By Chinwendu Obienyi
Africa leads the world in terms of numbers of women business owners. In fact, women in Africa are more likely to be entrepreneurs than men and this is due to the fact that they make up 58 per cent of the continent’s self-employed population. However, most women businesses remain stuck at the micro level, unable to grow due to a range of factors.
According to a recent report, titled “Profiting from Parity: Unlocking the Potential of Women’s Businesses in Africa 2019”, the hindering factors include barriers to growth and profitability include social norms, networks and strategic business decisions. But the narrative is changing now in Nigeria especially as Access Bank Plc has taken up the mantle of empowering women by launching the “W initiative.
In this interview with Daily Sun, the Group Head, W initiative, Access Bank Plc, Ayona Aguele-Trimnell, speaks on its benefits so far and its recent partnership with Lagos State Employment Trust Fund (LSETF).
Can you speak on the Access Bank and LSETF partnership?
I feel excited about this partnership as it has been ongoing for a few months and it took a little time to put it together so that it would be beneficial to not just the bank but to Lagos state as well as our beneficiaries.
The W initiative is home to over 10 million female customers in Nigeria and probably the largest portfolio for female customers as well as female entrepreneurs. Since 2016 when we launched the W initiative, it was basically for it to be a non-stop shop for women entrepreneurs and so what we have tried to do over the last 6 years is ensure that we actually serve three different categories of women. We have women professionals, women in business and women at home.
Specifically we are talking about women entrepreneurs who are central to the economic growth of this country and so what we have tried to do is not only funding but capacity building over the last 6 years and we have spent billions of naira in doing so.
One of the reasons it was attractive and was approached by Lagos state and what is so exciting about this is that as much as they are giving billions out to women, we found a gap and the gap was that startup like one year old companies find it a little bit difficult to come up with documentation required for getting funding.
The second thing we find out is that the very small businesses were not able to access funding and so it was absolutely fantastic when we teamed up with Lagos state to see how we can serve women better. We all know that women businesses in Nigeria are 50 per cent of all the entrepreneurs we have in Nigeria. And this is a huge group but most of them sit slightly lower in micro and small businesses.
What this LSETF initiative does is that we are able to provide funding and capacity building to companies run by women and are 1-5 years old and they can take loans as low as N500,000 – N1 million. So it is not only about the people asking for N20 million or N30 million, we are going all the way down. And in some cases, LSETF provides funding for amounts lower than N500,000. With Access Bank, we offer funding from between N500,000 to N5 million.
Can you highlight some of the features that differentiate the existing W loan power and this new partnership with LSETF? Is there any discount in the interest rate?
This product has no collateral as we do not need any house or land to get the money and it is even further discounted. The W loan offers women funding at 15 per cent and with the LSETF, we are going lower to 10 per cent and so that they can grow their businesses and can buy with fixed assets.
I think it is a fantastic offering and there are obviously some other conditions where the women have to own 50 per cent ownership of their business and they must have been in business from 1-5 years. And before now, this has never happened in the financial industry in Nigeria and so we are really trying to cater for all aspects of women in every level be it micro, small, medium or large, basically, what Access Bank is doing through its different partners is being able to offer women loans at any point of their business journey.
Can your existing customers in W-Power loan switch from refinancing their existing loans at 15 percent to 10 percent or this for new customers or all your W initiative customers?
We have over 250,000 women businesses with the W power loan and a lot of them have been with the bank for years. And a lot of the capacity training that is being offered both to them and the LSETF loan is basically the same and is top class quality.
You probably cannot cancel your W power loan and run off to get a LSETF initiative. There are criteria but again I cannot say if you have a W power loan you cannot apply for LSETF, obviously it would depend on the capacity of your business or the capacity to pay back because it is not at the end of the day free money. It is possible to also get another loan through LSETF if all the criteria are met.
Since inception, how has loan recovery been for women under this initiative?
Women pay back their loans and because we have been in this business long enough, we know that if you emphasize to women that with the loan comes mandatory training and financial learning because you cannot run a business without knowing your profit, loss and what is coming in and out. So, if you are granted a loan, it comes with mandatory training because we know that if women get properly trained, the chances of them paying back are much higher. We also want these women to be repeat customers.
So, if you have loaned N500,000 and in one year you have repaid the loan, we would grant you more loans to grow and scale your business. It is no a case where we just want to collect their money, we want the business to grow. Statistics have shown that most small businesses are the biggest employers of our youth in Nigeria. So, we have to make sure we get these companies to a position where they are sustainable. So, for us, capacity training is very critical to this program.
Women pay back their loans better than men and I don’t want to say this as definitively, but our NPL is stated at about 2 percent. This is really good for female customers and that is why we are stepping forward to give these women more access to finance because they pay back. They know that their survival depends on the businesses they run. So, we have been very fortunate in W initiative that one of the areas we don’t worry about is payback. The default is very low.
Also, in our W academy, we work with the women and we have a very close relationship with our customers. We are constantly involved in what they are doing. We are constantly offering them programs and financial training and anything to help grow their business. In some cases, we help with taxation, marketing and whatever would help them to not only grow their business but also pay back their loans.
So, the default rate is pretty low and I think we have been very fortunate and we have had a very successful program.
How much loans have been given to women businesses through the W initiative?
In the last six years, we have given over N500 billion to women businesses in Nigeria. The portfolio is always growing and is a moving part. So far, we have given these loans to about 250,000 women beneficiaries.
Is Access Bank looking at a possibility of extending this form of initiative outside Lagos?
This is a pilot project for Access bank and we want to do this in every state because Access bank is one of the largest in Africa and we do not only serve in Lagos state, we serve in other communities and we have millions of branches across the country. Lagos state is one of the largest in the country and also an economically viable state and so we want to try it out here first and get it to work. We know it would work and I think it is something we want to replicate in other states. We know that other states are interested but for us, let’s do it right here first and then we can see how we would replicate it.
How much capital are Access bank and LSFET injecting to women businesses in this pilot phase?
We had matching fund. Initially, the matching funds was to be N2 billion from Access bank and N2 billion from Lagos state. But currently because we are just starting about a month ago, we have matching funds of N1 billion from Access bank and N1 billion from Lagos state government which is N2 billion accessible funds for female entrepreneurs at the moment.