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‘On our way to Pitily’s soap factory’

Connectivity, profit and what else? Women entrepreneurs benefiting from ICT innovations

By: Saskia Vossenberg | 28-06-2016 | Opinion

How can ICT innovations, in combination with mobile phone ownership, open up new opportunities for women entrepreneurs in a resource constrained setting like Malawi? Do ICTs spur business growth and job creation and, if so, for whom? Do they contribute to inclusive economic development, as donors are enthusiastically proclaiming? With these questions in mind Saskia Vossenberg set off to Mzuzu in the Northern Region of Malawi, where she met William Sibande, project officer of the GROW Movement Malawi (the GROW Movement operates in Uganda, Rwanda and Malawi).

This is the second blog post by Saskia Vossenberg, who is travelling in Malawi to collect stories of female entrepreneurs using technological innovations to grow their businesses. She is accompanied by research assistant Tanja Hendriks. The first blog post appeared on 9 May.

The GROW Movement is a private network of international volunteer business consultants who use ICTs to build the business skills of African entrepreneurs. The outlook: local job creation and increased profitability. The concept works by matching international business consultants with entrepreneurs in Malawi to provide them with information on how to improve marketing, bookkeeping, financial planning and customer relations during 12 free one-on-one sessions via Skype, WhatsApp or telephone. GROW works in close partnership with the National Association of Business Women in Malawi (NABW) and, since it commenced in 2013, over 200 women entrepreneurs have used its services.

William in the GROW office

William in the GROW office

Making technology work in imperfect rural conditions

William shows me the dongle on his laptop that connects him to the Internet. He explains how it works. Sometimes the women enrolled in the programme come to his office in Mzuzu town to chat with the business consultant. But, usually, William travels around in his car with his laptop and dongle right to women’s homes and business locations. Power cuts are a daily reality and the Internet is more often off then on. And when it’s on, there’s not enough bandwidth, so Skype is a challenge. “Better Internet infrastructure would really help us to reach more women, especially in the rural areas.” When he can’t connect the dongle, William lets the women use WhatsApp on his own mobile phone to talk to the international business consultant.

William tells me that GROW wants to expand its consultancy services to a rural growth centre located about 45 kilometres out of town. “There are plenty of women there running businesses, but without access to business development services. In addition to a failing Internet connection, they cannot speak English, so we are now figuring out how we can overcome the language issue by using translators during the sessions.”

What strikes me is that William is constantly improvising and strategizing to make technology work in Mzuzu’s challenging local reality. Merely having the technology available and the system set up does not mean that women entrepreneurs can access it; the needed support systems often fail. Some women who use GROW do not know how to use a mobile phone or email. Or they do not own a computer and cannot make their way to GROW’s office because of the high cost of transport. Other women have demanding care responsibilities at home, cannot leave their business or are hesitant to join the programme because of fear of failure. In those cases, William brings his phone and laptop to the women to encourage them to connect with the consultants. And, if necessary, he helps by reading or writing WhatsApp messages and emails.

Making it work: sensitizing husbands and families

When a new entrepreneur enrols in the GROW programme, William visits her home to introduce himself to the husband and rest of the family. This is very important he explains: “Our culture prescribes that women should be at home, carrying out domestic chores and caring for the children. Husbands can become worried or suspicious when they find their wives talking a lot to our business consultants”. So William consciously sits down with couples to discuss what to expect from the GROW programme in order to prevent contentious marital situations, which can hamper women’s participation and even result in them dropping out. The GROW Movement recognizes that without human and social efforts to facilitate and translate technology into a particular local setting, ICT-related innovations will probably only reach those entrepreneurs who own (and know how to use) a phone or laptop, live in an urban area with proper Internet services, have access to transport, are able to read and write English, and have understanding and supportive spouses.

