Fracciones inversas y división de fracciones (Campo de problemas 8)

In reforming the Fund in a way that enhances its quality, service delivery and sustainability, two policy areas can be targeted; (i) growth and innovation and (ii) operational efficiency and sustainability.

5.7.1 Growth and Innovation Policy Options

Policy strategies to reform the Fund in terms of growth and innovation should focus on innovation enhancement, improved business monitoring, provision of individual loans, increase in the amounts of loans, enhanced and standardised training, increased funding to the CWES stream, business incubators for start-ups and enhanced revolving funds. As a strategy, integrating skills and knowledge on innovation in the capacity building processes and monitoring interventions will greatly increase the likelihood that, irrespective of their underlying profile, entrepreneurs who undergo the training process and also benefit from monitoring interventions will innovate in their businesses. Similarly, improving monitoring of enterprises that receive the WEF loans can improve their chances of overall performance. Remodelling the CWES stream funding towards more individual lending will be an effective strategy to give prospective borrowers the freedom of investment choice. The relevance of this strategy is located in the expectation that individuals are more likely to take greater responsibility for the overall performance of the business if they hold direct responsibility for its outcomes. In addition, decision making on innovations that can spur growth and their implementation can be faster of the entrepreneurs have adequate resources to support their ideas.

Evidence on the positive link between the size of loans and the odds that businesses will grow over the long term provides the strongest case for an increase in the amounts of loans allocated to women borrowers. It is clear that with bigger loans, more women entrepreneurs will be able to diversify products and services in a way that positively influences growth.

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Standardization of training will be one way of ensuring that women entrepreneurs gain both skills and competencies required to identify business ideas that can be converted to viably run enterprises. The provision of standardised training to borrowers can be premised on the finding that the socio-economic profiles of borrowers on both CWES and FI streams as well as urban and rural locations, were largely homogeneous. This homogeneity implies that the business skill and competency levels for most women entrepreneurs were similar, irrespective of the borrowing stream or geographical location. Study evidence on the performance showing that the CWES stream had higher rates of return and coverage compared to the FI stream means that increasing funding to the stream will not only improve coverage but will also ensures a rapid accumulation of more funds in the revolving fund kitty to finance bigger loans. Whereas bigger loans spur growth, improved coverage helps in achieving the very mandate for which the Fund was established; economic empowerment to more women.

5.7.2 Efficiency and Sustainability Policy Options

Enhancing the operational efficiency and sustainability of the Fund can be attained through improved field level staffing at the WEF, allocation of more resources to field teams, legal framework for defaults, rationalization of administrative costs, rationalization of Fund structure, increasing the number of loan holding banks, timely disbursement of the funds and simplification of the application process. An increase in the number of staff at the field level and allocation of more resources at this level would improve operational efficiency. In addition, better facilitated and remunerated field teams remain motivated thus increasing the likelihood that they will stay on. Closely related to the foregoing, is the need to improve the terms of work for the current group of field staff known as volunteers. These staff perform key functions as an interface between the Fund and the beneficiaries in the CWES stream. Improving their levels of remuneration will ensure that they are retained to help develop the local enterprise networks that they have already established.

The development of an appropriate legal framework for loan recoveries in the event of defaults would one be a significant contribution towards improving Fund efficiency thus helping reduce the non-performing loan portfolio, especially in the CWES stream. Rationalization of the administrative costs would ensure that the structure of the Fund is similarly rationalized. The cost saving from such rationalization would avail funds which could be channelled into bigger loans to women entrepreneurs. Increasing the number of loan holding banks would greatly enhance borrower convenience in making repayments to banks which are closer to them. This would help in reducing the overall cost of servicing the loans by eliminating the need to travel to make repayments in specific bank branches. Timely disbursement of the loans not only grants the prospective borrowers the opportunity to plan and implement their growth and innovation strategies but also builds borrower confidence in its reliability. Simplification of the application process would improve the prospects of more women entrepreneurs taking up WEF loans as opposed to the reported incidences of women borrowers opting for alternative sources of credit owing to the long procedures in applying for the WEF loans.

Finally, with regard to the institutional and policy framework, delinking the Fund from the Ministry of Gender, Children and Social Development would provide it with the necessary autonomy to make decisions and receive adequate funding. Additionally, re-packaging the Fund as contributing to an economic as opposed to a social mission would re-orient different stakeholders in the way they view the Fund and ensure necessary resources, support and attention is expended on the Fund to achieve the intended economic empowerment for the women.

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6.0 Conclusions and Recommendations