Mobilise social capital for women to aid post-Covid-19 financial recovery

Covid-19 has had devastatingly disproportionate effects on women and girls, more so in developing countries, with 2020 data showing the pandemic may push up to 47 million of them into extreme poverty.

Like most countries, Kenya has experienced poverty occasioned by the widespread loss of livelihoods due to the pandemic response measures, including school closures, movement restrictions and night curfews. The affected were mostly those in the informal sector, majority of whom are women.

A 2020 Kenya National Bureau of Statistics (KNBS) survey indicated that 30.5 per cent of households were unable to pay rent on due date owing to reduced incomes. The report said 41.9 per cent of the households had cut on financial spending on non-essential commodities. About two in every 10 respondents cited lack of food as their main worry.

The reported increase in cases of gender-based violence and particularly intimate partner violence during the pandemic also indicates the gendered impact that Covid-19 has had on communities. KNBS figures show 24 per cent of the respondents reported having witnessed or heard cases of domestic violence in their communities since the introduction of Covid-19 containment measures.

With the increased hope brought about by development of vaccines, many countries now look forward to economic recovery, albeit slow. Post-pandemic recovery measures are, therefore, key areas of focus for governments.

Response protocols

In Kenya, the focus will most likely be on rebuilding the many small and medium-sized enterprises (SME) that were affected by the government’s response protocols. There is a need to focus on rebuilding informal microenterprises, most of which are woman-run and/or -owned and hugely contribute to the overall economic empowerment of not only women but also lower-income households.

Kenya’s informal sector covers mainly small-scale activities that are normally semi-organised, unregulated and use low and simple technologies. In 2017, GDP growth was projected at 6.4 per cent with SMEs contributing three per cent. The “2020 Economic Survey” estimated the number of players at 15.1 per cent. With shrinking formal job creation, most of the youth who finish school easily join the informal sector.

One key strategy by women to empower themselves economically over time has been self-help groups, or chamas. These are used to pool and invest savings, pulling thousands out of poverty. Many have leveraged their unity of purpose and vision to access bank credit and grow businesses.

Voluntary membership and focus on mutual assistance puts chamas among the most effective avenues for women’s economic empowerment, especially in rural areas and informal settlements.

Studies show that women have learnt on the groups during the pandemic for mutual support, even though not as intensively as before Covid-19. But with the loss of livelihoods, women’s capacity to initiate and sustain successful chamas may have been decimated.

Economic livelihoods

Part of rebuilding the economic livelihoods of women in Kenya post-pandemic should be nuanced from a three-prong perspective. First, the chamas need an inward and outward perspective to thread a web of resilience and sustainability. They should organise themselves into investment groups.

Secondly, financial institutions should then lower the cost of credit for such groups to allow them access capital for small-scale businesses and other economic activities. Thirdly, rebuilding the chamas requires awareness on how to access financial aid from government agencies such as the Women Entrepreneurship Fund, Youth Entrepreneurship Development Fund and Uwezo Fund.

As the country works on post-pandemic recovery strategies, women will rely on the transparency with which funds are accessible to registered chamas, which seek financial support, as well as government’s support in strengthening their capacity to be transformative.

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