Sella in her shop with an employee

Sella in her shop with an employee

New skills and more profit for women entrepreneurs

How exactly do women entrepreneurs benefit from GROW? While in Mzuzu I met with women who run a variety of local businesses, including a soap factory, chicken hatchery, nursery school, stationery shop, grocery store, mining and cross-border trade. The GROW Movement measures its success by profitability and the number of jobs created. I have heard countless stories of women learning new skills that have increased their profits. For example, encouraged by William and her consultant, Pitily Tembo started visiting different neighbourhoods at set times, walking with see-through buckets on her head filled with her soap bars. This helped her tap into a large new pool of paying customers. Sella Chiume, a cross-border trader who started to market her fabrics more effectively and keep a record of her stock, learnt which items sell fast and which don’t. This helped her to manage her cash flow. Some women have created a few local jobs since using GROW, although generally informal, irregular and low-skilled piece work.

‘It keeps you going’

In addition to economic outcomes, I’ve heard stories of how enrolment in the GROW programme benefits women by making them feel encouraged and supported – not just to continue their business, but also to sensitize husbands and community members about the value of doing so ‘as a woman’. Some women run their businesses purely for survival, to secure an income or a pension. Others run their businesses to improve their quality of life or as an additional source of income to pensions or remittances. Others want to ‘stay active’ and have a social network. As one woman put it: “I’d rather be bored at my business without customers than be at home all day catering for my husband who cannot even boil an egg”.

Whatever the motivation to run a business, in a place like Mzuzu, where entrepreneurship means one step forward and ten steps back and where women entrepreneurs have to go it alone, it is encouraging to know that someone out there recognizes you as an entrepreneur and cares about your daily struggles and your business endeavours. “It keeps you going”.

Multiple challenges remain

However, reinvesting the profit into the business and securing the income of hired workers is a major struggle for these women. They face multiple challenges, which remain untouched by the GROW intervention. Women use their profits for food, school fees and home improvement. Due to extreme inflation, fuel and food prices in Malawi are high. But, if possible, part of the profit is used to keep the business running or set aside for reinvestment.

Pitily now has a new source of customers, but she is failing to produce at capacity, because a key ingredient for the production of her soap is stuck on a truck somewhere between Tanzania and Malawi. Sella knows what to stock, but cannot travel to Tanzania frequently to buy fabric because she doesn’t have enough money to pay for the transport and all the necessary bribes along the way. And, with an interest rate of up to 40%, a bank loan is not an option.

Profitability does not automatically lead to business growth

Using a frugal and inclusive strategy, GROW manages to operate at a low cost and yet deliver quality and accessible business consultancy services. Clearly, the women entrepreneurs who use GROW benefit in terms of profitability. But the women entrepreneurs I met can only do so much with the profit: they face rigid social role expectations, poor infrastructure, costly health and education services, immobility in accessing markets and inadequate business financing. These issues are, of course, outside GROW’s control. While closing the digital gender gap by providing skill building and market information by using ICTs is a valuable contribution to the entrepreneurial endeavours of women, it is not a panacea for the multiple issues they are dealing with. Increasing profitability does not automatically transform women’s entrepreneurship from a survival strategy into a strategy of business growth, or supply decent jobs. It does, however, provide valuable encouragement to women entrepreneurs who are constantly redirecting their strategies to cope with the daily challenges arising from their social and economic environments, and stretching the boundaries of their own labour and management capacities.


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Claire Jenkins

2016-06-29 15:06

Hi Saskia,

We LOVED having you on the ground and thank you for taking the time to join us and meet with our amazing clients. Some questions for you:
a) Where we don’t transform into business Growth, do you think
i) we could have done? Have failed to do a decent job for the client?
ii) Have selected the wrong clients to work with, ie there was no point in starting with them in the first place?
b) What clarifies as a decent job for you?
c) Any areas that you thought we could improve on?

We love to learn at Grow Movement so appreciate your in put!

