What you need to know:
- Research shows that women are more likely to opt for lower returns for minimal risk, with under half (46 percent) of men compared to 65 per cent women.
- Notify Logistics saw a total of 348 shops get 74 new entrepreneurs with each investor owning about 5 shelves to stock clothing, footwear, electronics, grocery and beauty products
Men have been less inspired by investments in small businesses in Nairobi during the pandemic compared to women, data released by a local firm has revealed.
The survey report released by Notify Logistics, which specialises in offering affordable rentals for businesses in Kenya’s major towns shows that fewer men were motivated to set up businesses as a resilience measure towards Covid-19.
“Over the past 9 months only 27.1 per cent of all our clients were men venturing into business in Nairobi, Mombasa and Kisumu. Women commanded 72.9 percent,” the report states.
But Boniface Mutunga, an expert in trade and finance says that men have continued to be weighed down by their superiority complex where they mostly choose to invest in high risk businesses targeting huge profits.
“For the 1.7 million Kenyans that unfortunately lost jobs during the pandemic, over 70 percent of those jobs were lost by male employees. The psychological effect of losing a job in the middle of a pandemic has hit men hard. So hard that they have been scared to invest their savings which they are also trying to balance with paying school fees,” he told the Standard.
When Joseph Kairuki lost his job from an insurance firm in June, he chose to spend the subsequent months deciding how to react to the new reality even as his family kept on depending on him.
“I have been monitoring the business situation in the country for the past three months before I decide how to invest my savings. I must be careful not to venture into unprofitable business,” he says, confirming how men have been skeptical to invest during the crisis.
The survey says that the pandemic has become a wake-up call to all women, after realising that depending on one person in the family for all household needs is catastrophic.
“More women have moved out of their comfort zones to contribute to the family kitty, no longer clinging to the very African mentality that where every man is expected to provide for his family,” notes the report.
Research done by a different organisation, Aegon shows that women are more likely to opt for lower returns for minimal risk, with under half (46 percent) of men compared to 65 per cent women, saying that their risk appetite is low or zero, preferring minimal potential losses with modest gains.
“Only 8 per cent of women have a high or adventurous approach to investment risk, compared to 18 percent of men,” it says.
Turbulent economic times
However, the idea of employed women owning business further closes the gender pay gap where the Census Bureau found that full-time, year-round working women earned 80 percent of what their male counterparts make.
While starting a business during the crisis has been baptism of fire for many Kenyan business owners, the data further reveals that more youths were ready to risk their finances and invest during the turbulent economic times rather than waiting for the end of the pandemic.
“The average age of investors during the pandemic was 27 years. The youngest is 21 years old while the oldest is 36,” the survey states.
Notify Logistics saw a total of 348 shops get 74 new entrepreneurs with each investor owning about 5 shelves to stock clothing, footwear, electronics, grocery and beauty products. Others are using them to provide services such as mobile money, hair care, electronic repairs and photography.
"When I was retrenched in April, I went into the grocery business in the CBD. I have always used WhatsApp to advertise the juice and pudding I make at home but during the pandemic I moved to the city to get more customers," said Cynthia Ongoro, one of the shop owners on the Notify platform along Tom Mboya Street, Nairobi.
In August, the firm invited business owners and individuals to invest in the shelves. The program was started to help individuals recover from the effects of the pandemic and invest any extra they had to earn more at the end of the 12 months.
The introductory phase -phase 1 saw individuals get a return on investment of 87 percent while Phase 2 which ended on October 7 saw investors earn up to 71 percent return on their investment.
Notify Logistics now plans to open a mega store in Nairobi on October 15, in its phase three initiative that will target online small business ventures that have cropped up during a period where directives to control the virus have favoured e-commerce transactions.
Its Buy-2-Rent programme allows individuals to own a shelf within the Notify shops and earn rent from the shelf. It ensures the shelf is occupied by the time one buys it hence minimizing the risk of lacking a business to rent your shelf.
“We have created an AirBnB business model of earning from commercial space, enabling individuals to invest in a shelf in the Notify platform with zero management,” said the firm’s Chief Executive Waweru Nderitu.
He adds that the purpose of the project is to help people get through the pandemic since many people have lost income streams.
“As a company we thought it wise to have a product that will help households get new revenue streams. We have been completely amazed by the response received so far and have already begun working on a phase 3 of the program that will be launched later this month,” he said.
For Rent-A-Shelf, the firm identifies a shop in a prime location in an urban centre and partitions it into shelves. It then hires shop attendants and gets all the necessary licenses for the shop.
“We don't charge commissions on sales, we allow the businesses to build a database of their clients as opposed to the current online shops which do not allow sellers to have contact info of their clients,” he explains.