IN the Sunday Times edition of November 13, the American management guru Tom Peters stated that “the world has entered the age of Womenomics”.
He went on to say that only about two percent of companies worldwide understand this trend.
The 120 women who attended the ILO “Women & Finance” Fair last week and many others besides who could not be accommodated in the venue are clear testimony of Peters’ observation.
Without abandoning their wifely and motherly duties, women are taking their rightful place in the economy — they just need a helping hand along the way.
That helping hand came in the form of a presentation by Deputy Registrar of Companies, Florence Motoa, whose speech was punctuated with applause from the women.
The new Companies Act of 2011 which replaces the one of 1967 has not only simplified the company registration process but has made it cheaper for small businesses to run their operations.
The following are a few salient points and you are encouraged to visit the One Stop Shop at the Ministry of Trade to get more information:
For certain businesses such as consultancy, the need for a sub-lease and health inspection certificate has fallen away, meaning that women can work from home.
This translates into savings as rent is no longer required and transport costs will also reduce;
One person company — a person can now form their own company without the need to partner with another; and services of a legal practitioner are no longer required to register a company and this will result in cost savings for everyone.
It will be interesting to see how Lesotho fares in the next release of the World Bank Doing Business Report.
Our No. 143 out of 183 position has been largely because of the time it used to take to register a company at the lawyers, find business premises and obtain an inspection report.
Since these have been done away with, we can expect to climb a few notches up the ranking.
These legal reforms including those that will facilitate the setting up of a credit bureau and small claims court mean that Lesotho is well on its way to implementing some of the
recommendations made in the October 2011 report, Strengthening Access to Finance for Women owned SMEs in Developing Countries available on www.ifc.org.
These include regulations to encourage formalisation of businesses and expansion of financial infrastructure such as credit bureaus which may hopefully reduce the cost of borrowing. Banks will find it easier to vet applicants and one’s good credit record can assist in accessing loans.
The discussion between the women and financial institutions namely, Nedbank Lesotho, Metropolitan Lesotho and Moliko Finance was interesting.
There was a small group who felt there is favouritism, unfair delays and unaffordable products and services in the market.
Others lamented the fact that their businesses are struggling and felt the term “salary” is only applicable to employed women.
However this view was countered by those who are existing clients who gave an account of their satisfactory experiences with the service providers. Furthermore, Ms Hlongwa of Lebesa Chartered Accountants made the point that a businesswoman should be operating a business which is able to pay her a salary every month.
The presentations and ensuing discussions raised some interesting issues.
The profitability and sustainability of some of the businesses women are operating is low and furthermore the record-keeping may not be up to the level required by a bank.
Financial institutions are aware of these challenges that businesswomen are facing but as risk averse entities, they are unlikely to make lending decisions based on sentiment alone.
There are some short-term solutions such as training women in financial literacy and other business related skills.
However in the long term, there is a need for the identification of unique business opportunities, mentoring and the facilitation of market access for women.
Access to finance is of no use without a market.
The banks still have a role to play in making access easier and training of their lending officers in being more responsive to women applicants is required.
This and the mentorship programme for women is something the ILO will be rolling out in the near future.