William Sibande

2016-06-30 21:06

Great to have you with us Saskia. Let us also know if the target group we are working with is OK with you (ladies,men,and youths inclusive) and also geographical set up if it is good to work with rural as well as urban people although we know the programme is aimed at improving the welfare of all people

Saskia Vossenberg

2016-07-11 09:07

Dear Claire and William,

Thank you for your questions, they are important and interesting.
Claire, earlier this year we produced a policy paper at INCLUDE that discusses ‘what works’ when strategizing for women’s business growth in Sub-Saharan Africa. The paper summarizes and analyzes research findings on the topic and presents recommendations and good practices for policy makers and development practitioners. I find that your questions very much resonate with the content of that paper.
Research findings for example indicate that the performance and status of a business does not depend solely on individual characteristics or capacities but also on the level of support and limitations produced by the institutional context of the entrepreneur. A lack of appropriate and adequate regulatory, normative and cognitive institutions explains why graduation of survivalist micro-enterprises from very small to medium sized rarely happens. Research also suggests that it is still possible but it requires, however, an intervention rationale more attuned to the risks, aspirations and circumstances of survival entrepreneurs. Survivalists need an ‘intensive package of services’ offered by various stakeholders, including government, that systematically integrates business growth strategies with strategies that reduce vulnerability, inequality in access to resources, education and infrastructure and promote equality in the household (Buvinic et. al., 2013).
So in the cases where women have not (yet) transformed from a survival strategy towards growth I don’t think this is because GROW has failed to serve its clients, on the contrary. In these cases it is other institutions that are failing your clients and thus mediate your impact. To illustrate, support to improve marketing strategies of female entrepreneurs to enlarge the pool of customers is very helpful. But not having a car, cash for gas or even a proper road at your disposal is a serious constraint when serving customers. If the Malawi government can find a way to control inflation and build that road, things would definitely become easier. Another client of GROW described to me how she consciously ‘waits’ to expand her business because now a lot of her time and cash is spent on the care for her parents and in-laws who are sick and fragile. Paying for their medical fees and transportation costs to the hospital in the capital (there’s no good hospital nearby) requires her to leave her business frequently. In these cases women entrepreneurs have to deal with poor infrastructure, inadequate health services and a struggle to balance their business with care responsibilities. They barely make enough income to re-invest in the business and not expanding their business beyond the limits of their own labour and management capacities makes a lot of sense for them. All that said, in a context like Malawi where so many public and private institutions are failing its citizens, I think it is extremely important to support women entrepreneurs in their strategies to survive, operate a business and sustain a certain standard of living for their families. But in order to transform a survival strategy into a growth strategy, I believe more is needed.
This relates to your question ‘have we selected the wrong clients to work with, was there no point in starting with them in the first place?’ It is perhaps not a matter of ‘doing it right or wrong’, but research does indicate the importance of understanding how different types of entrepreneurs need different types of support. When it comes to entrepreneurship development strategies, the literature suggests that ‘promising entrepreneurs’ are the group that is most likely to benefit from interventions and improvements in the broader business system (Gender-Global Entrepreneurship Development Index, 2014). This group, sometimes also referred to as ‘constrained gazelles’, are women who are already engaged in entrepreneurial activity, operating in the ‘upper tier’ of the informal sector, not yet very successful, but sharing some characteristics with growth-oriented entrepreneurs, such as educational background, sector choice and management capacities (GEDI, 2014; Grimm et al., 2012). In contrast to survival entrepreneurs, this group has a potential to grow and create jobs, but possesses very little financial capital and can be constrained by care responsibilities that their gender role prescribes. When it comes to ‘targeting’ it can be beneficial to isolate this group from survival entrepreneurs for tailored support. But distinguishing one from the other is easier said than done. Partly because entrepreneurial motivations and capacities may change over time, depending on the life phase or circumstances entrepreneurs are in. What would be helpful for you in terms of ‘targeting’? A set of indicators?

b) What clarifies as a decent job for you?

