Credit Awareness Nigeria

CAPACITY BUILDING/ACCESS TO FINANCE FOR WOMEN

ENTREPRENEURS

Committee of Women LeadersLAGOS CHAMBER OF COMMERCE

25th OCT. 2013

Credit Awareness Nigeria

DON’T LIMIT YOURSELF. MANY PEOPLE LIMIT THEMSELVES TO WHAT THEY

THINK THEY CAN DO. YOU CAN GO AS FAR AS YOUR MIND

LETS YOU. WHAT YOU BELIEVE, REMEMBER, YOU

CAN ACHIEVE.…….Mary Kay Ash, founder Mary Kay Cosmetics

Credit Awareness Nigeria

CASHFLOW MANAGEMENT FOR

FEMALE ENTREPRENEURS

BY:

NNEKA ENELICREDIT AWARENESS

• Introduction •The Focus on Women• Spending Patterns• The need for financial literacy• Definition of Cashflow• Sources of Cashflow• Types of Cashflow• How to manage your Cashflow • A Simple Cashflow Projection

POINTS OF DISCUSSION

• Nigeria is the most populous nation in Africa with a population size of about 162.5m. It accounts for half of West Africa’s population and over 25% of sub-sahara Africa.

• Of this 162.5m, 49% are women; 80.2million girls and women.

Over half of the population (15-64) is young and active.

INTRODUCTION

Female entrepreneurs and managers appear to be instinctive CASHFLOW MANAGERS but is this ENOUGH?

THE FOCUS ON WOMEN

This is because:• They play multiple roles at home, at work, in the community, etc.

• Prudence and cash management seem to be a natural part of the socialization process for the female child and woman

• Nearly 6m young men and women enter the labour market each year but only 10% are able to secure a job in the formal sector and just one third of these are women.

• 1 in every 5 businesses is run by a woman but the major constraint is lack of capital and they have to rely on their savings.

• 1 in every 3 employees in the non-agricultural formal sector is a woman.

• Girls and women have the potential to transform Nigeria. As female entrepreneurs, women:Contribute to economic growth

Contribute to creation of employment

Have been increasingly recognized to enhance the diversity of entrepreneurship in any economic system.

Provide avenues for female expression and self-fulfilment.Verheul et al, 2006, Jamali, 2009, Eddleston and Powell, 2008

WOMEN

SPENDING PATTERNS OF WOMEN

Older Groups (30 – 45 years) / Married•Retain some as savings•Pay tithe•Plough into / establish own business•Bills (school fees, health, electricity, waste disposal)•Assist dependents•Communication (airtime, mobile handset)•Fuel (cooking, car, generator)•Pay salary (house help, shop attendants)•Leisure (vacation, eating out)•Personal grooming / fashion (females particularly)•Transportation

Efina 2012 Gender Survey Report

SPENDING PATTERNS OF WOMEN

Younger Groups (18 – 29 years) / Single

•Retain some as savings•Pay tithe•Train self on desired skill (music equipment, computer, web design)•Pay for professional exams•Paying blackberry subscription•Food (eating out)

Efina 2012 Gender Survey Report

• In business, while instinctive cash management may be a necessary asset, it is not sufficient.

• It is often affirmed that women have less financial knowledge and lower access to financial products than men

although

More commonly, women are said to be better borrowers and more likely to pay back loans than men.

HOW TRUE IS THIS???

!

STATISTICS

• 53.5% of the Unbanked population are females• 78.3% of the Unbanked population live in rural areas.• 9.7% of the adult population currently have loans.• 3.8% of the adult population use microfinance services.

Further revelations• People lack information about banks• Never think about banking• Can’t read or write• Prefer dealing with cash• No proper identification

According to the finscope survey carried out by EFInA in 2010

• A business run by a woman can fail just as much as a business run by a man when cashflows are mismanaged.

Problems arising from mismanagement of funds are not gender biased so a woman needs to be on top of her game just as much as any of her male counterparts.

• Women in business often face peculiar situations and even social pressures which make them especially vulnerable to poor cashflow management and its consequences.

