Access to finance is crucial for the growth of women-owned businesses in Somalia, as exemplified by Rima Abdukadir Ahmed’s success in scaling her sesame oil production through a loan from Premier Bank. Despite progress, women entrepreneurs still face significant barriers in capital access, underscoring the need for initiatives like the Gargaara Company to promote financial inclusivity and support sustainable enterprise development.
Rima Abdukadir Ahmed, a Mogadishu entrepreneur, transformed her sesame oil production from a traditional camel-powered method to a mechanized system using car parts. This innovation allowed her to increase output significantly, but it required additional working capital to ensure consistent supply. By securing a loan of $2,200 from Premier Bank, which was primarily based on her business reputation, Rima greatly expanded her operations, raising production from 150 to 400 liters per month. This was enabled by careful market analysis that informed the loan conditions based on her cash flows rather than collateral alone.
Access to finance is a significant challenge in Somalia, particularly for women entrepreneurs operating micro, small, and medium enterprises (MSMEs). Potential business owners face considerable hurdles in capital access, with only 21% of women-owned businesses having access to overdraft facilities. The Gargaara Company, established in 2019 and supported by the World Bank, aims to enhance access to capital for underserved businesses in productive sectors while promoting financial inclusion, particularly among women.
The transformation experienced by Rima Abdukadir Ahmed underscores the critical importance of access to finance for women entrepreneurs in Somalia. The Gargaara Financing Facility plays a vital role in offering support to businesses, yet challenges remain in ensuring equitable access and addressing existing disparities. The ongoing efforts to enhance financial inclusion are crucial for fostering economic growth and gender equality in the region, highlighting the need for continued investment and development strategies.
Original Source: www.worldbank.org