The International Labour Organisation (ILO) defines a decent job as “opportunities for work that is productive and delivers a fair income, security in the workplace and social protection for families, better prospects for personal development and social integration, freedom for people to express their concerns, organize and participate in the decisions that affect their lives and equality of opportunity and treatment for all women and men”. In the context of Malawi achieving
‘decent jobs’ poses serious challenges and controversies. Within the current economic hardship ‘any job’, albeit informal piece work, can be considered a win. But when thinking of ‘a supply of decent jobs’ as an outcome of inclusive development, especially in a resource constrained area like Malawi where vulnerability to poverty is huge, it is important to better understand what entrepreneurship development interventions lead to the creation of ‘informal, piece work’ and what interventions contribute to a supply of ‘decent jobs’. And where and when do entrepreneurs graduate ‘informal piece work’ into a ‘decent job’? Of course, it is not only the responsibility of entrepreneurs to produce ‘decent jobs’. Offering depressing wages and working conditions is often the only way to
stay competitive because of (again) failing public institutions.
In 2011 a new Pension Act was adopted in Malawi. It requires that all employers provide retirement and life insurance benefits to their employees, and that they enroll employees earning more than MWK 10,000 (US$ 31) per month within 12 months of employment. I wonder when and how it is feasible for women entrepreneurs in Malawi to comply with this Act? Would it require formalization of the business first? Business formalization was no ambition of the women I interviewed, for good reasons probably. So indeed, how would this work? And is there a role to play for GROW?

c) Any areas that you thought we could improve on?

In the INCLUDE policy paper on strategies for women’s business growth it is recommended that entrepreneurs’ household and family circumstances are integrated in entrepreneurship development interventions. In the case of GROW it might be interesting for the entrepreneurs and business consultants to also share experiences and strategies about household and personal issues, in addition to business skills. For example: how to balance a business, family and marriage? Or how to plan for a business as a security pension for old age? Perhaps the National Association of Business Women in Malawi (NABW) can play a role in gearing up in terms of lobby and advocacy towards local and national government to address issues of infrastructure, education and health-care needed for thriving entrepreneurship? And I know that GROW is exploring alternative and affordable ways to finance business investments and ideas for expansion of women entrepreneurs; very important!

And William,
Yes, I think it is important that GROW reaches out to women, men AND youth both in urban and rural areas. However, different groups of entrepreneurs need different types of support because they may face different constraints depending on their gender role (as husbands, wives, divorcees or widows) and phase of life they are in (as single mothers, fathers or caretakers of brothers, sisters, parents and in-laws). The challenge is how key actors can offer tailored and effective support to serve the needs and aspirations of different groups when financial resources and support systems are limited and scarce.

Rebecca I Kiconco

2016-09-28 12:09

Thank you Saskia for sharing your work.

I would like to add to the discussion findings from Uganda.

