Women’s access to finance in Sierra Leone

Text: Katharine Tengtio
Photography: Courtesy of the Cherie Blair Foundation for Women

Although Sierra Leone is at the bottom of the UN’s rankings for human development, the nation is filled with budding entrepreneurs who have smart and innovative ideas to spark productivity and growth. Recently I heard the story of one of these entrepreneurs, named Louisa Musa who is from Kenema, a major trade centre in the Eastern Province. The city is the third biggest in the country, however is growing faster in population than it is in infrastructure, resulting in a great need for basic facilities.

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Louisa explained that it was this need, particularly in hospitality, that inspired her business. As a NGO and government workers increasingly began to travel through the city, she recognised the need for a quality space for these workers to stay and live in for short as well as extended periods of time.  Her ideas turned into well-thought out plans, which eventually led to the need to take out a loan. Confident in her business plan, Louisa approached her local bank and asked for a loan.

The bank quickly turned her away however, saying that she would not be able to take out a loan without her husband. She then went to her husband and asked him to be her guarantor. They went back to the bank and were then able to secure a loan, however only by signing over the deeds to their small amount of property and putting their home at risk. As if putting down high collateral wasn’t enough, Louisa is also burdened by the extortionate interest rate of 27%, which has in effect limited her business’ growth as after four years she is still paying back the loan.

I met Louisa at the recent launch of the Cherie Blair Foundation for Women’s Enterprise Development Programme, where she was speaking to a large audience of people about her experience. The programme aims to support women entrepreneurs, particularly in gaining access to credit. I was able to speak with Priya Patel, the programme officer who has been working with Louisa the past year and has visited her in Kenema to support her business.

“The majority of women in Sierra Leone find it very difficult to acquire loans for their businesses, due to patriarchal practices which exclude women from access to finance”, Priya explained. Even when there are women who are interested in pursuing a business, they are often discouraged by their families and communities. There are also structural barriers in place the prevent women from taking out loans, such as the need for a guarantor with collateral and very high interest rates. Additionally, many women who do succeed in accessing a loan often struggle to manage it due to low financial literacy rates and business education.

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As Louisa explained her difficulty in accessing finance, the audience was surprised and appalled in learning about her struggle. Those who were following the launch on Twitter responded in comments expressing shock that such prejudices still existed in 2012. What was so shocking to me was how straightforward and necessary Louisa’s guest house plan was, and yet the bank still made it difficult for her to develop the business. In a developing and emerging market like Sierra Leone, shouldn’t businesses and entrepreneurship such as Louisa’s be strongly encouraged and supported?

After Louisa spoke, one of the speakers at the launch, Zain Verjee, notable CNN news anchor who grew up in Kenya, emphasised that it is imperative to open up access to credit for women, not only in Sierra Leona, but across North and Sub-Saharan Africa, the Middle East and South Asia as well. Much research has shown that women’s entrepreneurship is fundamental to economic and social progress in developing countries, as they are more inclined to invest their income into the education, health and overall well-being of their families in communities. Additionally, as it is clear from Louisa’s story, many of women’s entrepreneurial ideas are just generally good economic pursuits that can further development in infrastructure and markets.

Tidjane Thiam, successful Ivorian businessman and former politician, also spoke on the matter, stating, “There is a lot of money available in the world, however the problem is the pipeline.”  There is clearly a potential to increase women’s access to credit, it’s just a matter of having organisations and governments work to break down financial barriers.

The Cherie Blair Foundation for Women has developed the Enterprise Development Programme that works to break down these very barriers. By working with partner organisations on the ground, the programme provides tailored business training to women entrepreneurs, facilitating business registration and enhancing access to capital and markets. In Sierra Leone, the programme, in partnership with the African Foundation for Development (AFFORD), is helping Louisa find a more suitable financial option that is both appropriate and feasible for her and her business needs so she is no longer as risk of drowning in debt. The programme is also helping her in developing and supporting her business. Louisa now employs 20 people full-time and has opened another guest house in the capital Freetown.

At the end of Louisa’s story, she closed saying, “I believe in my business, and very soon, I will convince financiers to believe and invest in my business and join me in creating more jobs and wealth for all Sierra Leoneans.” With such determination and smart thinking, it’s hard to ignore the pressing need to address women’s access to capital and to support women entrepreneurs, not just in Sierra Leone and but across the world.