This ranges from the more sublime (need to care for a sick relative from business proceeds to the mundane (aso-ebi for a big social event).

• It is important for women to understand the impact of cashflow cycle (deficits and surpluses) on their business and to know how to manage this cycle effectively.

THE NEED FOR WOMEN TO BE FINANCIALLY LITERATE

THE NEED FOR WOMEN TO BE FINANCIALLY LITERATE

To be able to make informed financial decisions for yourselves and your families

• For better management of household and personal finances

• To gain confidence

• For empowerment

• To enable you make the right choice among an array of financial products and better access to financial services. (Consumer Protection).

• To develop and properly manage entrepreneurial activities

• To properly utilize programmes promoting women’s entrepreneurial activities.

The combination of awareness, knowledge, skills, attitude and behaviour necessary to make sound financial decisions and ultimately achieve individual financial well-being.

WHAT IS FINANCIAL LITERACY?

One of the targets of the Microfinance Policy for Nigeria is to eliminate gender disparity by ensuring women’s access to financial services increases by 15% annually.

VARIOUS INITIATIVES FOR WOMEN:BOI - Financing Scheme for female entrepreneursAGOA (African Growth Opportunity Act)YouWinGoldman Sach’s 1,000 Women Initiative

FURTHER CONSIDERATION FOR WOMEN

Credit Awareness NigeriaCASH???

• Cash is Liquid.

• It is fungible (so it can easily get mixed up with other things and purposes if not properly accounted for).

• Cash inflows are easily misconstrued as profit.

POINT TO NOTE: More businesses are likely to fail due to lack of cash than for want of profit.

KEEPING YOUR EYE ON THE BALL – WHY IS CASH SO TRICKY EVEN FOR WOMEN?

‘CASH IS KING’

THE CRITICAL LIFEBLOOD OF YOUR BUSINESS

CRITICAL FOR THE SUCCESS OF ANY BUSINESS

CASH PROFIT

NOTE!

The ultimate aim of running a business is to make profit.

Profit = Total Revenue - Total Cost

Net Cashflow = Total Cash Inflow – Total Cash Outflow

For your cash to grow, you must be making profit.

NOTE!

What Is Cashflow?

SOURCES OF CASH INFLOWS INTO YOUR BUSINESS

SOURCES OF CASH OUTFLOWS FROM YOUR BUSINESS

TYPES OF CASHFLOWS

Credit Awareness Nigeria

IMPLICATIONS OF A NEGATIVE

CASHFLOW???

Credit Awareness NigeriaWHAT DO YOU DO?

• PLAN! PLAN!! PLAN!!!

• PROJECT! PROJECT! PROJECT!

• Manage inflows so that they are faster than payments.

BASICALLY…….

Credit Awareness Nigeria

HOW?

HOW TO MANAGE YOUR CASHFLOW

HOW TO MANAGE YOUR CASHFLOW 2

HOW TO MANAGE YOUR CASHFLOW 3

HOW TO MANAGE YOUR CASHFLOW 4

HOW TO MANAGE YOUR CASHFLOW 5

HOW TO MANAGE YOUR CASHFLOW 5

HOW TO MANAGE YOUR CASHFLOW 6

HOW TO MANAGE YOUR CASHFLOW 7

HOW TO MANAGE YOUR CASHFLOW 8

HOW TO MANAGE YOUR CASHFLOW 9

A WORD OF ENCOURAGEMENT

A Simple Cashflow Projection

In Summary

CREDIT AWARENESS: An Organisation established by SIAO IN 2008 as a result of identifying extreme gaps in the financial sector with a desired need for the underserved to have access to finance

Vision

To contribute to sustainable development of the Nigerian private sector and the microfinance sector and support socially and geographically balanced growth and economic development.

Mission

To create a major platform to support the continuous growth of Micro, Small, Medium Enterprises (MSME’s)

Nneka EneliCredit Awarenessnneka.eneli@creditawarenessnigeria.com01-4631098, 07045038048