The context of Uganda paints a picture of economic growth, which is largely attributed to the minority. A case in point is ‘though over 80% of the workforce is in the agricultural sector, this sector in particular contributes only 37% to GDP growth’. A clear description of growth plus marginalization not equating to development. Imagine a situation where 80% of the workforce had an equal or almost similar contribution to economic growth. The questions then arise, what is driving the agricultural sector? Why is the agricultural sector labor force not at par with its contribution to economic growth? Could rural entrepreneurs being the majority of the labor force in this sector explain the disproportion?
Taking the widely known Abraham Maslow’s theory of human needs, individuals and entrepreneurs in rural Africa being no exception need to attain their physiological goals inclusive of food, water, shelter and clothing prior to any safety needs which include financial security. Most entrepreneurs in rural Uganda are in the agricultural sector. It indeed comes as no surprise that women entrepreneurs under the umbrella of GROW in Malawi use their profits for food, tuition for their children and home improvement. This situation rings true for rural women in Uganda where Bakesha, Nakafeero and Okello, (2009) report that despite grassroots initiatives to empower women entrepreneurs economically to improve their businesses, most of them could not make significant progress as they spent much of the proceeds on household needs and their children’s welfare. Predominantly, entrepreneurship in rural areas is survival based and motivated by social goals, characterized by high illiteracy levels and deep embedded cultural norms. This state of affairs renders it complex to separate business ventures from family issues and puts a toll on growth, profitability, innovation, and exploration of opportunities for female rural entrepreneurs. Therefore, interventions proposed should consider marrying social goals and economic goals alike. This will ensure the policy makers speak the language rural entrepreneurs understand.
Rural women entrepreneurs in smallholder farming are largely constrained by the long-standing traditions. Several women do not own land and land ownership or use rights are usually with the men. Therefore, the men feel entitled to the land’s proceeds even though the women do the bulk of the work. Women thus feel oppressed and not supported by the status quo in traditions. However, research carried out by Romijn and Kyejjusa (2016, forthcoming) reveals that in the more unconventional businesses carried out by the rural women entrepreneurs such as agro-processing, men supported their wives. Though most men gave no active help, they did not interfere or impede actively. Some women indicated that their husbands lacked the skills and knowledge to be of any help to them. However, could this be attributed to the gender relations, the case of the men having no stake in the business, unlike in the cultivation business where the man owns the land or could this be attributed to context-specific attributes of survival versus constrained gazelles? Might gender relations and embedded traditions perhaps explain the larger constraints between the growth potential between survival and constrained gazelles?
The mobile phone as an innovation tool for women entrepreneurs in Uganda
Changing the mindset of Ugandan entrepreneurs, From Muppets to Gazelles (MTG) a research project funded by NWO-WOTRO, is engaged in examining and investigating mobile phone usage among rural entrepreneurs and the extent to which this has contributed to their use of mobile money, a financial inclusion tool. Though initially set up in 2007 to create a service which would allow micro-finance borrowers to conveniently receive and repay loans using the network of Safaricom in Kenya, mobile money has become widely known as the tool the encloses the “unbanked” into the financial circles.
Mobile money is a mobile wallet/ like a bank account, however on a phone. It is not only safe as access is only by a secret pin code, but is ubiquitous, realizable with low transaction costs. Mobile money supports money transfers to extended and immediate family members, payment for goods and services, payment of bills and linkages to bank accounts. In addition, mobile money can act as a book-keeping tool for entrepreneurs through record keeping of all financial transactions over the phone and a saving mechanism through storage of funds.
Indeed the primary medium of operation of this system is a mobile phone. This is precisely the reason why albeit the wide diffusion of mobile money, further scrutiny depicts a different picture. One would argue that the wide diffusion of mobile money equates to success in bridging access to financial solutions among marginalized communities. Results from this project research show that there is great disparity in mobile phone competencies in rural and urban settings based on observations, in-depth interviews, skills/competence measurements, as well as use of various mobile money services. Conditions similar to Mzuzu’s reality are evident in rural Uganda as well. Women do not have the basic competencies to operate a mobile phone. This provides the gaping loopholes which mobile money still needs to fill. Realities in the rural communities point to the indirect use of the mobile money system due to the low literacy and numeracy skills. Mobile money agents, literate children, relatives, neighbors, and well-wishers are the main proxy users of the system and therefore cases of fraud are rampant and widely reported. The minority in the rural areas that have not adopted mobile money cite fraud as the number one reason for non-adoption.
The MTG project is looking into an intervention based on equipping the women entrepreneurs with mobile phone and mobile money competencies in addition to basic financial literacy training over the coming months. We note however, that changing entrepreneurs from the survival mode to growth orientation necessitates more than individual development and as Saska (2016) relates, government and relevant policies tackling education, infrastructure development, access to health care, gender sensitivity, and a holistic view of inclusive development are important ingredients to achieve impact.


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