected family roles have a profound effect on the type of economic activities that women can engage in, the technologies available to them, the people and agencies with whom they can interact, the places they can visit, the time they have available and the control they can exert over their ownresources such as capital.
3.Biased attitude of Banks Womens access to financial resources is also limited by biased lending practices that emerge when financial institutions consider them inexperienced and therefore less attractive clients, or when institutions lack the knowledge to offer products tailored to womens preferences and constraints (Fletschner, 2009).
4. Lack of collateral and start-up capitalAccess of collateral and asset-based lending generally constrains borrowers from access to finance. This is much more serious women for obvious reasons. Data from the NBS (2009) showed that men are twice as likely to secure finance compared to women. A recent World Bank report on the Investment Climate in Nigeria showed that capital rather than productivity narrows the range of activities in which women engage. The report also showed that majority of women (76 per cent) rely mostly on internal funds and retained earnings, and that only about 1 per cent obtain capital from the formal financial sector. The report substantiates that formal financial institutions, especially banks, have not supported women entrepreneurs as much as they could have (Halkias et al., 2011).
15.Lack of awareness of finance Women generally lack knowledge on the financial options available to them. Furthermore, the cost of getting this information (measured in money, time, and energy) may be high due to family responsibilities.
Conclusion
The overall picture shows Nigerian female entrepreneurs operating in an unfavourable business environment, characterized by low access and high cost of finance and weak institutions. This writing shows that female entrepreneurs in Nigeria typically obtain their initial startup investment and working capitals from internal sources; own savings, retained earnings and loans from family and friend. While finance has been termed a major problem, it is surprising to note that a high majority of the female entrepreneurs had never applied for a formal bank loan, due in part to stringent collateral requirements by banks and other loan givers.
