Women Enterprise Fund in Kenya was first budgeted for in 2007/08. Its objectives are to promote women’s empowerment poverty reduction and national development.Women have been targeted for their pivotal role in families. Various studies show such interventions have fundamental impact on poverty reduction and economic betterment globally. The fund was started with a billion Sh ($25 million) kitties, with an initial Sh 1 billion ($12.5 million) allocation.
Women entrepreneurs borrow through contracted banks and financial institutions after presenting their business plans to the Women Enterprise Fund.
Low ownership of collateral (security) required to secure loans from financial institutions
The fund was motivated by the success of microfinance institutions such as K- Rep, Kenya Women Finance Trust and FAULU Kenya in their lending to women- based enterprises that have been recording over 90 percent repayment and contributing to the improvement of women’s wellbeing. The fund is implemented under the general direction of the Ministry of Gender and Children’s Affairs. Unlike the other funds, this fund was not set up through an act of parliament.
Reasons for the establishment of the Women Enterprise Fund in Kenya:
To provide affordable loans through existing micro-finance institutions, registered NGO5 involved with microfinance and SACCOs for on-lending to women enterprises
• To attract and facilitate investment in micro-small and medium enterprises oriented commercial infrastructure such as business markets or business incubators that will be beneficial to women enterprises
• To support women-oriented enterprises to develop linkages with large enterprises
• To facilitate marketing of products and services of women enterprises in both domestic and international markets
• To support capacity building of the beneficiaries of the funds and their institutions
Institutional framework of the WEDF:
Women Enterprise Fund in Kenya is managed though three institutions namely;
1) The Advisory Board:
This board oversees the management of the fund and advises the ministry on the operations of the fund. The board is headed by a non-executive Chairperson and has a Chief Executive and members of staff.
Composition of the advisory board
The Board consists of a non-executive Chairperson, the Permanent Secretaries in the Ministries of Gender, Finance, Trade and Industry, Agriculture and Planning, and five persons with expertise and experience in enterprise development and financial management.
2) Divisional women enterprise fund committee (DWEFC):
Composition of DWEFC
It is composed of the Chairperson (Divisional Officer [DO]), the secretary (Gender and Social Development Officer), the Treasurer who is elected by the committee members, a representative of the area Local Authority, a representative of women living with disabilities, a prominent woman entrepreneur, a representative of an FBO, a representative of the provincial administration and the sitting MP as an ex-officio.
Role of the Gender and Social Development Officer
• Secretary to the DWEFC
Monitors disbursement of the funds through financial intermediaries
• Facilitates loan recovery from the women groups
• Participates in the capacity building of groups that get the loan
• Recommend to the ministry groups which have been trained
Role of the DIVEFC
• Support the capacity building of the beneficiaries of the fund
• Create awareness on the Rinds disbursement procedures and requirements
• Assist in the mobilization, selection, identification and vetting of the women groups seeking loans
3) Intermediary Micro-finance institutions (Mfl):
Components of the funds are disbursed through micro-finance institutions. Most of the intermediaries are rural or urban based with large national networks to ensure effective disbursement to the rural based women groups.
They include: Family bank, Equity bank, Co-operative bank, and 1K-REP bank. Others are: Kenya Women Finance Trust (KWFT), Kenya Industrial Estates (KIE), Small and Micro-Enterprise Programme (SMEP), Pamoja Women Group and Jitegemee Credit Scheme.
Disbursement of the WEDF:- It is done through loans to the micro-finance intermediaries and through the constituency women enterprise scheme.
Loans through Micro-finance Intermediaries:
Here the lending component of the fund is through financial-intermediaries such as banks, NGOs, SACCO5 from which the women access funds to start or expand viable businesses.
The financial intermediaries lend the funds allocated to them from which women access funds directly either as individuals or as organized entities such as groups, cooperatives, and companies.