Evaluating the Effectiveness of Incubating Women’s Collectives / Group Businesses for Replication

Abstract

Women’s entrepreneurship and economic empowerment are crucial indicators of global economic development as they contribute to employment creation and economic growth. In Kenya, about 36% of Small and Medium Enterprises are female-owned and contribute around 20% to Kenya’s GDP (Oxfam, 2023). Entrepreneurship provides a pathway for women to build their capacity and overcome barriers to leadership and decision-making (Harbison, 1956). While women running individual businesses/individual entrepreneurship has always been the norm, women have become increasingly determined to achieve economic empowerment through a variety of means, including collective/group businesses. An increasing number of women entrepreneurs have come together to run collective businesses for their individual and collective growth, financial stability, and economic empowerment.

Further, research shows that women entrepreneurs form groups to address some of the challenges they face individually. This however, is not new in Kenya, women have, particularly after independence in 1963 come together and bought land and built homes, etc., and later in the eighties and nineties, got involved in businesses that were quite substantive such as real estate. The history of women’s groups in Kenya is well documented and it is the reason why in 1976 the establishment of the Women’s Bureau, the Government took this strategy of working in groups and started funding small groups as is seen today in WEF, NGAAF, Youth Fund and Hustler Fund, and now even the commercial banks have taken this strategy to support women’s businesses. Women’s groups continue to be channels for women’s economic empowerment through collective entrepreneurial activities. However, despite being the fastest-growing category of entrepreneurs, women remain the most underutilized source of economic growth. Women entrepreneurs and women groups/collectives in Kenya also continue to face several challenges, such as limited growth and a lack of finances.

In light of the aforementioned challenges and the vision of full realization of WEE, the UoN WEE Hub initiated the Women-focused Business Incubation (WBI) project to assess what works in growing women’s businesses/enterprises through incubation. According to the American National Business Incubation Association (NBIA, 2015), business incubation is a support process that accelerates the successful development of start-up and fledgling companies by providing entrepreneurs with an array of targeted resources and services. Various national governments recognize business incubation programs as the mechanism to support small and medium enterprises (SMEs).

Through the Incubation project, the UoN WEE Hub, in collaboration with other partners, seeks to redress existing challenges to women’s economic empowerment by incubating individual women and women groups’ enterprises to assess what works in these initiatives for possible replication. The UoN WEE Hub Women’s Business Incubation (WBI) project evaluates how women-focused incubation models contribute to the growth of businesses and enterprises in Kenya.

Through the WBI project, The WEE Hub and its partners, CrawnTrust, TechnoServe and Sweet and Dried Enterprises Limited, and with technology transfer support from the Kenya Industrial Estates (KIE), the Kenya Industrial Research and Development Institute (KIRDI), the UoN Environmental and Biosystems Engineering (EBE) and support from Equity Bank are incubating 320 individual women-owned enterprises and 16 women’s collective/group businesses by 2025, which will then be replicated, with the UoN WEE Hub conducting monitoring and evaluation every six months. Through Access to credit, Linkage to information and technology, capacity building, Access to markets, and Mentorship, the project aims to achieve the growth and expansion of women-owned businesses and increase in revenue. Most importantly, informed policy and policy change are expected as part of the high-level outcome. Some services and training provided during incubation include Access to credit, Linkage to information and technology, Capacity building, Access to markets, and Mentorship.

To understand the needs of the collectives/group businesses, the UoN WEE Hub, in collaboration with CrawnTrust, conducted a baseline survey of 17 women collective/group businesses in 12 counties in Kenya, i.e., Nairobi, Kajiado, Kilifi, Kwale, Kisumu, Mombasa, Tharaka Nithi, Meru Kitui, Nyandarua, Turkana and Busia. The results from the fieldwork demonstrated various challenges that women-owned businesses face, ranging from limited finances, knowledge of the use of technology, and market access, among others, hence the need for incubation of women-focused businesses.

The baseline study’s findings revealed that: Women’s business collectives were founded on humble beginnings, frequently by women with a similar goal, after recognizing the needs of women-led businesses at the local level. The findings indicate that the collectives were formed to support the business needs of individual women at the grassroots. This is confirmed by a lot of literature on women’s groups in Kenya which have been in existence for a long time. Individuals join groups/collectives for growth opportunities, which are more accessible to groups than individuals. Furthermore, through the groups, individuals can address business challenges that would be difficult to manage individually.

Most groups are registered as social groups/chamas with the Registrar of Societies thus enabling them to register and manage bank accounts. Other kinds of registration, such as business or company registration are inaccessible to most groups since they cannot always meet all the requirements.

Table banking was identified as the most common group activity for most collectives/groups and the members’ primary source of affordable loans. Some of the challenges the collectives face include, limited access to established markets for their products, limited availability of technology and skills, limited access to credit facilities and affordable loans, and limited opportunities for growth and scaling up.